Does Beijing have a better regional commercial banking partner in south Asia than HBL? It’s hard to imagine who they might be. The Karachi-listed bank, Pakistan’s largest by assets, has completely bought into the Belt and Road Initiative. It was the first Pakistan lender to initiate China coverage in 2013, at branches in three cities: Karachi, Lahore and Islamabad. China, in turn, has garlanded it with praise and handed out new branch licences at, by Beijing’s usual standards, warp speed.
In 2017, HBL opened a full-service branch in Urumqi, which lies on the New Silk Road as it leaves China in a westerly direction, bound for Central Asia and Europe. That office has since secured a renminbi licence from the banking regulator in Beijing, letting it settle trades onshore in China’s currency.
And still the approvals come. In June this year, HBL became the first non-mainland lender to secure membership bank status at the Shanghai Cooperation Organization’s Interbank Association, a China-led political, economic and security alliance. Its next step: to upgrade its Beijing representative office to full branch status, with approval expected, HBL hopes, by the end of 2018.
Then there’s the deal list. HBL is mandated on a host of transactions with BRI links and connotations. In the first half of 2018, it began funding and facilitating the $2.9 billion Multan-to-Sukkur highway, built by China State Construction Engineering; a six-lane motorway costing $2.4 billion set to link Abdul Hakeem with Lahore; and a liquefied natural gas plant owned and operated by Harbin Electric. HBL was also mandated as foreign currency lead arranger to Lucky Electric Power Company, currently building a $883 million coal-fired super-critical power plant at Port Qasim; and as financial adviser to China Electric Power, a division of State Grid Corporation, on a transmission line with a project cost of $1.7 billion.