HBL’s Aurangzeb sees brighter times for Pakistan despite bailout
In a country with twin deficits and a 13th bailout in recent memory, one might wonder if former JPMorgan banker Muhammad Aurangzeb regrets becoming Habib Bank CEO – but instead he sees a path to a better outlook for his country.
Aurangzeb left a successful career job at JPMorgan earlier this year to take the reins at Habib Bank (HBL), Pakistan’s biggest lender.
It seems a grim time to take such a role – Pakistan faces twin deficits and has just agreed a tough bailout with the IMF – but he sees reasons to be positive.
Euromoney meets Aurangzeb in Bali early one morning on the sidelines of the IMF annual meeting. It’s an opportune time and place to meet, as the previous day Pakistan met with the IMF to seek its 13th bailout since the 1980s.
Aurangzeb sees the macro position as one of three elements influencing the outlook for banks in Pakistan, the others being technology and the regulatory environment, but the macro is certainly the one in the headlines.
He calls the twin deficit “devilishly structural”.
“On the fiscal side, pretty simply, we need to increase the tax base,” he says. “On the current-account deficit side, remittances have been relatively robust; the issue has been exports not being as strong as one would expect,” partly, he says, as a consequence of the currency peg being set too low.