Several of Pakistan's banks are eyeing opportunities to write more letter of credit (L/C) business by expanding overseas and exploring new markets, particularly in China, officials have said.

United Bank (UBL), Habib Bank (HBL) and National Bank of Pakistan (NBP), which together hold more than 40 per cent market share, are hoping to capitalise on opportunities emerging from the ambitious China-Pakistan Economic Corridor (CPEC) project designed to boost trade and investment between the two countries.

L/C opportunities

High demand for trade and project financing is expected as the CPEC gains pace and there will likely be opportunities for branches of Pakistan's banks in China to provide L/Cs and other trade finance offerings.

According to estimates, around 1.25 million containers worth around US$30-40 billion will be shipped each year through the corridor.

Bank interest

A UBL official told local media that the bank has planned to set up a fully-fledged branch in China that would offer a complete suite of products compliant with guidelines set by the China Banking Regulatory Commission.

"Currently, we are...engaged with multiple counterparties to establish strategic relationships and offer banking services in respective geographies," the official said. UBL entered the Chinese market in 2007 when it set up a representative office in Beijing.

More openings

HBL is set to open its first branch in the Chinese city of Urumqi, the capital of Xinjiang region, in the next few months.

NBP is reportedly also in the process of meeting the regulatory requirements of China and Pakistan to open a full-fledged branch in Beijing. The bank already has a representative office in China.

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