KARACHI, Dec 26: State-run Habib Bank and partly privatized Allied Bank have set up Habib Allied International Bank that would take over their business in the UK from January 1, 2002.

In future, the bank can also open branches in the countries constituting European Economic Commission with the approval of the UK authorities.

The two banks signed the shareholders agreement here on Tuesday at HBL head office, says a press release. HBL president Zakir Mahmood and ABL president Khalid A. Sherwani signed the agreement on behalf of their banks. State Bank deputy governors Rashid A Chughtai and Taufiq Husain were also present at the occasion.

“The primary objective of selecting United Kingdom is the importance of London as a major world financial centre and presence of substantial Asian community in the UK,” says the release.

“Furthermore both HBL and ABL have long historical presence in the UK.” HBL has been operating in the UK for more than 39 years and ABL for 23 years. “The focus of the partnership is to provide high quality saving products and banking services to the worldwide Asian and African communities with business or family connections in the UK. It aims at establishing as a market leader in trade finance for UK/Pakistan trade and for trade between the UK and other countries where HBL is represented.” HBL overseas presence covers 26 countries.

According to the press release, Habib Allied Bank has been incorporated with an initial paid-up capital of 25 million pounds — subscribed as to 90.5 per cent by HBL and 9.5 per cent by ABL.

The bank will take over the existing operations of six branches of HBL and four branches of ABL. The board of directors will consist of maximum 10 members — nine from HBL and one from ABL. The chairman of the board would be from HBL and the chief executive officer would only be nominated by Habib Bank. At present the board consists of six members — five members from HBL and one from ABL.

“The bank is poised to lead through continuous process of improvement, automation and quality assurance,” says the release.

It is to become “the low cost service provider among the Asian/African/Middle Eastern banks present in the United Kingdom.

Speaking at the signing ceremony, HBL president Zakir Mahmood said that Habib Allied Bank had been established through a coordinated team-work spanning three years.