The National Bank of Pakistan (NBP) is set to shut down its branches in Bishkek (Kyrgyzstan), Baku (Azerbaijan), and Almaty (Kazakhstan) in the coming weeks. This decision is part of the bank’s strategy to close loss-making branches and focus on better financial management.
According to the bank’s annual report, the closure is aimed at improving capital efficiency, reducing compliance risks, and enhancing returns. The bank’s board has been working on a long-term plan to exit less profitable international markets and reallocate resources effectively.
NBP’s Presence in Central Asia
NBP opened branches in these Central Asian countries in the 1990s after their independence. The goal was to expand Pakistan’s banking influence and support Muslim-majority countries in setting up financial institutions. However, over time, these branches struggled to generate significant profits, leading to the decision to shut them down.
Previous Closures in New York and Paris
This is not the first time NBP has closed overseas branches. In 2024, the bank shut down operations in Paris and New York. The decision to close the New York branch was made after ensuring full compliance with local regulatory authorities. Notably, in 2022, NBP was fined $55 million by New York’s financial regulators due to regulatory violations, and in 2008, it faced a penalty of $265,000 in Paris for similar issues.
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Strengthening Risk and Compliance
NBP has been working on strengthening its risk management strategies. The bank is improving credit management frameworks, enforcing accountability, and ensuring a clear distinction between risk-takers and risk managers. These measures aim to make the bank’s operations more secure and efficient.
NBP’s Global Footprint
Despite these closures, NBP still operates in multiple international markets. At its peak, the bank had 21 branches in different countries, making it one of the most globally present Pakistani banks. However, with the ongoing restructuring, the bank is now focusing on maintaining a stronger and more sustainable international presence.
By closing non-performing branches, NBP is looking to build a more financially stable future. The move aligns with its vision of optimizing resources and ensuring compliance with international banking regulations.
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