Pakistan’s Bank Al Habib Shuts Down Kenyan Office Amid Global Strategy Shift

Bank Al Habib Limited (BAHL), one of Pakistan’s leading commercial banks, has officially exited the Kenyan market, shutting down its Nairobi Representative Office after nearly seven years of operation. The Central Bank of Kenya (CBK) confirmed that the closure, effective from May 15, 2025, was conducted in compliance with the Banking Act and existing prudential guidelines.

The move is part of a broader strategic realignment by the bank, which is streamlining its international operations to focus on more core and high-growth markets.

Established in April 2018, BAHL’s Nairobi office functioned purely as a liaison office. It was not licensed to offer direct banking services such as accepting deposits or issuing loans.

Instead, its mandate was to support corporate relationships, facilitate correspondent banking, and conduct market research. However, the bank has now decided to end this limited engagement to redirect resources to more strategically aligned jurisdictions.

In an official statement, BAHL attributed its decision to internal restructuring aimed at optimizing operations and enhancing efficiency across its international footprint.

Markets such as Pakistan, the United Arab Emirates, Bahrain, Malaysia, Türkiye, China, and the Seychelles are expected to benefit from renewed investment and focus. The bank assured all stakeholders that it had appointed Oraro & Company Advocates to handle any outstanding legal matters and provide assistance during the wind-up phase.

BAHL’s withdrawal from Kenya reflects a wider shift in the country’s financial landscape, where tighter regulations and higher capital requirements are driving consolidation and strategic exits.

Notably, the CBK has raised the minimum core capital requirement for banks from USD 7 million to USD 23 million, with a further increase to USD 77 million expected by 2029. These reforms are intended to strengthen the sector but are proving challenging for smaller and non-core banking institutions.

Additionally, the CBK recently announced it would lift its nine-year moratorium on new commercial bank licenses starting July 1, 2025.

This decision comes with a new KSh 10 billion (approximately USD 75 million) capital requirement for new entrants. As a result, Kenya’s banking sector is poised for a significant transformation, with larger, well-capitalized regional and global players expected to enter or expand within the market.

Despite the closure of its physical office in Nairobi, BAHL is expected to continue indirect operations through trade finance and correspondent banking relationships. This ensures that while its local presence has ended, the bank remains connected to the Kenyan market through international financial channels.

The departure of Bank Al Habib underscores the increasingly competitive and tightly regulated environment in which foreign banks must operate in Kenya. For BAHL, it signals a renewed focus on regions that offer stronger alignment with its long-term growth goals. For Kenya, it opens the door to a new era of banking, one shaped by higher entry barriers, enhanced regulatory oversight, and opportunities for new, financially robust players to take root in an evolving financial ecosystem.