Pakistan's financial sector stands at an inflection point. Technology is reshaping how financial services are delivered, customer expectations continue to evolve, and policymakers are placing greater emphasis on financial inclusion. Yet one principle remains unchanged: sustainable banking is built on strong capital.
That belief has shaped every major decision we have taken since acquiring ABHI Bank eighteen months ago.
When we acquired the institution, it was a broken bank. Through a disciplined secured lending model and a digital-first strategy, we have successfully turned it around in record time, delivering sustained profitability and establishing a strong platform for long-term growth.
Our ambition is to build Pakistan's leading digital-first bank under the State Bank of Pakistan's Branchless Banking (BB) license, serving the financial needs of the masses through technology, innovation and responsible banking.
Building such an institution requires more than a compelling digital proposition. Banking is fundamentally a business of trust, and trust ultimately rests on the strength of a bank's balance sheet. Capital enables banks to grow responsibly, absorb economic volatility, strengthen confidence among regulators and customers, and continue investing in innovation over the long term.
Our shareholders understood this from the outset. That is why our immediate priority following the acquisition was to strengthen the bank through significant Tier 1 capital injections while transforming the business into a sustainable and profitable institution.
Today, following the bank's successful turnaround, sustained profitability and growing market confidence, we believe the time is right to pursue the next phase of that strategy by listing ABHI Bank on the Pakistan Stock Exchange and raising approximately PKR 2–3 billion in growth capital through an Initial Public Offering (IPO).
The proposed IPO is not simply about accessing public markets. It is about ensuring that the institution has the financial strength to continue growing responsibly.
The additional capital will strengthen our balance sheet, expand our lending capacity, accelerate our digital banking ambitions and position ABHI Bank to capture the opportunities emerging across Pakistan's evolving financial services landscape.
Perhaps more importantly, we hope this step demonstrates the broader role Pakistan's capital markets can play in financing the country's next generation of financial institutions.
The transformation of Pakistan's banking sector will require patient capital, disciplined governance and institutions capable of balancing innovation with prudent risk management. Public markets can play an important role in supporting that evolution.
Our own experience reinforces this belief.
Since the acquisition, we have complemented shareholder capital with approximately PKR 2.5 billion generated organically through profitability over just eighteen months. This reflects the strength, scalability and sustainability of our secured lending and digital-first operating model. It also demonstrates that well-managed financial institutions should aspire not only to raise capital but to generate it through disciplined execution.
The proposed IPO forms one pillar of our long-term capitalization strategy. As we continue to grow, we also intend to diversify our capital structure through Additional Tier 1 (AT1) and Tier 2 instruments, complemented by a range of credit enhancement instruments, including first-loss guarantees, pari passu portfolio guarantees, partial credit guarantees, risk participation arrangements and blended finance structures. These instruments will strengthen our balance sheet, optimize capital efficiency and support the prudent expansion of our unsecured lending business while maintaining disciplined risk management.
Resilience remains equally important. Through prudent provisioning under the IFRS 9 framework, we continue to build expected credit loss reserves that enhance our ability to absorb future economic shocks while reinforcing the bank's long-term financial strength.
The proceeds from the IPO will accelerate the expansion of our Banking-as-a-Service platform, strengthen our digital banking rails and scale our secured lending franchise through our omnichannel network of 114 customer touchpoints. Every rupee of capital raised will be invested with a clear objective: building a stronger, more resilient and more scalable digital bank.
We are confident investors will recognize the long-term value ABHI Bank is creating. More importantly, we hope this IPO contributes to a broader conversation about how Pakistan can build stronger financial institutions, deepen its capital markets and support innovation without compromising financial stability.
Going public is not the conclusion of our transformation.
It is the beginning of the next phase of building a stronger institution—one that we hope contributes to a more resilient, inclusive and digitally enabled banking sector for Pakistan.
About the Author
Kabeer Naqvi is an industry veteran currently serving as Entrepreneur in Residence with the Abhi Group, responsible for building its digital bank in Pakistan. He is also the former Chairman of the Pakistan Microfinance Network and former President & CEO of U Microfinance Bank.