British International Investment

HBL Bank UK Ltd

AfricaSouth AsiaFinancial services

HBL UK is the majority-owned subsidiary of HBL, Pakistan’s largest private sector bank operating in 14 countries around the world.

This investment was made when British International Investment was named CDC Group.

Our investment

Description of the investment.

The facility will increase HBL UK's capacity to support trade with local banks and trade supply chains across South Asia and Africa, particularly in markets where HBL UK has a strong regional footprint (i.e. Pakistan and Bangladesh).

It will increase the availability of trade finance in the market through supporting HBL UK in re-building its trade book. This will enable domestic businesses to import the commodities and capital equipment they need to sustain and potentially increase business operations, market output and contribution to GDP. Ultimately, it will lead to the retention of jobs and livelihoods, and the continued or increased availability of goods and services in the market.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Support economic opportunities by improving access to trade finance for businesses (SDG 8.1, 8.5, 8.10).
  • Sustained and potentially improved access to goods and services (SDG 2.1).

How?

Primary Secondary

Sustained economic opportunities through strengthening the capacity of domestic financial institutions in maintaining and increasing access to trade finance.

Sustained and potentially improved access to goods and services.

Who?

Stakeholder Geography Characteristics
Employees and suppliers

All BII geographies will be eligible, but HBL UK estimates that at least 60 per cent of the pipeline will be in Pakistan and Bangladesh.

We assume mass market characteristics and demographics of the respective geographies.

Customers

All BII geographies will be eligible, but HBL UK estimates that at least 60 per cent of the pipeline will be in Pakistan and Bangladesh.

We assume mass market characteristics and demographics of the respective geographies.

How much?

Scale Depth/Duration

We use the scale of the facility and enabled trades as a proxy to estimate. Up to $25 million of our commitment will enable up to $50 million in additional trade volumes per year. HBL UK aims to increase trade volumes to $550 million in 2021, compared with $500 million without the facility. In the medium-term (2022-23), HBL UK plans to reach $800 million in annual volumes.

The impact will occur over three years (i.e. the duration of the facility).

Contribution/additionality

Contribution/additionality
  • Financial additionality: Commercial funding for trade finance is not available in sufficient quantity nor on the same terms, particularly due to COVID-19. HBL UK has bilateral risk participation agreements with commercial banks on an offer-and-acceptance basis. This facility offers wider coverage and capacity and more flexibility.
  • Value additionality: Our business integrity team has been working closely with HBL Group since 2017 on the enhancements to their compliance programme.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

2.8-3.2

Risk

Evidence Risk
  • Visibility on the impact depends on HBL and the local banks’ ability to provide data on underlying borrowers.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4658
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    Africa, South Asia
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    Africa, Pakistan
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Financial services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Guarantee
    Start date :
    March 2021
    Amount :
    $25m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    United Kingdom

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