The Central Bank of Kenya (CBK) has formally cancelled the operating authority of Pakistan-based Bank Al-Habib Ltd (BAHL) to maintain a representative office in the country, signalling the bank’s official exit from the Kenyan market.
In a press release issued on Monday, the CBK said the cancellation, effective 15 May 2025, was prompted by a strategic decision from Bank Al-Habib to streamline its foreign operations. The move ends the bank’s seven-year presence in Kenya, which began on 9 April 2018 when the CBK granted BAHL authorisation to open a liaison office in Nairobi.
According to the regulator, the representative office in Kenya functioned solely as a marketing and liaison unit for the parent bank and its international affiliates, without engaging in core banking services such as accepting deposits or issuing loans.
“The exit of BAHL follows a strategic decision by the bank to rationalise its foreign operations,” the CBK noted in the statement.
Bank Al-Habib is headquartered in Karachi, Pakistan, and operates extensively across South Asia and the Middle East. It offers a wide range of retail and corporate banking services, including international trade finance. However, its footprint in Sub-Saharan Africa was limited to a non-operational representative office in Kenya.
Industry analysts say Bank Al-Habib’s decision to wind down its Kenyan office underscores the challenges faced by foreign banks operating in markets where local regulatory requirements and market dynamics require long-term investment.
“Representative offices are often exploratory outposts. The decision to exit may reflect either a lack of business opportunities in the region or a broader strategic pivot by the bank,” said Angela Wanjiku, a financial analyst based in Nairobi.
She added that Kenya’s competitive banking landscape, dominated by local giants like KCB Group, Equity Bank and Co-operative Bank, may have also made market entry difficult for foreign players not offering full-service operations.
Under Section 43 of Kenya’s Banking Act, foreign banks require approval from the CBK to establish representative offices in the country. These offices are not allowed to carry out banking activities but may conduct non-financial operations such as market research, liaison with clients, and facilitating trade between Kenya and the parent bank’s home country.
With the cancellation, Bank Al-Habib no longer holds any regulatory status in Kenya, and its office is now officially closed. The CBK emphasised its commitment to maintaining a stable and transparent financial environment, ensuring all institutions operating within its jurisdiction adhere to regulatory expectations.
The closure aligns with a broader regional trend where several international banks have either scaled down or exited African markets in recent years, focusing instead on core markets with stronger returns. In 2023, both Barclays and Société Générale trimmed their African footprints, citing operational rationalisation.
Kenya, despite being East Africa’s financial hub, has seen a wave of consolidations and market exits in recent years. However, it continues to attract interest from global development finance institutions and fintech firms.
Although the office did not offer direct banking services, its closure may have symbolic implications for Kenya-Pakistan trade relations, particularly in sectors where trade finance was facilitated through Pakistani banks.
Trade between the two nations remains modest, with tea exports from Kenya and textiles from Pakistan forming the bulk of commercial exchanges. Without a liaison office, such transactions may be routed through regional hubs such as the UAE or via digital platforms.
The exit of Bank Al-Habib is not expected to have any immediate financial impact on the Kenyan banking system. Still, it highlights the importance of evaluating foreign banks’ commitment levels when assessing their long-term presence in emerging markets like Kenya.
For Kenyan businesses seeking financial links with Pakistan, the closure means they will now need to rely on correspondent banking relationships or alternative trade finance channels.
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