KARACHI: Pakistan could achieve annual growth exceeding six per cent, but only if it addresses key fundamentals like business confidence and the rule of law, said Bill Winters, Group CEO of Standard Chartered (SC) Bank.

Speaking at a round table on Friday about Pakistan`s strengths, Mr Winters highlighted the large educated English-speaking workforce, which allows for easier international communications, as well as the abundance of natural resources.

However, among other expenses, state-owned enterprises (SOEs) bleed the economy dry and drain all resources, added Rehan Shaikh, CEO of Standard Chartered Bank Pakistan Ltd. He called for the government`s commitment to privatising SOEs, similar to the recent Pakistan International Airlines initiative. The government has no business being in business, he said, echoing Finance Minister Muhammad Aurganzeb`s refrain.

Despite these challenges, Mr Winters was highly optimistic about Pakistan securing an InternationalMonetaryFund(IMF)programme.

He believes the IMF`s lending conditions are achievable, as evidenced by the recent budget.

However, Mr Shaikh cautioned that securing the funds requires further action and long-term structural reforms beyond temporary solutions.

Headquartered in the United Kingdom, Standard Chartered has a 160-year history in the region, having opened its first branch in Calcutta in 1863, before the partition. Since then, while over a dozen international banks have left the country, SC has remained and grown. Mr Winters explained that this growth is due to its expertise in cross-border transactions, for example, bringing in international capital to rejuvenate the power grid. SC is the biggest banking player for the government`s LNG and other energy trade financing requirements.

Speaking about his recent visit to India, Mr Winters said the two countries are at different stages of economic and political evolution.

India`s federal system allows states tremendous power. For an international operator, approaching the Indian market feels like dealing with a number of different countries.

However, over the years, the government has broken down some of those state-level barriers, introducing a national digital structure and a country-wide goods and services tax. These changes unleashed a lot of latent power in the economy.

India`s digital backbone stems from Aadhar, its biometrically verifiable digital identification system. Aadhaar assigns a unique identification number to every Indian citizen, linked to their fingerprints and iris scans. This opens up a world of opportunity for businesses and individuals to access financial services.

Secondly, India has had early-stage adoption of its digital payments the Unified Payments Interface. This system allows instant mobile phone-based money transfers, bypassing the need for traditional bank accounts or credit cards. Smartphones make it possible to buy even gola gandas on the road. The linkage of UPI to Aadhar contributes to the foundation of India`s tech-savviness.

In response to a question about how Pakistan`s market is different from others, Mr Winters pointed out that while SC has a strong deposit base, a large portion is held by the central bank.

He hoped that as the country`s financial market matures, the deposits would translate into a higher proportion of consumer and corporate loans,reducingreliance on sovereignlending.

Sukuk and Panda bonds are some of the ways that the government can re-enter the international market; however, Mr Winters cautioned that preparing for it is as important as issuing it.

Given Pakistan`s current international credit ratings, it does not have the strength to attract investments, the CEO executives said.

A recurring message by Standard Chartered was that the bank is here to stay against the backdrop of other multinationals exiting Pakistan, such as pharmaceutical company Bayer and petrol company Shell. After all, in the high-interest, low-consumer-demand environment, where many corporations struggle to survive, the banks are enjoying super-normal profits. In CY2023, SC Pakistan posted earnings of Rs42.6bn, up nearly 115pc from the same period last year.

Despite the hurdles, both Mr Winters and Mr Shaikh expressed optimism about the State Bank and the government`s stronger political will to address key issues like SOE reform, export diversification, and digital transformation. They opined that through longterm structural changes, Pakistan can unlock its significant potential for economic growth and prosperity.