The Bank of Punjab has received in-principle approval from the State Bank of Pakistan to establish an Overseas Wholesale Banking Unit in the Kingdom of Bahrain, marking a significant step in the bank’s plans to expand its banking operations beyond Pakistan. The approval allows the Bank of Punjab to move forward with preparations for establishing a presence in Bahrain, although the proposed unit will only begin operations after all required regulatory approvals and licences have been secured from authorities in both countries.
The State Bank of Pakistan granted the in-principle approval through a letter dated August 5, 2026, according to a material information notice submitted by the Bank of Punjab to the Pakistan Stock Exchange on Thursday. The latest development follows the bank’s earlier disclosure regarding its international expansion plans on July 4, 2024. The original plan was approved by the Bank of Punjab’s Board of Directors on July 1, 2024, and included the proposed establishment of a Wholesale Banking Unit in Bahrain as well as a representative office in the United Arab Emirates. Both initiatives were initially subject to the receipt of the necessary regulatory approvals.
The proposed Bahrain operation will focus on wholesale banking activities and will form part of the Bank of Punjab’s broader international expansion strategy. However, the State Bank of Pakistan’s in-principle approval does not by itself allow the unit to commence operations. The bank said the establishment of the Overseas Wholesale Banking Unit remains subject to obtaining all required regulatory clearances in Pakistan and Bahrain and complying with the applicable laws, rules, regulations and conditions prescribed by the State Bank of Pakistan. Among the key requirements is a No Objection Certificate from the Central Bank of Bahrain, as well as the issuance of the required banking licence by the State Bank of Pakistan. The unit will commence operations only after these regulatory requirements have been fulfilled.
The Bank of Punjab was established under the Bank of Punjab Act, 1989, and became a scheduled bank on September 19, 1994, after receiving approval from the State Bank of Pakistan. The bank is principally engaged in commercial banking and related financial services, with the Government of the Punjab serving as its majority shareholder. Its proposed entry into Bahrain would add an international component to its existing domestic banking operations and provide the institution with a platform for developing wholesale banking activities in the Bahraini market, subject to the completion of the regulatory process.
The development comes shortly after Pakistan Credit Rating Agency upgraded the Bank of Punjab’s long-term entity rating to AAA from AA+ in July 2026, while maintaining its short-term rating at A1+ with a Stable outlook. Pakistan Credit Rating Agency attributed the upgrade to factors including stronger earnings, improved profitability, prudent risk management and better asset quality. The rating agency also cited the bank’s expansion of Islamic banking and its digital transformation as important factors supporting the improved assessment. The Bank of Punjab said it will continue to inform the Pakistan Stock Exchange about any further material developments relating to the proposed Bahrain operation in accordance with applicable legal and regulatory requirements.
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