KARACHI: Habib Bank Limited (HBL) on Friday issued a clarification related to the news published a day earlier related to supporting terror financing.

In a communication sent to Pakistan Stock Exchange (PSX), the bank said that the allegations in the complaints – which have been pending in the US court for more than two years – are meritless, and HBL is contesting them fully and vigorously.

The public record is clear that the HBL is unwavering in its commitment to combating the financing of terrorism.

“HBL’s extensive global implementation of anti-money laundering and counter-compliance controls is well documented and has been highly successful and lauded by regulators around the world,” it added.

HBL’s preliminary motion was successful in two aspects: The Court dismissed the primary liability claims and narrowed the case substantially. The court also stated that the secondary liability claims will be evaluated for dismissal upon following due legal proceedings, and no judgment was passed by the court on the matter.

“Indeed, the court specifically invited HBL to renew its motion to dismissal all remaining claims for lack of jurisdiction after the parties have exchange certain factual information concerning jurisdiction.”

Moreover, HBL proactively initiated a business transformation program, in early 2018, around its control and compliance process and system to adhere to international standards.

“The bank has made investments in management time and resources to further strengthen its AML and CFT protocols by partnering with global experts in this field,” HBL added.

The bank is committed to adhere to the highest standards of compliance with the international and local laws and regulations.

KARACHI: Habib Bank Limited (HBL) has come under scrutiny once again and has been alleged to provide financial support to the terrorist organizations.

According to KTrade Alert issued on Thursday, shortly after the news had hit the market, HBL’s stock hit the lower circuit.

READ MORE: HBL declares 108 percent growth in quarterly profit

As per the Justice Against Sponsors of Terrorism Act (JASTA), HBL Bank has repeated misconduct and revealed a pattern of funding terrorism at various occasions in the last decade as of 2006.

Plaintiffs in these consolidated cases are 370 individuals who were injured or whose family members were injured or killed in terrorist attacks, who bring this action against HBL Bank under the Anti- Terrorism Act (ATA), as amended by the Justice Against Sponsors of Terrorism Act (“JASTA”).

Recall that HBL Bank and HBL’s New York Branch were previously implicated in money laundering and terrorist financing back in 2017.

The bank was penalized USD225 million and lost its NY banking license for non-compliance with and violation of NY’s state laws and regulations.

Therefore, the bank recognized a penalty of PkR 23.72  billion (EPS impact of PkR16.2) in CY17 that wiped majority of the profits.

To recall, HBL’s CET1 and Tier1 CAR deteriorated to 12.1 per cent each in CY17 vis-à-vis 13.1 per cent in CY15.

As a reminder, HBL has one of the lowest CAR in the banking industry. As per June 2022 accounts, the Tier1 and CET1CAR stands at 11.39 per cent and 10.69 per cent, respectively against the requirement of 11.0 per cent and 9.5 per cent.

As per the court, HBL’s motion to dismiss primary liability claims has been granted as none of the alleged banking services were acts of international terrorism.

Meanwhile, secondary liability claims have been denied because HBL allegedly supported and aided campaign of terrorism.

The parties are expected to meet on October 19, 2022 to file a proposed civil case management plan and scheduling order.