Bank Alfalah Afghanistan Exit After 21 Years

The Bank Alfalah Afghanistan exit is now complete, after the bank sold its operations in the neighbouring country to Ghazanfar Bank and closed a presence that began in 2005. The transaction was completed on November 5, following approvals from the central banks of Pakistan and Afghanistan.

Bank Alfalah told the Pakistan Stock Exchange (PSX) on Friday that all conditions for the deal had been met. Its notice said the sale covered the banking business run from its Kabul and Herat branches, together with the related assets and liabilities. The bank added that it had ceased its banking operations in Afghanistan and would complete the closure of its branches under the applicable rules.

A deal two years in the making

The exit did not happen overnight. Bank Alfalah’s board accepted a non-binding offer from Ghazanfar Bank in December 2025, and the two central banks gave in-principle approval in January 2026 for the Afghan lender to carry out due diligence on the business. Definitive documents were then signed, and the final approvals from the State Bank of Pakistan and Da Afghanistan Bank cleared the way for completion on November 5.

This was not the bank’s first attempt to leave Afghanistan. An earlier plan to sell the business to Azizi Bank, announced in 2018, never reached completion. The Ghazanfar deal is the one that finally closed, and it ends a 21-year run in the Afghan market.

Bank Alfalah opened its first Afghan branch in Kabul in 2005 and later expanded to Herat, offering both conventional and Islamic banking services. The business stayed small throughout. It ran only two branches, and analysts quoted in reporting on the deal said the unit was limited in scale and would have no material effect on the bank’s balance sheet.

Why the bank is pulling back

The exit fits a wider shift in the bank’s strategy. Bank Alfalah is also selling its Bangladesh operations to Bank Asia, under a memorandum of understanding signed in May 2025. Together, the two sales point to a bank that is drawing back from its smaller foreign units to focus on its home market.

Conditions in Afghanistan have also weighed on the decision. Trade crossings between Pakistan and Afghanistan have remained largely closed since October 10, 2025, after deadly border clashes, and cross-border business has slowed sharply. A small two-branch network in that setting offered little growth, while it still carried the cost and risk of operating under two regulators.

The bank had prepared its Afghan customers for the change. In a public notice, it asked account holders at its Kabul and Herat branches to state by November 2 whether they wished to move their accounts, and said balances would transfer to Ghazanfar Bank if no instructions arrived. The branches were to keep running as usual until the transfer took effect.

What the Bank Alfalah Afghanistan exit means for Pakistan’s banks

The sale comes at a busy time for Pakistan’s banking sector. Abhi Bank raised Rs2 billion through an oversubscribed book-building this week, which shows investors still have appetite for new banking paper. At the same time, the KSE-100 index dropped 1,494 points in midday trading, a reminder that the market remains volatile.

The State Bank has been pushing banks to modernise their core systems. Its own core banking network and data centre project is part of that drive, and a bank that sheds a small foreign unit frees up management time for such work at home. Trade finance also remains tight for smaller exporters, so banks face pressure to lend where the demand sits, which is largely domestic.

For Ghazanfar Bank, the deal adds two established branches and an existing book of business in Kabul and Herat. For Bank Alfalah, it closes a chapter that began when Afghanistan’s banking sector was rebuilding after years of war, and it leaves the bank free to put its capital behind its Pakistan franchise.

What happens next

Bank Alfalah will now wind down its Afghan branches in line with the rules of both central banks. Account holders who did not give instructions will see their balances move to Ghazanfar Bank. The bank has not disclosed the financial value of the deal, and no figure has appeared in the PSX notice or in reporting on the sale.

Frequently asked questions

Which Bank Alfalah branches were sold in Afghanistan?

The deal covers the bank’s Kabul and Herat branches, together with their assets and liabilities. Both branches will close under the applicable regulatory rules.

When did the Bank Alfalah Afghanistan exit complete?

The transaction was completed on November 5, 2026, after approvals from the State Bank of Pakistan and Da Afghanistan Bank. Bank Alfalah informed the Pakistan Stock Exchange on Friday, November 6.

Why did Bank Alfalah leave Afghanistan?

The Afghan business was small, with only two branches, and offered little growth. The bank is also selling its Bangladesh operations, which points to a wider decision to focus on its domestic franchise in Pakistan.

What happens to Bank Alfalah account holders in Afghanistan?

The bank asked customers to state by November 2 whether they wished to move their accounts. Balances of customers who gave no instructions transfer to Ghazanfar Bank.