Negotiations have started between experts of HSBC and PCB's high-level officials, and PCB has shown willingness to sell out its whole operations, the leading Pakistani newspaper Dawn quoting banking sources reported.

HSBC has only four branches in Pakistan now, two in southern port city Karachi, one each in the capital of Islamabad and major eastern city Lahore, and its sudden interests in Pakistan have surprised financial analysts, Dawn said.

As per March 31, 2006 quarterly report, PCB is operating with 62 branches, having deposits of 40.6 billion rupees (about 676.67 million US dollars), and in 2005, it posted a profit after tax of 495 million rupees (about 8.25 million US dollars), registering a growth of 43 percent over last year's 345 million rupees (about 5.77 million dollars).

Established in 1991, PCB has increased its total asset at an annual compound rate of about 23 percent during the period from December 1992 to December 2005, to 53.8 billion rupees.

The acquisition of PCB, if succeed, will make HSBC the second biggest foreign bank in Pakistan, able to reaching all corners of the country, the newspaper said.

This will be the second acquisition of the local bank by a foreign financial institution. Earlier, Standard Chartered Bank negotiated the deal to buy Union Bank and completed due diligence last week, and the agreement is expected to be completed next month, according to Dawn.