In 2004, Bank AL Habib Limited obtained the license for Islamic Banking operations and established an independent Islamic Banking Division (BAHL-IBD) in 2004. In 2005, Bank AL Habib opened it's first dedicated Islamic Banking Branch and started business operations. The Islamic Banking Division is supervised by the esteemed Shariah Board and regulated by State Bank of Pakistan.

Bank AL Habib Limited Islamic Banking Division offers its products and services from a growing network of 249 dedicated Islamic branches. In addition, it also operates from 69 Islamic Banking Windows established in selected conventional branches of the bank. This Islamic network is spread over 96 major cities of Pakistan.