Karachi: A quarterly performance review report (April-June) for the banking sector was released by State Bank of Pakistan on Friday which revealed that their asset base had risen by 8.3pc reported a local newspaper.
As per the quarterly report, Jan-June period saw a slight decline in profitability of banks compared on year-on-year basis (YoY).
Bank profitability was said to be Rs150.4b or 7.3pc lower than profits recorded in same period last year (SPLY). This fall has been attributed to a rise in admin expenses, a 13.4pc decrease in other income and 1.1pc fall in interest income.
SBP predicted that the upcoming quarter growth would be stagnant as it is a season of net retirements from sugar and textile segments.
Due to an increase in advances, low interest rates it is expected that the private sector could be a major beneficiary of inflows, said the report.
An increase of 5.6pc was reported in investments and net advances rose up by 9.2pc for the quarter ended 30th June. As per the report “The relatively higher growth of advances has pushed the advance-to deposit ratio up to 48.7pc in April-June from 47pc in the second quarter of 2016.”
Agribusiness, chemical and pharmaceutical, energy production and transmission drove an increase in financing demand, as per SBP’s report.
In large-scale manufacturing index for FY 2016-17, the major growth drivers were food and beverages 11.5pc, electronics 17pc, automobile 11.2pc, iron and steel 20.5pc.
Long-term advances registered a decline of 5.1pc in April-June 2017 quarter from 9pc in SPLY. The private sector constituted 70.1pc share of loans in this category.
A total of Rs425.1b was invested in government bonds by banks from a total investment of Rs449.2b.
Banking sector deposits registered a rise of 6.5pc reaching Rs764.3b for April-June 2017 quarter, which was a touch less than 6.8pc in SPLY.
Customer deposits which constitute majority of the total deposits share (96.5pc), went up by 7.7pc during April-June 2017.
