ISLAMABAD: State Bank of Pakistan (SBP) on Tuesday released its annual performance review report on Tuesday, reporting a 4pc annual growth in profit for financial year 2016-17.
The profits touched Rs238b for FY 2016-17 compared to Rs229b for FY 2015-16. Income from foreign currency assets surged by almost 50pc and Rs227b profit was paid to federal government reported a local newspaper.
According to SBP’s report, banking sector is said to hold around 74pc share of Pakistan’s financial sector with asset base which is equal to 55pc of its GDP. The central bank further said the bulk of its profits came from lending to the federal government and commercial banks, followed by earnings on forex reserves.
A rise in earnings has been reported due to increase in discount income by Rs21b and interest earned from foreign assets increase by Rs5.3b. A fall of Rs17.5b on reverse repo transactions income was reported.
SBP’s interest income rose by 3pc to reach Rs260.8 for FY 2016-17 and interest earned from lending to federal government went up by 14pc, because of massive surge in government borrowing. And interest earned from borrowings obtained by commercial banks stood through reverse repos dipped 22pc because of fall in volumes of such operations.
SBP’s rise in income from foreign currency assets was due to increase in yield on reserves due to interest rates going up in global financial markets. Interest generated from export-finance facility (EFF) and other refinance facilities decreased to Rs6.4b in FY 2016-17 from Rs7.2b during FY 2015-16 because of fall in interest rates.
Outstanding loans extended to banks under refinance schemes saw major increases to touch Rs287b in FY 2016-17 against Rs199b in FY 2015-16. Average interest rate fell to 2.2pc from 3.5pc in last financial year, registering a decrease of over Rs2b interest earned from refinance schemes.
The report further disclosed that rupee depreciated against the dollar by Rs0.020 and rose against special drawing rights (SDR) by Rs0.366. As a result, depreciation against the dollar resulted in net exchange gain of Rs8b, while the rise in SDR contributed to exchange gain of Rs2.7b.
And the remainder of net exchange gain was Rs12b due to gain and fall of rupee against other currencies. SBP’s total expenditure stood at Rs41.7b for FY 2016-17 against Rs40.8b for FY 2015-16, inching up by 2.18pc. This was attributed to an increase of 18pc and 8pc in agency commission and banknote-printing charges.
