In the midst of economic challenges, why is the banking sector thriving? 

The sector is expected to continue steady performance in the next half too. 

KARACHI: In the midst of rising inflation, economic uncertainty and falling business confidence the country’s banking sector has continued to post skyrocketing profits. The first half of this fiscal year saw banks double profits from Rs 126.2 billion in the same period last year to an impressive Rs 284.5 billion.

The asset base of the banking sector also experienced significant growth, expanding by 14 percent from January to June 2023, compared to a 16 percent increase during the same period in the previous year, ultimately reaching an astonishing Rs 40.8 trillion. The driving force behind this growth was primarily investments, constituting 52.7 percent of the asset base, while advances, or loans to the private sector, remained subdued.

There has also been a marked slowdown in domestic private sector advances during H1CY23, which contracted by 7 percent, in stark contrast to the 6.8 percent growth observed in the corresponding period last year.

What is up with the increasing investments? 

A significant contributing factor to the increase in investments was the increasing reliance on government securities within banks’ investment portfolios. By the end of June 2023, government securities and total investments accounted for 49.6 percent and 52.7 percent, respectively.

Despite a challenging economic landscape, banks also witnessed a notable increase in their deposits, rising by 14.2 percent during H1CY23 to reach Rs 26.8 trillion by the end of June 2023. This influx of deposits, coupled with a slower pace of lending, led to a decline in the Advances to Deposits Ratio (ADR) from 50.4 percent in December 2022 to 45.0 percent.

The remarkable surge in profits can largely be attributed to higher net interest income, driven by rising interest rates. The SBP policy rate saw a cumulative increase of 600 basis points during H1CY23. While interest income doubled to Rs 2723.1 billion in H1CY23 compared to the same period in the previous year, interest expenses also more than doubled to Rs 1882.1 billion.

While the increase in interest rates played a significant role in boosting banks’ income from advances and investments, the expansion in the volume of these assets also contributed to the growth in interest income. However, non-interest expenses increased by 31.9 percent during H1CY23, surpassing last year’s figures.

Outlook for next half of 2023

As the banking sector looks to the second half of 2023, its performance will be contingent on the operating environment and evolving policy stance. Furthermore, the results of the latest stress tests indicate that the banking sector is expected to display resilience in the face of severe macroeconomic shocks over the next two years. Expectations for the banking sector in the coming months include continued steady performance, driven by investments to meet the government’s borrowing needs. Advances are also anticipated to rise in the final quarter of CY23, especially in sectors like textiles and sugar, which could boost credit demand.

While the banking sector is likely to maintain its operating performance, the impact of higher interest rates may pose challenges in terms of high-interest expenses. Nevertheless, steady earnings are expected to support solvency and improve capital adequacy ratios. Though aggregate demand containment and stressed financial conditions may raise credit risk concerns, the sector’s exposure to corporate borrowers with robust creditworthiness is expected to safeguard asset quality. However, reducing the banking sector’s reliance on government borrowing remains a pressing need to ensure long-term fiscal stability.

Mariam Umar Farooqhttp://profit.com.pk
The author is a business journalist and a member of the staff. She can be reached at [email protected]

348 COMMENTS

  1. Thank you really very much. Your article has given me a lot of useful information. Hope you will continue to have useful articles in the future.

  2. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  3. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  4. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  5. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job.

  6. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  7. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  8. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  9. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  10. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  11. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  12. This is my first time i visit here. I found so many interesting stuff in your blog especially its discussion. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here! keep up the good work

  13. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job.

  14. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  15. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  16. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  17. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  18. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  19. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  20. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  21. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  22. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  23. Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article.I will make sure to be reading your blog more. You made a good point but I can’t help but wonder, what about the other side? !!!!!!THANKS!!!!!!

  24. This is my first time i visit here. I found so many interesting stuff in your blog especially its discussion. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here! keep up the good work

  25. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job.

  26. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job.

  27. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  28. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  29. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  30. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  31. En Cefa, creemos en la construcción de relaciones sólidas basadas en la confianza y el compromiso. Sabemos que confiar el cuidado de sus seres queridos a otra persona es una decisión significativa, y es por eso que nos esforzamos por establecer una conexión auténtica con cada familia que atendemos. La confianza es la base de nuestra labor, y nos comprometemos a brindar cuidados con el respeto y la dedicación que cada individuo merece.

  32. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  33. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  34. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  35. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  36. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  37. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  38. i read a lot of stuff and i found that the way of writing to clearifing that exactly want to say was very good so i am impressed and ilike to come again in future..

  39. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  40. I can see that you are an expert at your field! I am launching a website soon, and your information will be very useful for me.. Thanks for all your help and wishing you all the success in your business.

  41. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  42. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  43. Thank you again for all the knowledge you distribute,Good post. I was very interested in the article, it’s quite inspiring I should admit. I like visiting you site since I always come across interesting articles like this one.Great Job, I greatly appreciate that.Do Keep sharing! Regards,

  44. Thanks for sharing nice information with us. i like your post and all you share with us is uptodate and quite informative, i would like to bookmark the page so i can come here again to read you, as you have done a wonderful job.

  45. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  46. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  47. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  48. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  49. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  50. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  51. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  52. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  53. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  54. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  55. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  56. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  57. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  58. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  59. Over time, the sofa shed its elitist mantle. In 17th-century Europe, the rise of the middle class saw the development of more affordable upholstered seating. The popularity of coffee houses further cemented the sofa’s place as a hub for social interaction and conversation. By the 19th century,

  60. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  61. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  62. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  63. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  64. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  65. Yes, the Tim Unit Peradilan Semu (UPS) from FH UPN “Veteran” Jakarta secured the third-place position in the National Moot Court Competition (NMCC) Hotma Sitompoel Trophy 2023. This achievement showcases their prowess in legal advocacy and courtroom skills. For further details, you can Go to this site.

  66. Amid economic challenges, the banking sector is thriving due to several factors. Increased demand for financial services, such as loans and investment opportunities, boosts bank revenues. Additionally, banks play a vital role in stabilizing the economy by providing liquidity and credit. Technological advancements also enable banks to streamline operations and reach more customers, enhancing their profitability. Download Scarlet iOS to access banking services conveniently, contributing to the sector’s resilience.

  67. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  68. Check this out: Despite economic challenges, the banking sector is thriving due to its adaptability and resilience. Banks have implemented innovative strategies to manage risks and capitalize on emerging opportunities. Additionally, central bank interventions and government stimulus packages have provided stability and support. This, coupled with increased digital banking adoption, has contributed to the sector’s continued growth and profitability.

  69. Forget kale smoothies and protein shakes! Forget counting macros and obsessing over calorie intake. Let’s embark on a culinary adventure across the globe, exploring some of the most unusual and fascinating diets practiced around the world.

  70. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  71. 誕生 (tanjō, meaning “birth”) in 1941, the original Jeep, the Willys MB, was designed to be a lightweight, maneuverable, and all-terrain vehicle. It quickly gained recognition for its reliability and capability, playing a crucial role in transporting troops, supplies, and even serving as a mobile command center.

  72. Project funding is defined as the part of GBARD which is allocated to a group or an individual to perform an R&D activity limited in scope, budget and time, normally on the basis of the submission of a project proposal describing the research activities to be done

  73. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  74. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  75. This is very educational content and written well for a change. It’s nice to see that some people still understand how to write a quality post!

  76. McDVOICE isn’t just about collecting praise (or complaints) about your latest burger. The data gathered helps McDonald’s identify trends. Did wait times seem excessive at a particular location? Were customers raving about the new McFlurry flavor? This feedback loop allows McDonald’s to pinpoint areas for improvement and cater their offerings to local preferences.

  77. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  78. “Chumba Casino: Your Gateway to Online Gaming Excitement! Experience the thrill of virtual gambling with Chumba Casino’s diverse selection of games, from slots to table games, all from the comfort of your own home.”

  79. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  80. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  81. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  82. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  83. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  84. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  85. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  86. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  87. The lunchbox, a seemingly simple object, holds a surprising amount of power. It’s a tiny time capsule, a carrier of sustenance and sentiment. For children, it’s a midday treasure chest, a canvas upon

  88. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  89. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  90. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  91. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  92. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  93. Your blog has been invaluable, providing us with actionable insights and tips that have significantly enhanced our work. We deeply appreciate your dedication to sharing such high-quality content. Thank you immensely for your contributions. Please continue to grace us with your expertise through your insightful blogging endeavors.

  94. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  95. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  96. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  97. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  98. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  99. Whether you’re a writer, marketer, or simply someone intrigued by the capabilities of AI, this blog will provide valuable information into Bard AI and its potential applications and How it works?

  100. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  101. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  102. is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

  103. This is such a great resource that you are providing and you give it away for free. I love seeing websites that understand the value of providing a quality resource for free. It is the old what goes around comes around routine.

Comments are closed.

Must Read