Pakistani banks have had a ball in the past one year with record profitability at the back of high-interest rates. The government’s never-ending appetite for deficit financing means that the local financial institutions have ample liquidity in the form of benevolent lending by the State Bank of Pakistan (SBP) aka repo transactions.
Profit has previously covered how Development Finance Institutions (DFI) like Pak Kuwait Investment Company (PKIC) and Microfinance players like U Microfinance Bank (UBank) have leveraged the current monetary and fiscal environment to increase the size of their balance sheets by 3-6 times.Â
Little did we know back then that one of the largest commercial banks in the country, United Bank Limited (UBL) would be inspired by this high-risk strategy and go all guns blazing in 2023 as a loaded investment entity.  The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
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after reading the whole article I could not understand how interest rates drop effects existing income generating assets/bonds…
For example if I a bought a bond worth 100 PKR at a yield of of 20% with a maturity in a year. I will be earning 20 PKR on my investment.
Now if the interest rates drop in my second quarter of investment, yes the yield of my bond will drop but the yield at which I bought was 20% and I will be still getting my 20 PKR at year end..
the worst Bank I’ve ever seen . they scam with their employees,one of my friend is working more than a 7 year in ubl still he’s a contractual staff not permanent staff. Low salary around 35 basic and no other benefits. useless bank of the history.
Its a great insights about HBL after a long time.