The bank advances, deposits and investments raised by 17 percent to Rs 19.9 trillion in the past 12 months from January 2021, the State Bank of Pakistan has described on Thursday.
The balance sheets related to all listed banks displayed they received healthy profits through the calendar year 2021. The raised fluidity also reinforced the private sector which hired record money in this time period.
Though, the greater bank deposits aided the banks to capitalize more in the government papers to get risk-free profits.
The data gathered shows the investment of the banks raised by 26 percent to Rs 14.4 trillion in January as compared to Rs 11.4 trillion in January 2021 because the government trusts completely on banks for local borrowing.
Read more: Bank deposits surge to all-time high in FY21
In recent times, the government has altered its policy and started scrounging extra from the non-bank sector like insurance and other corporate sectors. The régime is passing through liquidity problems owing to limitations from IMF not to scrounge from the central bank since 2018.
Moreover, the loans of the banking system have also enlarged by 17.4 percent to Rs 9.944 trillion as compared to Rs 8.467 trillion in January 2021, which reflect the greater borrowing by the private sector.
As a result, the government has started to believe that the higher private sector borrowing is a replication of higher economic activities whereas it has anticipated attaining a growth rate of more than 5 percent in FY22.
The ratio of advance-to-deposit to some extent edged up to 49.8 percent in January as compared to 49.6 percent in January 2021.
But, the ratio of investment-to-deposit moved up by 546 basis points to 72.3 percent in the period under examination from 66.8 percent in January 2021.
Banking is one of the finest profit-making businesses while it accomplished defensible growth in an economy where most of the regions are susceptible.