On a month-on-month (MoM) basis, the total deposits held by banks have shown an increase of 2.9 percent to reach Rs 20.47 trillion in March against Rs 19.9 trillion in February due to strong foreign inflows.
The State Bank released the data on Wednesday which showed that the local banks’ deposits hiked by 14 percent on a year-on-year basis in March 2022 against Rs 17.9 trillion recorded in the corresponding month of the last financial year.
According to the SBP statistics, investments increased to Rs 15 trillion in March 2022, a growth of 20 percent on a yearly basis. The higher growth in investments can be attributed to higher borrowings by the sector. During the previous month, the total investments by commercial banks increased marginally by 3% from Rs 14.54 trillion on a sequential basis.
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Meanwhile, the banks’ advances to deposits ratio (ADR) remained fixed at 50% in March 2022 as compared to the last month. However, on a sequential basis, ADR rose by 2ppts from its previous month’s level of 48%.
The banking sector spread in March 2022 jumped by 9 basis points (bps) over the month making its recent value to 4.67% against the previous month’s spread of 4.58 percent.
Likewise, against the corresponding month last year, the spread has been raised by 36bps as it stood at 4.31% in March 2021. The SBP further revealed that the lending rate for all banks increased by 3bps MoM while 177bps YoY to stand at 9.61%. Meanwhile, the rate of deposits held by banks recorded at 4.94%, decreased by 6bps over the month while showing an improvement by 141bps over the year in March 2022.
Besides, fresh lending rates remained at 10.59% in the month under review, increased by 25bps MoM, whereas on yearly basis, it was up by 289bps. Fresh deposit rates rose by 1bps MoM and 187bps YoY to 5.1%. Consequently, in February 2022, the fresh banking spread stood at 5.49%, showing a growth of 24bps MoM and 102bps YoY.