Strong deposit growth bodes well for Pak banks

Pakistan Today (Karachi) - - BUSINESS -

De­posits at Pakistan’s com­mer­cial banks reached Rs11.2 tril­lion as of De­cem­ber 30, 2016, some 20.4 per cent year-on-year growth in de­posits com­pared to the last three years, Khaleej Times re­ported. Bank­ing and eq­uity sec­tor an­a­lyst Umair Naseer of To­pline Se­cu­ri­ties said this was sig­nif­i­cantly higher than the his­tor­i­cal aver­age growth of 12 per cent in the past three years. He added that the strong deposit growth boded well for banks as it re­mained the key earn­ing driver in a low in­ter­est rate en­vi­ron­ment. At this level, banks ad­vanced Rs 5.6 tril­lion to the pri­vate sec­tor in 2016, which was 17 per cent more than 2015 when only Rs 4.8 tril­lion was sanc­tioned. This is a suc­cess story for the bank­ing sec­tor as it took place at a time when some sec­tors of the econ­omy, in­clud­ing the big­gest one such as tex­tiles – are still strug­gling to match their good per­for­mance in the past. At the same time, ex­ports, hit by the in­ter­na­tional crash of oil and com­mod­ity prices and lower do­mes­tic out­put, de­clined from $24 bil­lion to $19 bil­lion in 2016.

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