Banking sector spreads shrink to 5.19pc
Country Director of World Bank in Pakistan Patchamuthu lllango called on Punjab Chief Minister Muhammad Shahbaz Sharif in Lahore on Monday. Matters of mutual interest, ways to boost cooperation in Education, Health, Agriculture, infrastructure and other sectors were discussed. CM said different development projects are in progress with the World Bank's cooperation. He said modern technical and vocational training has been provided to the youth according to market demand. The World Bank's Country Director expressed interest to further enhance cooperation in different sectors.
Meanwhile, Railways Minster Khawaja Saad Rafique called on Punjab Chief Minister Shahbaz Sharif in Lahore on Monday.
Political issues and matters pertaining to power projects came under discussion. Shahbaz Sharif on this occasion reaffirms commitment to overcome electricity loadshedding by 2018. The Chief Minister said all resources including gas, coal, solar and wind are being utilized to complete various power generation projects. He said Government is determined under the leadership of Prime Minister Muhammad Nawaz Sharif to complete energy projects.
Meanwhile, Banking sector spreads, the average gap between lending rates and deposits rates, has contracted to 5.19pc in Dec'15 vs. 5.28pc recorded in the Nov'15 equaling spread that was last witnessed in March 2004, the eleventh years old level, as per the latest numbers released by the State Bank of Pakistan (SBP). The fall in weighted average lending rate was the prime factor for the compression as the policy rates decreased to 6 percent which may further see a slash of 50 basis points in coming monetary policy. Lending yield on fresh disbursement took a marginal dip of 4bps MoM to 7.28%, below the prevailing yield on 5-yr Pakistan Investment Bond (PIB). The cost of fresh deposits moved in opposite trajectory, increasing by 55bps MoM to 4.58%, compressing fresh spread to 2.70% vs. 3.29% recorded in November 2015.