Banks fo­cus on con­sumer finance

The Pak Banker - - FRONT PAGE -

LA­HORE: Con­sumer fi­nanc­ing has seen a surge in the last two fis­cal years pri­mar­ily due to a big jump in auto loans and to some ex­tent in mort­gage finance. Banks had made net con­sumer fi­nanc­ing of Rs31.2bn in FY14 and Rs31.3bn in FY15. This was equal to 10.5pc and 17.3pc of their net lend­ing of Rs298bn and Rs180bn to pri­vate sec­tor busi­nesses (PSBs) in the last two fis­cal years re­spec­tively, SBP data show. In the first seven months of this fis­cal year, banks made Rs4bn worth of net hous­ing loans against Rs14bn auto loans. The rea­son for this is many an­nounce­ment of mega hous­ing projects. "And, we see even greater de­mand for mort­gage finance in near fu­ture as part of money cir­cu­lat­ing out­side the bank­ing sys­tem is be­ing pumped into real estate devel­op­ment," says an ex­ec­u­tive of Na­tional Bank of Pak­istan. "Be­sides, restora­tion of peace and or­der in Karachi is en­cour­ag­ing real estate de­vel­op­ers to of­fer new hous­ing schemes for dif­fer­ent cat­e­gories of mid­dle in­come groups." Till the end of the last fis­cal year in June 2015, net new hous­ing loans to­talled about Rs1bn. Against this, net auto loan­ing, which makes up the bulk of con­sumer finance, stood close to Rs10bn. A surge in hous­ing loans seen dur­ing this fis­cal year is strong enough to keep up growth trend in over­all con­sumer fi­nanc­ing even if auto loans face a weaker de­mand in near fu­ture.

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