Remittance growth credit positive for Pakistani banks: Moody's

Rating agency Moody's has termed growth in remittances in Pakistan as credit positive for banks, saying foreign inflows improve their access to low-cost and stable deposits.

Moody's in its latest report on Pakistan has stated that increase in workers' remittances for 7MFY21 is contrary to their expectation that the pandemic would keep remittances flat and the World Bank's forecast of a sharp decline in global remittances.

It maintained that the increased remittances support Pakistani households' disposable income and borrowers' repayment capacity, reducing the potential for nonperforming loans (NPLs).

"Pakistani banks' consumer lending has historically outperformed lending to companies, and consumer loan NPLs accounted for 4.9% of gross loans as of 31 December 2020, compared with 9.4% for corporate loans," it said.

"Increased remittances and resulting higher household incomes are also likely to facilitate increased mortgage, small and midsize enterprise and agricultural lending, which are important components of the government's financial inclusion targets." Pakistan's government is planning to issue a $500 million green bond in the next few months to help boost its development of hydroelectric power.

The bond, denominated in euros, will be the government's first to fund environmental goals, Malik Amin Aslam, an adviser to Prime Minister Imran Khan on climate change, said in an interview. It is set to be issued through the country's state-owned Water & Power Development Authority, with JPMorgan Chase & Co. advising, he said. "We've got a lot of hydro potential in Pakistan," he said on Thursday. "The bonds are there to accelerate this."

Khan's government is investing in renewable energy to ramp up its economic stimulus in the wake of the pandemic. It's also promised to ban new coal power plants and is looking to plant 10 billion trees. The nation's cities rank among the worst globally for air pollution, according to IQAir.

The South Asian nation has a fragile economy that goes through regular boom and bust cycles. It received debt relief during the pandemic, restoring its $6 billion bailout program that it secured from the International Monetary Fund in 2019 to avoid bankruptcy.

Issuance of green bonds globally is seen surging to $375 billion in 2021 by Moody's Investors Service, after record sales last year. While Europe has led the way, countries from Singapore to Brazil plan to sell their first to tap buoyant investor demand.

Minister for Information and Broadcasting Senator Shibli Faraz said on Monday that Sindh government had arrested Opposition Leader in the Provincial Assembly Haleem Adil Sheikh on political grounds to victimize him for exposing its corruption and inefficiency.

Addressing a press conference here, he demanded immediate release of Haleem Adil and said that inefficient and corrupt Sindh government had politicized the institution by induction of its own people in the department.

Shibli Faraz said that the main opposition parties had the network of criminals which they use for both business interests and politics. He said that the in recent Tharparkar bye-elections, the Pakistan Tehrik-e-Insaf workers were harassed and intimidated by misusing the government institutions. He said that arrest of the Haleem Adil was also an effort to influence the upcoming Senate elections. He said that the plight of Sindh province was a proof of inefficiency and corruption of the government and Haleem Adil was the person who had been exposing the Sindh government's corruption.

The minister said if an elected member and leader of the opposition was not safe in Sindh one could image how would be the situation with the common man. Asif Zardari used to claim that there were no political prisoners during the PPP rule but this was the worst example of political victimization, he remarked. The minister said that the Sindh government was protecting the interests of only one class whereas the poor people especially in the rural areas were facing great hardships and even they did not benefit from the slogan of "Roti, Kapra aur Makan".

He said despite having no majority, the PPP was claiming that its candidate would win which was in a sense confession of indulgence in the horse trading. He said Imran Khan had the principled stance since past over two decades, that neither the economy, nor democracy or society's ethical values could improve without ending the role of money in politics.

The minister said that politics of bullying, violence and terrorism could not be called democracy.

He said that the government was standing firm on its stance of transparency in electoral process to ensure that fruits of democracy should reach the common man.

He recalled that the PTI was the only party which expelled its members of the assembly for selling their votes in 2018 and the PTI was the only party which was practicing what it was advocating.

He said that this was a contest between transparency and the forces of darkness as Imran Khan wanted transparency and fairness whereas his opponents comprising PDM represented the corridor of darkness, corruption and horse trading and time had come to defeat this mentality. Replying to the questions of the media persons, he said PTI did not believe in give and take in politics and when the opposition parties were asked to explain the sources of their assets, they cry foul and claim they were being victimized.

The minister said that PTI performance had improved in the bye elections and in the constituency of Wazirabad that it lost the margin was narrow whereas in Daska, the PTI candidate was wining.

He said that that the PML-N had believed in politics violence and terror whereas the PTI had a political struggle and it had accepted the results of the bye elections. He said that PML-N leader Shahid Khaqan Abbasi had said last month that now elections would be held on gun point and they had proved that by firing on the PTI workers in Daska.