State Bank of Pakistan in its review report published Wednesday noted satisfactory performance in Pakistani banking sector’s first half of the year 2020, ARY News reported.
“Banking Sector’s performance and resilience remained satisfactory during H1CY20”, says the Mid-Year Performance Review of the Banking Sector released by the central bank today.
According to the press statement, the review comprehensively covers the performance and soundness of the sector for the period of January to June 2020 (H1CY20).
The review suggests that despite “elevated economic stress driven by the COVID-19 pandemic”, the assets of this sector witnessed a decent expansion of 7.8 per cent during this period.
“Robust increase in investments, funded by a surge in deposits, explains this growth.”
Advances, on the contrary, observed mild downtick owing to economic slackness caused by a disruption in the business activities after the outbreak.
However, it noted that with supportive measures extended by the central bank, the contraction in market financing was considerably contained.
READ: SECP considers regulating virtual assets worth over €7 billion worldwide
The review report also highlighted that the policy measures rolled out by SBP facilitated the banking sector in conserving the capital, enhancing the lending capacity and increasing the loss absorption ability.
As a result, despite some increase in credit risk, banking sector demonstrated improved profitability and enhanced resilience.
According to the report, the profitability in this period jumped by 52% compared to the corresponding period last year. “This improvement resulted from higher interest income, deceleration in interest expenses and rise in non-interest income,” the reported said.
){kind=link}