The banks have managed to achieve a record high profit despite economic slowdown and underperforming industrial activities in the country. “In calendar year 2023, the banking sector in the listed space witnessed significant profits (i.e., 86% year-on-year) driven mainly by policy rate hikes of 600 basis points coupled with volumetric growth in deposits (over 24% in 2023 compared to 2022),” she said. Government securities account for 51% of Pakistani banks’ total assets and around nine times their equity. AHL expert Tawfik further said that in 2023 the banking sector demonstrated an outstanding performance, achieving remarkable milestones that surpassed previous records. The government borrowed from banks for deficit financing, but the money continued to remain parked in banks, which inflated the deposit size.

Source: The Express Tribune March 13, 2024 12:14 UTC