Banks’ outstanding loans to private sector businesses amounted to Rs3.984tn at the end of October, 2017, which was 20.83% up from the same period a year ago, the central bank of Pakistan’s data showed yesterday.
Banks continued to extend credit buoyed by demand from companies and consumers. The increased bank lending was reflective of favourable supply as well as demand conditions in the economy.
Though, a major impetus came from falling interest rates, improvement in liquidity conditions and perceived credit risks compelled banks to increase their exposure towards private sector advances.
October loan data revealed that a larger part of the loans to private businesses were availed by the manufacturing sector, within which the most active borrowers were the producers of textiles, food and beverages, and rubber and plastics.
Banks’ outstanding loans to the manufacturing sector rose to Rs2.298tn at end October from Rs1.845tn in the corresponding period of last year. Commerce and trade sector obtained Rs313.7bn from financial institutions, compared with Rs265.1bn a year
The SBP’s data indicates that banks continued to give significant credit support to the economy by leveraging energy and infrastructure projects under China-Pakistan Economic Corridor and higher development related expenditure.
Analysts said banks look set to extend private sector advances in months to come, owing to growing demand for working capital requirement from cement, infrastructure and energy-related entities, and food and sugar manufacturers.
SBP’s cheaper refinancing schemes are also expected to receive appeal from textiles, sugar, and fertiliser sectors for long-term loans. The SBP’s figures showed that consumer loans stood at Rs413.8bn in October against Rs341.9bn last year.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Asia markets start week on cautious note
SoftBank’s Son seeks to raise $21bn in IPO to fund tech deals
Oil looms over EMs as no end in sight for US-China trade row
Hedge funds enforce correction to oil market’s course
Germany’s SAP agrees to buy Qualtrics for $8bn in cash
Philippine delegation offers Qatar firms tie-up opportunities in furniture sector
QIB adjudged Qatar’s ‘Best Consumer Digital Bank’ by Global Finance magazine
QBA underlines Qatar’s interest in African market
Crude oil prices continue to drop