Business News

ISLAMABAD, (APP): The flows of Credit to Private
Sector (CPS) have seen expansion of 82 percent during the
fiscal year 2016 compared to the contraction of 41.5 percent
during same period last year.
The flows of CPS stood at Rs.311.7 billion from July-6th
May (FY2016) against Rs.171.2 billion in the same period of
last year, according to Pakistan Economic Survey.
The outgoing fiscal year FY 2016 has seen more expansion
in credit to private sector due to expansionary monetary
policy stance by SBP.
SBP cut its policy rate significantly to 5.75 percent in
May, 2016 which is the lowest in 44 year.
Broad Money (M2) increased to Rs.781.8 billion (6.93
percent) during the period against the expansion of Rs.690.0
(6.92 percent) last year.
Within Broad Money, NFA of the banking system during
observed an expansion of Rs.105.2 billion against the net
expansion of Rs.222.3 billion during the corresponding period
of FY2015.
The NDA of the banking system showed an increase of
Rs.676.6 billion against an increase of Rs.467.6 billion.
Higher increase was on the back of significant rise in
Private Sector Credit (PSC). A welcome development is the
gradual rise in net credit disbursement for fixed investment,
it said adding it appeared that many firms are expanding their
operations by availing fixed investment loan.
Government sector borrowing (net) reached to Rs.567.5
billion during Jul-06th May, FY 2016 as compared to an
increase of Rs.539.4 billion in the same period of FY 2015.
Net budgetary borrowing from banking system remained at
Rs.643.0 billion compared to Rs.560.8 billion in the same
period last year.
Government borrowing from scheduled banks remained lower
and stood at Rs.702.9 billion against Rs.1,093.2 billion in
comparable period of last year. While, government retired
Rs.59.8 billion to the State Bank of Pakistan during the
period Jul-06 May, FY 2016 against the retirement of Rs.532.3
billion in the same period of FY 2015.
The overall performance of the banking sector during the
last couple of years has been quite impressive and the
momentum continued in the FY2016 with asset base reaching to
Rs.14.3 trillion by end March, 2016 (Rs.12.1 trillion as of
end March, 2015).
Similarly, asset quality has also improved and gross
NPLs to loans ratio reduced from 12.3 percent in CY14 to 11.4
percent in CY15.
Whereas, Capital Adequacy Ratio (CAR) increased to 16.3
percent by end March, 2016 that is much strong and higher than
the minimum required level of 10.25 percent.