LAHORE: Led by net interest income and higher capital gains, the country’ banking sector has grown 14 per cent to Rs 175 billion.
The net interest income grew by 20 percent to Rs445 billion and higher capital gains increased by 85 percent to Rs56 billion. Deposit mix of sector during the year improved as CASA (current account and saving account) of the sector increased to 76 percent in 2015 from 75 percent during the previous year.
Advances of the sector surged by 4 percent to Rs4.2 trillion in 2015, lower than last year’s growth of 9 percent. Advances growth of top 5 banks was up 2 percent YoY, whereas growth of smaller banks stood at 8 percent.
The top five banks including, Habib Bank and Allied Bank reported highest credit growth of 6 percent and 5 percent respectively. Within smaller banks, advances growth of JS bank and NIB bank stood at 35 percent and 18 percent, respectively in 2015.
Advance to deposit ratio (ADR) of the sector as a result declined to 44 percent in 2015 against 47 percent in 2014. In contrast investments surged by 29 percent to Rs6.3 trillion driven by increased investment in the government securities. As a result, investment to deposit ratio (IDR) increased to 66 percent in 2015 as compared to 58 percent in 2014.
Total assets of the sector grew by an impressive 17 percent to Rs12.7 trillion aided by strong deposit growth and repo borrowing during the year. Similarly, total equity size of the banks increased by 4 percent to Rs1.1 trillion. Total branch network of the industry grew by 5 percent taking total branches of the industry to 10,487.
Banks have also improved their coverage ratio to 88 percent on an average in 2015 from 83 percent in 2014 which minimizes risk of major uptick in provisioning charge going forward.
