KARACHI: The banking spreads in the country have increased by 10bps during March 2016 to 5.23 percent on MoM, said State Bank of Pakistan.
According to the SBP report, the lending rates during the month remained flat at 8.53pc due to stable interest rates. On the deposit rates front, experts attribute 11bps dip to likely shift in deposit mix towards cheaper sources and re-pricing of term deposits. Fresh spreads improved by 35bps to 3.39pc due to 50bps dip in deposit cost to 3.74pc.
During 1QCY16, banking spreads declined by 11bps QoQ to 5.16pc. Though, policy rate has remained stable during the quarter, loan re-pricing has dragged the average lending rates down by 25bps to 8.56pc while deposit rates declined by 14bps to 3.39 percent.
In line with non-consensus estimate, Pak Banks deposit growth clocked in at 16 percent YoY in 2015 surpassing 3-year (2012-2014) average growth of 12 percent YoY as deposits reached Rs9,676 billion. Advances also increased by 10 percent YoY to Rs4,905 billion in 2015, where 70 percent of the growth came during 2H2015. Investments too escalated by 31 percent YoY to Rs6,711 billion. M2 growth clocked in at 14 percent in 2015, however remained lower vs. 16 percent growth in 2014.
