The deposits of the banking sector of Pakistan showed constant growth of 15% year-on-year (YoY), clocking in at Rs 26.3 trillion, as per data provided by the State Bank of Pakistan (SBP). High-profit rates continue to attract depositors to the bank to invest in PLS accounts, term deposit certificates, mutual funds, etc.
The investment made by commercial banks, especially in government securities, reported a boost of 29% YoY in September 2023 compared to the same period last year.
Banks’ investments hit Rs. 22.62 trillion in September against Rs. 17.48 trillion in SPLY. On a month-on-month basis, investments by the banking industry delivered a 2.7% increase compared to August, when they stood at Rs. 22.01 trillion.
Commercial banks invest depositors’ savings in Sukuks and T-Bills, generating a secure profit from the cash-hungry government at a higher lending rate. The bank’s advances also grew by 11 percent YoY to stand at Rs. 11.85 trillion by the end of Sep-2023.
During the period under review, the advance-to-deposit ratio (ADR) dropped from 48% to 45%. On the other hand, the investment-to-deposit ratio (IDR) increased by 86% YoY.