Pakistan’s Banking Sector Increases Its Loan Portfolio By 17%

Pakistan’s banking sector increased its loan portfolio by 17 percent during the last fiscal year. This has resulted in the overall credit going as high as Rs. 15.169 trillion.

The State Bank of Pakistan (SBP) issued credit and loans for classified borrowers showing the latest data from fiscal year 2017 which ended in June. SBP shared details regarding borrowing of banking sector over the last 3 years. This data includes government borrowings as well as credit to the private sector.

The data shows that during the last fiscal year, the government maintained its borrowing trends and remained the biggest borrower. This includes loans from the central bank and commercial banks as well. During the last fiscal year government borrowing increased by 12 percent and overall government loans went up to Rs. 9.131 trillion. On the other hand during FY 2016, the government’s loan stood at Rs. 8.109 trillion. The net increase in credit is Rs. 1.022 trillion.

Government borrowing from the central bank was recorded at Rs. 2.338 trillion and loans from commercial banks was Rs. 6.038 trillion. Private sector loans reached up to Rs. 4.754 trillion. This includes loans for businesses, trust funds, personal loans and other financing.

Private sector loans were led by the enterprise sector during the previous financial year. For businesses, loan volume increased to Rs.3.980 trillion in the current fiscal year. Meanwhile in FY 2016 it was at Rs. 3.355 trillion.

Major borrowers included sectors such as agriculture, fishing, fish farming, mining and quarrying, manufacturing, electricity, gas and water supply authorities.

Personal loans also showed growth, with banks very actively giving out loans to individuals. These loans were as much as Rs. 485 billion. During FY 2016 personal loan volume was Rs. 415 billion. Bank employees reached up to Rs. 110 billion, Consumer Financing Rs.370 billion.

Breaking down the consumer loans, house purchase and construction loan volume was at Rs. 60 billion. Car loans amounted to Rs. 150 billion while credit cards and unsecured loans stood at Rs. 30 billion.

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