State Bank of Pakistan has made a profit of Rs. 238.064 billion in the financial year 2016-17 as against of the profit of Rs. 229.353 billion reported in the previous financial year of 2015-16, registering a modest year-on-year growth of 4 percent during the period.
The growth in profit is attributable to increase in the discount income by Rs. 21.086 billion and interest earned on foreign asset by Rs. 5.365 million partly offset by decrease of Rs. 17.519 billion in income on reverse repo transactions.
The lending to the Federal Government and commercial banks remained major sources of SBP’s profit followed by earnings on the foreign exchange reserves.
The interest / markup income increased by just over 3 percent to Rs 260.871 million. However, the interest earned on lending to Federal Government increased by 14 percent due to a significant rise in the government borrowings from the SBP.
SBP’s Assets & Liabilities
The assets of SBP stood at Rs 6,866 billion as at June 30, 2017 as compared to Rs 6,450 billion on June 30, 2016, registering an increase of Rs 416 billion primarily due to increase in investments in Market Related Treasury Bills.
The increase is further augmented due to acquisition and consolidation of PSPC assets which led to an increase of Rs 71 billion in the balance sheet of the bank. The liabilities of the SBP stood at Rs. 6,296 billion as at June 30, 2017 as compared to Rs 5,830 billion as at June 30, 2016, registering an increase of Rs 466 billion.
The increase in GDP growth led to an increase in currency in circulation while banks’ deposits also witness a significant growth due to improved liquidity in the market. The increase was partly offset by decrease in government balances at year end.
SBP’s Expenditures In FY17
The growth in expenses during the year also remained modest with just over 2 percent increase. The note printing charges, agency commission paid to National Bank of Pakistan are the major expense heads constituting over 90 percent of the expenses.
In FY17, the central bank added another subsidiary i.e. the Pakistan Security Printing Corporation (PSPC) at the cost of Rs. 100 billion.
The total expenditure during the year was Rs. 41.745 million as against Rs. 40.855 million in FY16, thus registering an increase of 2.18 percent over the previous year’s expenditure. The increase was due to 18 percent and 8 percent rise in the banknote printing chares and agency commission respectively, impact of which was partly offset by reduction of Rs 2.5 billion in salary cost and retirement benefits.