Lahore: A report, compiled by the KPMG Taseer Hadi & Co Chartered Accountants, recently revealed that Pakistan’s banking sector had exhibited ‘stellar performance’ in 2019, a news source reported. The publication further indicates that an increase in interest rates during 2018 was the reason behind the 27.5% rise in profitability seen during the preceding period.
The report also revealed that the Islamic Banking sector also performed well; registering an increase of 90.6% in profitability. It added that the overall banking industry showed an annual increase of 12.3% in deposits and 4.7% growth in advances. According to this report, the availability of government paper and high returns also contributed to banks earning healthy and secure returns.
The report was of the view that 2020 would be a difficult year for the banking sector given the ongoing pandemic. It added that post-pandemic situation was unpredictable as the profitability was expected to be under pressure due to reduced offtake of advances because of recessionary market conditions. Similarly, cautious customer outlook, decrease in fee income on distribution of wealth products due to volatility in capital markers, and increased credit losses as a consequence of lockdowns would also contribute to a difficult year.
