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Category: Money & Banking

Money and banking drive economic activity by facilitating transactions, savings, and investments. Banks manage financial resources, offer credit, and regulate money supply, ensuring stability and growth in Pakistan’s financial sector.

  • SBP to announce monetary policy on March 17

    SBP to announce monetary policy on March 17

    KARACHI: State Bank of Pakistan (SBP) will announce monetary policy statement for next two months on March 17, 2020, a statement said on Monday.

    The monetary policy committee (MPC) will review the existing policy rate along with economic indicators and inflation.

    The SBP kept the policy rate at 13.25 percent during the three policy statement.

    The SBP kept the policy rate unchanged at 13.25 percent since July 2019 on the back of uptick in prices of consumer items.

    Market analysts anticipate 100 basis points cut in policy rate due to sharp decline in world oil prices and improvement in economic indicators.

  • Rupee witnesses massive depreciation as stock market crashes

    Rupee witnesses massive depreciation as stock market crashes

    KARACHI: The rupee fell by Rs2.34 against dollar on Monday due to panic prevailed following massive decline in global stock markets.

    The rupee ended Rs156.58 to the dollar from last Friday’s closing of Rs156.24 in interbank foreign exchange market.

    Currency experts said that due to high volatility in the local stock market the currency market followed the suit. The benchmark KSE-100 of Pakistan Stock Exchange (PSX) recorded decline of 1161 points on Monday.

    However, they believed that the falling international oil prices would help the local currency to make gain in coming days.

    The foreign currency market was initiated in the range of Rs154.52 and Rs154.70. The market recorded day high of Rs156.70 and low of Rs154.70 and closed at Rs156.58.

    The exchange rate in open market also witnessed depreciation in rupee value. The buying and selling of dollar was recorded at Rs156.70/Rs157.00 from last Friday’s closing of Rs154.00/Rs154.30, in cash ready market.

  • Rupee falls in early trade as stock market crashes

    Rupee falls in early trade as stock market crashes

    KARACHI: The foreign currency market followed the stock market decline as Pak Rupee depreciated by 81 paisas against dollar in early trading on Monday.

    The dollar is being traded at Rs155.05 in early trade in interbank foreign exchange market.

    The rupee was ended Rs154.24 to the dollar on last Friday trading.

    Earlier in the day the stock market was crashed and stopped trading. The market fell below five percent on record low in international oil prices.

    Analysts at currency market said that the currency market was facing import of uncertainty in the stock market.

  • Banks directed to observe working on weekly holidays for Hajj form collection

    Banks directed to observe working on weekly holidays for Hajj form collection

    KARACHI: In a move to ease the process for prospective Hajj pilgrims, the State Bank of Pakistan (SBP) has issued a directive to banks, instructing them to keep their doors open on weekends.

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  • Investment in registered prize bonds witnesses 213% growth

    Investment in registered prize bonds witnesses 213% growth

    KARACHI: The investment in registered prize bonds of Rs40,000 denomination have registered phenomenal increase of 213 percent following discontinuation of bearer instruments of same denominations, official data revealed.

    The investment in premium prize bonds surged to Rs18.37 billion by end of January 2020 as compared with Rs5.86 billion in the same month of the last year.

    The sharp growth in investment into premium prize bonds has been attributed to discontinuation of bearer bonds of same denomination.

    In order to document the economy the government launched premium prize bonds in April 2017. The premium prize bonds are being issued only against CNIC with valid bank accounts.

    Further to make the instrument attractive the government also announced bi-annual profit, which transferred directly to the bond holders.

    The participation of investors into registered bonds increased sharply after the announcement of the government on June 24, 2019 to discontinue the bearer bonds of Rs40,000.

    The bearer bonds of Rs40,000 will be completely discontinued for legal tender by March 2020.

    A massive withdrawal of investment has been seen in the bearer instrument as the total investment which was at Rs258 billion in May 2019 reduced to Rs9.57 billion by January 2020.

    The State Bank of Pakistan (SBP) through a circular said that the bearer instrument can be exchanged in savings schemes such as Special Saving Certificates (SSC) or Defence Saving Certificates (DSC). The third mode of exchange the bearer bonds was direct transfer to bank accounts.

    The investment in registered bonds was also increased after the government initiatives to document all instruments of National Saving Schemes as per conditions of Finance Action Task Force (FATF).

    In this regard the ministry of finance notified National Savings Schemes (AML and CFT) Rules, 2019.

    Under these rules the Central Directorate of National Saving (CDNS) through third party will conduct Know Your Customer (KYC) and Customers Due Diligence (CDD) of all existing and new investors.

    The CDNS will ask all the investors about their annual investment and source of earnings under KYC and CDD in order to ensure clean money invested in the schemes.

  • Rupee ends down by five paisas against dollar

    Rupee ends down by five paisas against dollar

    KARACHI: The Pak Rupee ended five paisas down against dollar on Thursday owing to demand for import payment, dealers said.

    The rupee ended Rs154.27 to the dollar from previous day’s closing of Rs154.22 in interbank foreign exchange market.

    The dealers said that earlier in the date the rupee gained value owing to inflows of workers remittances and export receipts. However, later import payment demand deteriorated value of the local currency.

    The rupee gained values during the past few days owing to lower demand for import payment after coronavirus spread in many countries.

    The exchange rate in open market witnessed no change in rupee value. The buying and selling of dollar was recorded at Rs154.00/Rs154.30, the same previous day’s level, in cash ready market.

  • Standard Chartered Pakistan announces 42.5% growth in after tax profit

    Standard Chartered Pakistan announces 42.5% growth in after tax profit

    KARACHI: Standard Chartered Bank Pakistan has declared massive growth of 42.5 percent in after tax profit for the year ended December 31, 2019.

    The bank declared Rs16.017 billion profit after tax for the year 2019 as compared with Rs11.239 billion in the last year.

    The bank also declared earnings per share at Rs4.14 as compared with Rs2.9 billion in the last year.

    The profit before tax was recorded at Rs27.199 billion for the year 2019.

    The bank in its annual report said that a record performance in 2019 by the bank enabled it to deliver a profit before tax of Rs27.2 billion. “This is 47 percent higher than the corresponding period last year and the highest profit since incorporation.”

    Overall revenue growth was 37 percent, whereas client revenue increased by 31 percent year on year with positive contributions from transaction banking, financial markets and retail products.

    Operating expenses increased by only 2 percent year on year on account of spending mainly on the bank’s products, services and people to grow the franchise.

    All businesses have positive momentum in client income with strong growth in underlying drivers.

    Momentum in advances (net) continues with 29 percent growth since the start of the year. This was the result of a targeted strategy to build profitable, high quality and sustainable portfolios.

    With diversified product base, the Bank is well positioned to cater for the needs of its clients. On the liabilities side, the Bank’s total deposits grew by 10 percent, whereas current and saving accounts grew by 8 percent since the start of this year and are now 93 percent of the deposits base.

    The optimal funding structure of the balance sheet continues to support the Bank’s performance. During 2019, the bank contributed around Rs18.6 billion to the national exchequer in lieu of direct income taxes, as an agent of Federal Board of Revenue (FBR) and on account of FED / Provincial Sales Taxes.

    The bank continues to invest in its digital capabilities and infrastructure to enhance our clients’ banking experience through the introduction of innovative solutions.

    “We have made steady progress in further strengthening our control and compliance environment by focusing on our people, culture and systems. We are fully committed to sustained growth by consistently focusing on our clients and product suite along with a prudent approach to building the balance sheet while bringing the best in class services to our customers.”

  • Rupee gains seven paisas on lackluster dollar demand

    Rupee gains seven paisas on lackluster dollar demand

    KARACHI: The Pak Rupee gained seven paisas against dollar on Wednesday owing to lower import and corporate demand, dealers said.

    The rupee ended Rs154.22 to the dollar from previous day’s closing of Rs154.29 in interbank foreign exchange market.

    The currency dealers said that lackluster demand was seen from importer and corporate buyers for the dollar.

    The said that due to coronavirus threat, which spread in many countries, many states imposed restrictions imports from those countries where infections had been detected.

    Certain checks have also been imposed by the government on imports from such countries particularly from China, which is the center-point of this epidemic.

    The exchange rate in open market witnessed no change in rupee value. The buying and selling of dollar was recorded at Rs154.00/Rs154.30, the same previous day’s closing, in cash ready market.

  • Banking deposits hit all-time high on attractive policy rate

    Banking deposits hit all-time high on attractive policy rate

    KARACHI: The deposits of banking system hit all-time high of Rs14.672 trillion by end of January 2020 owing to higher returns on attractive interest rates.

    According to State Bank of Pakistan (SBP), the deposits of banking system grew by 12.36 percent to Rs14.672 trillion by January 2020 as compared with Rs13.057 trillion in the same month of the last year.

    The banking deposits were previously hit all-time high of Rs14.632 trillion by end of December 2019.

    Analysts said that the higher interest rate attracted the investors to keep their money in banking system for higher returns.

    The SBP kept the policy rate unchanged at 13.25 percent in the last monetary policy on January 28, 2020.

    The analysts also believed that the slowdown in economy also discouraged new investment in the industrial and other avenues. Therefore, profit through banking deposits has become prime option.

    The higher deposits also provided room for banks to invest in government papers. The higher investment in government securities resulted in significant profitability of the banks.

    Analysts said that the year 2019 was an exceptional year for the banking sector with profitability increasing by 20 percent or Rs30 billion to reach Rs177 billion, in spite of economic slowdown.

    The primary driver this year has been the net interest income which has increased by 27 percent from Rs486 billion to Rs620 billion, which is mainly due to higher interest rates.

    Weighted average policy rate in 2019 remained 12.2 percent compared to 7.2 percent in 2018.

    In absolute terms, the highest yearly profit was earned by MCB bank (Rs23.8 billion) followed by UBL (Rs19 billion) and NBP (Rs16.6 billion). However in terms of earnings growth BIPL came out on top with 247 percent growth followed by MEBL with 73 percent and AKBL with 58 percent growth, said analysts at Arif Habib Limited.

    As mentioned Net Interest Income (NII) of the banks remained major earnings driver in 2019. In Pakistan rising interest rates bodes well for banks as around 34 percent of deposits are non-remunerative (Current Deposits on which banks give no return) that leads to a higher spread. Top banks with the highest growth in NII are BIPL (78 percent), MEBL (65 percent) and SCBPL (50 percent).

  • UBL continues de-risking strategy in international operations

    UBL continues de-risking strategy in international operations

    KARACHI: The United Bank Limited (UBL) has continued its de-risking strategy in its overseas operations, with the business model focused on selective lending mainly to established corporates with a longer term business relationship with the bank.

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