The banking sector’s investment hit an all-time high of Rs. 14.4 trillion in January, owing to better profit rates on government papers and different savings products.
Bank investments increased by 2.13 percent to Rs. 14.4 trillion in January 2022, according to the State Bank of Pakistan (SBP), up from Rs. 14.1 trillion a month earlier.
The newly increased profit on Treasury Bills, Pakistan Investment Bonds, and Government Ijarah Sukuk has enticed banks to park more money in these channels in order to increase their profit margins.
Bank deposits and advances, on the other hand, decreased in January 2022 compared to December 2021.
The banking sector’s deposits fell by 4.80% to Rs. 19.9 trillion in January 2022, compared to Rs. 20.9 trillion recorded in December 2021. Bank advances fell to Rs. 9.9 trillion in January from Rs. 10.1 trillion the previous month.
The decline in deposits is seasonal, but the decline in advances might be related to increased interest rates, which drove borrowers away from banks.