CosmicTaco

Pakistan’s Banks Reap Profits Amid Government Debt Surge

CosmicTaco · 2024-07-31T14:29:27.244551+05:30

- Pakistan's banks have seen significant profits due to high interest rates and government debt, with seven of the top 15 banks in Asia-Pacific by returns being Pakistani. - The banking sector's after-tax profit nearly doubled to Rs642.2bn in 2023, despite the country's economic contraction and high inflation. - Government debt has ballooned, with domestic debt reaching over Rs43tn by March 2024, leading banks to heavily invest in government securities. - The financial sector has driven a stock market boom, but high government borrowing limits private sector lending, which is among the lowest globally. - Despite high profits, banks face risks of default and restructuring, and the government is increasing taxes on bank profits to manage the economic crisis. Source: Financial Times

Pakistan's banks have seen significant profits due to high interest rates and government debt, with seven of the top 15 banks in Asia-Pacific by returns being Pakistani.
The banking sector's after-tax profit nearly doubled to Rs642.2bn in 2023, despite the country's economic contraction and high inflation.
Government debt has ballooned, with domestic debt reaching over Rs43tn by March 2024, leading banks to heavily invest in government securities.
The financial sector has driven a stock market boom, but high government borrowing limits private sector lending, which is among the lowest globally.
Despite high profits, banks face risks of default and restructuring, and the government is increasing taxes on bank profits to manage the economic crisis.

Source: Financial Times