Banking spread shrinks, a first in 7 months

MG News | May 27, 2019 at 12:27 PM GMT+05:00

0:00

May 27, 2019 (MLN): The Banking sector spread for April 2019 has narrowed by 33 basis points (bps) over the month as it shrunk from 5.67% in March 2019 to 5.34%.

According to data maintained by the State Bank of Pakistan, this marks the first time in seven months when the spread has reduced. However, when compared to the corresponding period of last year, the spread has grown by 50 bps this month.

The lending rate for all banks (inclusive of zero markup) in April-19 stood at 11.15% whereas the deposit rate stood at 5.81%.

It is pertinent to mention here that the central bank had pushed up monetary policy rates by 50 bps which brought them up to 10.75%, effective from April 1, 2019.

This along with the added impact of higher inflation has resulted in a tapered banking sector spread this month.

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