May 27, 2021 (MLN): The total Deposits held by Commercial Banks have grown by 21% YoY to Rs17.56 trillion in 4MCY21, while, on a sequential basis, commercial banks’ deposits went down by 2% MoM from Rs17.9tn which was the highest figure in the last 14 years.
According to the data provided by State Bank of Pakistan (SBP), the growth in Deposits has been fueled by higher Remittances (+56% YoY to $2.78bn in April’21), while lack of cash-based business activity due to COVID-19 may have also resulted in an increase in banking deposits.
Meanwhile, Investments have grown by 27% YoY to Rs.12.417tn in Jan-Apr’21. Whereas, on monthly basis, the investments depicted a marginal decline from Rs12.55tn in the previous month.
Consequently, banks' investment to deposit ratio (IDR) which had already depicted an improvement to 67% in Dec-2020, has now increased to 71% by Apr-2021.
On the other hand, demand for Advances remained muted as it grew by just 5% YoY to Rs8.66tn during 4MCY21 as banks remained wary of overall economic conditions due to COVID-19. However, on a sequential basis, it inched up by 1% MoM, indicating a slightly better economic activity during the month.
The advances to deposits ratio (ADR) has dropped to 49% as of April-2021 from 57% in April-2020.
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