Banks’ deposits surge to Rs21tr in December 2021

January 7, 2022 (MLN): The total deposits held by commercial banks have shown a growth of 17% YoY to almost Rs21 trillion in December 2021, compared to Rs17.87tr in the same month of last year on account of strong overseas inflows, data issued by State Bank showed today.

Similarly, on a monthly basis, local banks’ deposits showed an increase of 6.67% from Rs19.66tr in the previous month.

According to the data provided by SBP, investments jumped to Rs14.12tr in December 2021, showing a growth of 22.25% on a YoY basis. The higher growth in investments can be attributed to higher borrowings by the sector. On a sequential basis, the total investments by commercial banks moved up by 4.2% from Rs13.55tr in the previous month.

Consequently, banks' investment to deposit ratio (IDR) has now increased to 67.34% by end of December 2021 compared to 64.62% in the same month last year, whereas on a monthly basis, it declined from 69%.

Similarly, demand for advances posted positive growth of 19.4% YoY during the month under review to Rs10.14tr, likewise, on a sequential basis, it inched up by 5.2% MoM.

Meanwhile, despite SBP’s efforts to incentivize the advances to deposits ratio (ADR) above 50%, it stood at 48.3% in December 2021 compared to 47.5% in the same month last year, whereas, on monthly basis, ADR dropped by 70bps from its previous month’s level of 49%.

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