SBP incurs net loss of Rs 1.04 billion in FY19 due to a 6x increase in exchange loss

October 31, 2019 (MLN): The Board of Directors of the State Bank of Pakistan, in its meeting held on October 12, 2019, approved the Annual Performance Review on the working of the Bank and its subsidiaries and the financial statements for the year ended June 30, 2019.

According to the report, SBP has incurred a net loss of Rs. 1,043 million in FY19 as compared to a profit of Rs. 175,673 million in FY18. The decline is primarily attributed to an exchange loss of Rs. 506,131 million during the current year as compared to an exchange loss of Rs. 72,280 million in the previous year.

The decrease was, however, partly offset by an increase of Rs. 254,351 million in the net interest income. The lending to the Federal Government remained the major source of SBP’s profit followed by earnings on the OMO injections.

These major income streams are offset by the increase in interest expense on liquidity mop-up from the domestic financial market and an increase in interest expense on international deposits. The expenses also witnessed a growth of 5 percent during the year.

The note printing charges and General administrative and other expenses are the major expense heads that witnessed growth while agency commission paid to agent commercial banks for undertaking government banking business on behalf of the Bank witnessed slight decrease during the year.

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