Islamabad, Jan 5: According to the latest data from the State Bank of Pakistan (SBP), the country’s banking sector saw a significant increase in bank advances, which grew by Rs. 700 billion as of December 27, 2024. The sector’s Advance-to-Deposit Ratio (ADR) also improved to 51.8 percent, marking a notable recovery from its previous low of 38.4 percent in August 2024. This increase of 13.5 percentage points over the last few months reflects a positive shift in the banking sector’s lending activities.
Despite this growth in advances, the overall banking sector deposits decreased by 2.3 percent between August and December 2024. Bank deposits stood at Rs. 30.1 trillion as of December 27, down from Rs. 31.1 trillion in November, a decline of 3.2 percent month-on-month (MoM).
On the other hand, advances reached a total of Rs. 15.6 trillion by the end of December 2024, reflecting a 4.7 percent increase compared to Rs. 14.9 trillion at the end of November. This surge in advances is indicative of increased lending activities despite a slight reduction in the overall deposit base.
In terms of investments, the banking sector saw a smaller increase of Rs. 0.3 trillion, or 1 percent MoM, bringing the total value of bank investments to Rs. 29.3 trillion. Additionally, the Investment-to-Deposit Ratio stood at 97.3 percent as of December 27.
The latest figures indicate that while the banking sector has faced challenges with declining deposits, it has managed to boost its lending activities significantly, signaling a recovery in the sector’s overall performance. The improved ADR and steady increase in investments suggest a cautious yet optimistic outlook for the banking sector as it navigates the ongoing economic conditions.
