Banking Sector Deposits Increase to Rs. 26.8 Trillion in November 2023

The deposits and investments of the banking sector continue to show solid growth translating into handsome margins in the balance sheets of banks. According to the State Bank of Pakistan (SBP), the deposits of the banking industry increased to Rs. 26.8 trillion in November 2023 as compared to Rs. 22.7 trillion by the end of November 2022, showing an increase of Rs. 4 trillion in a year. The high profit rate continued to lure customers to invest in saving accounts, term-deposit certificates, and mutual funds, resulting in the deposit mobilization of the commercial banks maintained an unabated upward trajectory. Similarly, the banks have parked their investments in the government papers and Sukuks thanks to deposits of the customers. The investment of the banks surged to Rs. 24.5 trillion till November 2023 as compared to Rs. 18.4 trillion till November 2022, showing an addition of around Rs. 6 trillion. The investments of the commercial banks are likely to surpass the overall deposits of the industry in the next few months. The advances of the banks reflected a growth of 7.9 percent year-on-year which increased to Rs. 11.9 trillion by the end of November 2023 from Rs. 11 trillion reported by the end of November 2022. The advance-to-deposit ratio decreased to 44.6 percent from 48.5 percent. On the contrary, the investment-to-deposit ratio surged to 91.7 percent from 81.3 percent. These trends are being driven by the high interest rates coupled with low economic activities in the country.