Bank deposits fall for the first time in over two years
Contract to Rs5 trillion during January-March.
KARACHI:
Bank deposit fell for the first time in more than two years while the overall balance sheet consolidated in the first quarter of 2011, according to data released by the central bank.
After rising in each of the nine previous quarters, deposits contracted to Rs5 trillion in the period, down 1.5 per cent against the previous quarter.
According to a research note by JS Global Capital, Net Domestic Assets declined by Rs55 billion, as the government retired Rs73 billion funds taken on account of commodity financing, whilst also cutting down on its borrowing from the central bank by Rs5.1 billion. On the contrary, Net Foreign Assets rose by Rs45 billion or 34.5 per cent in the quarter, owing to favorable balance of payment position.
Credit sales down 0.6 per cent
Gross advances saw net outflows of Rs20 billion to reach Rs3.4 trillion – a decline of 0.6 per cent compared with the previous quarter. This was in line with the historical trend, where sales declined by 0.4 per cent and 2.5 per cent in the corresponding period of the two preceding years.
On the other hand, private sector sales gathered pace as Rs40 billion were disbursed towards different industries. This demand is likely to have come from project financing and additional working capital lines – with oil and textile sectors the key demand drivers, added the research note.
Investments rise by 4.8 per cent
Cumulative investments rose 4.8 per cent over the previous quarter, being recorded at Rs2.2 trillion, compared with an average rise of nine per cent in the last eight quarters. These, especially in T-Bills continue to be preferred amid subdued sales and high accretions, along with rising government demand for financing.
Published in The Express Tribune, April 7th, 2011.
Bank deposit fell for the first time in more than two years while the overall balance sheet consolidated in the first quarter of 2011, according to data released by the central bank.
After rising in each of the nine previous quarters, deposits contracted to Rs5 trillion in the period, down 1.5 per cent against the previous quarter.
According to a research note by JS Global Capital, Net Domestic Assets declined by Rs55 billion, as the government retired Rs73 billion funds taken on account of commodity financing, whilst also cutting down on its borrowing from the central bank by Rs5.1 billion. On the contrary, Net Foreign Assets rose by Rs45 billion or 34.5 per cent in the quarter, owing to favorable balance of payment position.
Credit sales down 0.6 per cent
Gross advances saw net outflows of Rs20 billion to reach Rs3.4 trillion – a decline of 0.6 per cent compared with the previous quarter. This was in line with the historical trend, where sales declined by 0.4 per cent and 2.5 per cent in the corresponding period of the two preceding years.
On the other hand, private sector sales gathered pace as Rs40 billion were disbursed towards different industries. This demand is likely to have come from project financing and additional working capital lines – with oil and textile sectors the key demand drivers, added the research note.
Investments rise by 4.8 per cent
Cumulative investments rose 4.8 per cent over the previous quarter, being recorded at Rs2.2 trillion, compared with an average rise of nine per cent in the last eight quarters. These, especially in T-Bills continue to be preferred amid subdued sales and high accretions, along with rising government demand for financing.
Published in The Express Tribune, April 7th, 2011.