Pakistan Bank Boom Reaping Record Profits

Bank profits have risen sharply over the last three years. Fiscal 2004 saw record profits. Profits were up a massive 105 percent in nine months to September, 2005. The boost in the banks’ market capitalisation was 200 per cent. Banks, both foreign and domestic, are outperforming all financial sectors, as Pakistani economy moves on a steady growth track. The country’s principal bourse — Karachi Stock Exchange (KSE) index of 100 key shares rose high this week, and crossed to a record plus 10,913.78 over the weekend. Bank profits were 87 per cent in 2003, compared to 2002. These were 23 per cent in 2004, compared to 2003 which, itself was a high profit year. A reduced rise in profit in 2004 was because banks did not enjoy extraordinarily high capital gains on their bond portfolio which was the case in 2003.