Pakistani banks announce record net interest income
Banks operating in Pakistan have announced a record net interest income as credit volume to private business continues to expand.
Banking industry analysts foresee this trend in net interest income (NII) to continue. But, banks’ overall investment in the stock market will be restrained resulting in reduced yields. This is because the central bank has restricted their investment in stocks to 20 per cent of their capital investment.
Most banks performed quite well. However, only three of them saw their NII come down in the first half of 2004, compared to the same period of 2003. The overall banking industry NII was up 4.9 per cent during the first half of calendar 2004 -January-June, 2004. The real picture is much better, because aside from three banks, NII before provisioning rose by 32.8 per cent. The three banks that spoiled the overall average were: UK-based Standard Chartered Bank (SCB), the oldest foreign bank operating in Pakistan. It saw its NII decline by Rs.232 million. The NII of the state-owned National Bank of Pakistan (NBP), the country’s biggest bank, was down Rs.112 million and that of Muslim Commercial Bank (MCB), one of the biggest private banks, was down Rs. 835 million. NII increase after provisioning works out to 13.2 per cent…