http://www.nation.com.pk/daily/may-2006/5/index12.php


Commercial banks extend Rs 354b credit

BY JAVED MAHMOOD


LAHORE - Domestic commercial banks have provided a hefty credit of Rs 354 billion to the private sector in the current financial year, it was learnt on Thursday.

The commercial banks lending is higher than the annual credit plan of Rs 330 billion, projected by the State Bank of Pakistan for the private sector in 2005-06.

According to latest monetary assets profile of State Bank, the commercial banks credit to private sector from July 2005 to April 15, 2006, is slightly lower by Rs seven billion when compared to the corresponding period of last fiscal.

In July 2004 to April 16, 2006, the commercial banks have extended Rs 361 billion credit to the private sector.

By mid-April 2006 the commercial banks total loans portfolio to private sector has expanded to Rs 1.955 trillion, from Rs 1.601 trillion in June 2005.

Surprisingly, the specialised banks lending to this sector has been negative by Rs 14.02 billion, which showed the specialised financial institutions were focusing on recovery of loans.

Senior bankers are of the view that in 2005-06 the banks total lending to private sector would remain well over Rs 400 billion. They said that in 2004-05 the banks have provided Rs 428 billion credit to the corporate concerns as against Rs 330 billion in 2003-04.

The way the private sector is obtaining credit from the domestic banks, it appears that total lending in 2005-06 could hit Rs 440 to 450 billion mark, they said.

The financial experts have claimed that the ongoing robust industrial growth, impressive increase in exports and unprecedented surge in imports were leading to massive off-take of credit from the banks.

They said that the banks have enormous surplus liquidity which they were injecting into the fast-expanding private sector in Pakistan.

Meanwhile, the net domestic assets of the banking system have also increased by Rs 279.31 billion as against Rs 251 billion in the corresponding period of last fiscal and projection of Rs 365 billion for 2005-06.
The net foreign assets of the banks too showed an increase of Rs 21.52 billion, which is above the projection of Rs 15 billion for the current financial year.