Financing to private sector jumps to 44% of deposits

Bank financing to businesses in the private sector surged nine percentage points in one month to 44% of deposits by October 25, 2024, as the government approached the Supreme Court to vacate a stay order granted by the Islamabad High Court (IHC) against a 15% additional tax on financial institutions in case they fail to meet the financing target of 50% on December 31, 2024. Citing the State Bank of Pakistan's (SBP) weekly data, research houses reported on Wednesday that the advance-to-deposit ratio (ADR) had been at 39% at the end of September 2024. Topline Research reported that banks' advances to the private sector increased 11% to Rs13.4 trillion as of October 25, 2024. JS Global reported that banks' total deposits declined 3% to Rs30.5 trillion in October compared to September. The drop in deposits automatically improved the ADR by some percentage points.