KARACHI: Outstanding deposits in the banking system amounted to Rs9.6 trillion at the end of May, up 5.2% from the beginning of 2015-16.

According to the latest data released by the State Bank of Pakistan (SBP), almost half of the increase of Rs478.4 billion in total deposits during the last 11 months originated from growth in the personal deposits category.

Personal deposits rose 5.4% during the first 11 months of 2015-16 to clock up at Rs4.8 trillion at the end of May. Personal deposits accounted for 50.6% of total deposits at the end of the eleventh month of 2015-16. In contrast, their share in total deposits stood at 50.5% at the end of June 2015, SBP data shows.

Within the personal deposits category, deposits maintained by salaried people grew 8.6% while those of self-employed people rose 1.2% in the 11-month period, according to SBP data.

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Personal deposits under the category of “other personal: housewives, students etc” far exceeded the amount held by salaried people. With the increase of 9.7%, deposits maintained by “housewives and students etc” amounted to Rs1.5 trillion at the end of May.

As for deposits held by the private sector, SBP data for the first 11 months of 2015-16 shows they amounted to Rs2.4 trillion, down 3% from the outstanding position at the end of June 2015. Within private-sector businesses, deposits maintained by the manufacturing sector went down 1.2% in the first 11 months of the fiscal year to Rs658.2 billion at the end of May.

Deposits held by private trusts and non-profit organisations amounted to Rs221.1 billion after going up by 16.2% over the preceding 11 months, SBP data shows.

The pace of increase in total deposits has slowed down in 2015-16, as the rise in total deposits clocked up at 8.7% in the first 11 months of 2014-15. Analysts believe slower growth in total deposits is partly because of the withholding tax on banking transactions of more than Rs50,000 in a day by a non-filer of income tax returns.

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Anecdotal evidence emerged prior to the beginning of 2015-16 that a large number of traders withdrew their deposits before the implementation of the withholding tax on banking transactions in July last year.

SBP data also reveals that outstanding deposits dropped with the beginning of the current fiscal year. Uncharacteristically, deposits did not regain their pre-July 2015 level until November.

According to the latest quarterly compendium on the banking system, deposits have grown at a cumulative annualised growth rate of 13.8% between 2009 and 2015.

While deposits have grown steadily, the rate of increase in loans and advances has been relatively slower. This is reflected in the advances to deposits ratio (ADR), which shows loans extended by banks as a percentage of deposits. The industry-wide ADR decreased from 67.7% at the end of 2009 to 46.4% in 2015.

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