Banking Spread increase to 5 years high level

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Banking Spread increase to 5 years high level

Pakistan Banking Spread 2019

State Bank of Pakistan (SBP) released the latest data on Banking Sector Lending and Deposit Rates where an increase in headline banking spreads was witnessed. Banking spreads increased to a five-year high level to 6.17% in September 2019, increasing by 1.34% YoY.

The monthly increase shows lending rates have started reflecting the full impact of the Interest Rate hike which was already incorporated in previous months Deposit Rates.

Fresh spreads increased to 5.77% in September 2019, up by 2.13% YoY. The increase in spreads is expected to bode well for Net Interest Margins of the Commercial Banks.

The lending rates of Banks may further increase in the upcoming month due to avg one quarter lagged impact of an interest rate hike

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