Karachi, Pakistan (BBN)- Substantial improvement has been observed in banking sector during July-September quarter of 2014 as the operational profit reached historically high level of Rs 176 billion as of end September 2014 showing 44 per cent increase over the end September 2013.
Similarly, the return on assets (ROA) and return on equity (ROE) inched up to 1.4 per cent and 15.9 per cent respectively up from 1.1 per cent and 12.3 per cent a year ago, the State Bank of Pakistan (SBP) said.
The quarterly banking sector statistics for the quarter ended September 2014, released by the SBP indicated Capital Adequacy Ratio (CAR) of the banking system improved to 15.5 per cent in September 2014 compared to 15.1 per cent a quarter earlier largely on the back of healthy profits.
The CAR at its existing level is well above the minimum ratio of 10 per cent set by the SBP, despite implementation of strict Basel-III capital standard, the Daily Times, a local newspaper reported.
Encouragingly, the stress test results also show that capital base of the system is strong enough to withstand unusual shocks due to credit, market and liquidity risks.
The indicators of asset quality of the banking sector, with marginal changes, also reflect stability.
Non-Performing Loans (NPLs) to Loan ratio net of provisions at 3.2 per cent in September 2014 is far below its peak of 6.4 per cent in September 2011.
BBN/SSR/AD-21Nov14-11:08 am (BST)
