Bank profits to fall

Earnings of commercial banks are expected to drop by 4-11 per cent for 2022 if the government imposes a new tax on their foreign exchange income. Finance Minister Ishaq Dar said in a recent press conference that the government was planning to ramp up its tax revenues by levying an additional tax on banks, which have made “excessive gains” on the back of a high volatility in the currency market. Topline Securities said in a research note issued on Thursday a 10-30pc tax on banks’ foreign exchange income can fetch the government additional Rs12-36 billion. That’s because the research house expects banks will post collective foreign exchange income of around Rs120bn for 2022. State Bank of Pakistan (SBP) Governor Jameel Ahmed recently told a standing committee of the National Assembly that the central bank was undertaking an investigations into the role that leading banks played in the exchange rate’s manipulation in recent months.