Bank profits surge 83pc in 2023
KARACHI: Commercial banks posted an impressive 83 per cent earnings growth during 2023, with almost all banks recording their historic profits during the year, according to a research report on Tuesday. Unprecedented interest rates yielded higher profits for banks but overburdened the economy with costly borrowing by the government. “In CY23, the banking sector in the listed space witnessed significant profits (83pc) driven mainly by policy rate hikes of 600bps coupled with volumetric growth in deposits (24pc), supported by 21pc lower provisioning and 16pc higher non-interest income during the year,” said the report of Arif Habib Research. Banking is the only attractive sector which earned profits despite a negative growth rate in FY23. The new fiscal year FY24 did not show much improvement as the estimated 2pc growth rate is still doubtful. However, the banks’ profits would continue to rise since the government is unable to function without borrowing from banks despite record revenue generation.