Bad loans surge by Rs70bn in 2023

The non-performing loans (NPLs) of the banking sector increased by 7.6 per cent, or Rs70 billion, during 2023, according to data released by the State Bank of Pakistan (SBP) on Tuesday. The rise in defaults, influenced by high interest rates and sluggish economic growth, reflects ongoing financial struggles within almost all segments of the economy. Throughout 2023, political instability and economic uncertainties stymied growth across all sectors. The data, covering December 2022 to December 2023, identified the textile industry as the largest defaulter, contributing significantly to the total NPLs, which escalated from Rs924.04bn in 2022 to Rs994.82bn by the end of 2023. This increase marks a 7.6 per cent rise in bad loans, highlighting a troubling year for the economy.