Pakistani banks are facing a slow economic recovery. The economic growth rate will be 1.5% this financial year.
Moody’s Research has released a report on Pakistani banks and said that the scenario of abundant funding and liquidity banks is stabilizing, challenging, better operating environment will affect the assets and profits of banks.
Moody’s Research report on Pakistani banks downplayed expectations of 1.5 per cent economic growth in the current financial year.
According to Moody’s Research, economic activity in the country is likely to remain lower than before the Coronavirus pandemic, but there are also estimates that banks’ assets and profits will be affected due to better operating and challenging environment.
Moody’s Research report further stated that the state of government debt is better due to the effects of reforms and policies, and the credit profile of banks is similar to that of the government due to large investments in government debt. The external operations of banks will be affected by conditional government payments to the export sector and companies, the volume of non-performing loans will increase in the total loans of banks.
According to the report, the delay in payments and government measures have partially eliminated the effects of Corona and reduced concerns. The deposit base of banks will remain stable with increasing funding and abundant liquidity. Despite the financial challenges, government support is likely to continue in the face of the crisis.