Lahore: Large players of Pakistani Banking industry are focusing on investing in less risky Government securities; hoping better return on these securities because of higher interest rate. The earnings growth has reached to 18% mainly due to these government securities as discount rate is constantly rising. Large banks like MCB, HBL, ABL and UBL are playing safe by investing in these government securities instead of providing loan facilities to commercial clients.

The large banks excluding National Bank of Pakistan contribute about 70% of deposit base in banking industry. The banks are classified large or small on the basis of their client deposit base and also on branch network basis. These large banks have low return large customer deposits; whereas small and medium sized banks’ deposit base is largely comprised of institutional deposits.

According to the banking experts these banks make large profits due to high spread rates on both deposits and advances. Pakistani banking industry is passing thru’ a very crucial phase, small and medium size banks are trying to survive thru’ mergers and amalgamations; whereas large banking organizations are also investing in Government securities. These banks are also trying to attract general customers by offering them higher interest rates for increasing their deposit base.

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