Net NPLs surge 11 percent to Rs105.47bln in Jan-March

KARACHI: Net non-performing loans (NPLs) of banks and development financial institutions (DFIs) surged 11 percent to Rs105.47 billion in the quarter ended on March, the central bank said on Tuesday. 

The State Bank of Pakistan (SBP) said the net NPLs of all banks and DFIs amounted to Rs94.66 billion in the previous quarter.

Experts said the bank loans increased due to the decades-low interest rates. They said rise in lending increased the loan infections. 

The SBP’s monetary aggregate data showed that credit to private sector surged to Rs294.48 billion between July 1, 2015 and May 13, 2016 as compared to Rs168.4 billion in the corresponding period of the last fiscal year, up 75 percent.

The gross NPLs increased to Rs633.437 billion until March-end as compared to Rs620.445 billion as on December 31, 2015, depicting 2.1 percent increase. 

Besides, net NPLs to net loan ratio also widened to 2.18 percent in the three months as against 1.94 percent earlier.

The net NPLs of banks increased 17.5 percent to Rs92.63 percent in Jan-March as against Rs78.84 billion in the previous quarter. 

Public sector banks were more affected by the loan infections as their net NPLs rose to Rs48.69 billion from Rs39.81 billion. Local private banks measured Rs43.95 billion in net NPLs until March 2016.

The SBP data showed that cash recovery against NPLs by the banking sector fell 32 percent to Rs16.21 billion for the quarter ended March. The cash recovery in the previous quarter stood at Rs23.62 billion.