The banking sector, which has been facing tough regulations in a declining interest rate environment, has found a new avenue to bolster its profitability in the form of hefty investment in Pakistan Investment Bonds.
Against the revised target of Rs100bn, the government managed to raise Rs425bn. Three-year PIBs witnessed the greatest participation, mopping up Rs245bn at a cut-off yield of 12.09pc. The five-year and 10-year PIBs also managed to outperform their targets, raising Rs80bn and Rs99bn, respectively, with cut-off yields of 12.55pc and 12.90pc.
At the end of the third quarter of this fiscal, total investment in PIBs and Treasury bills stood at Rs2.4 trillion and Rs2.8 trillion, respectively. Of this, the banking sector held Rs1.5 trillion and Rs2.3 trillion respectively.
