Pakistan Economy_SBP increases CRR to 6%. (AKD Daily, Nov 15,2021)
AKD Daily
Pakistan Economy: SBP increases CRR to 6%
- In a move that will clip the lending capacity of the banks and contain aggregate money supply growth, SBP raises statutory Cash Reserve Ratio by 100bps to 6%.
- The most recent regulatory measure maybe seen as a continuation of earlier move where SBP increased the requirements for auto-financing in order to curb consumer demand and bring the growth to more sustainable levels.
- With more money tied up to meet the new statutory requirements, the lending capacities of the bank will be reigned in slightly, however, this will have a minimal impact on banks where we anticipate the earnings to trim by 1% - 2%.
- With more interest rate hikes on cards, we expect the profitability of the banks to remain on solid footings. NIMs are expected to pick up as the assets get repriced at higher rates while the robust asset quality and coverage ratio will protect an downside in earnings.
- Having underperformed the broader index by 5.2%CYTD, the banks are likely going to outperform in the coming months as interest rate reversal cycles gains intensity. We highlight MCB, UBL and MEBL as potential outperformers.
AKD Research
Meezan Bank Limited is an Islamic commercial bank. The Bank is engaged in corporate, commercial, consumer, investment and retail banking activities. It offers a range of Islamic banking products and services through a retail banking network of over 550 branches in approximately 140 cities to its corporate, commercial and small and medium-sized enterprise (SME) customers based on their financial requirements. It provides personal banking, business banking, premium banking and branchless banking. The Bank also offers Meezan Rupee Current Account, Karobari Munafa Account, Meezan Rupee Savings Account, Meezan Business Plus Account, Meezan Bachat Account, Meezan Kids Club Account, Meezan Teens Club Account, Meezan Asaan Current Account, Meezan Kafalah, Certificates of Islamic Investment, Meezan Amdan Certificate and Dollar Mudarabah Certificate. It has assets in agriculture, food, forestry and fishing; cement, and others. The Bank operates only in Pakistan.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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