EUR 4.64 For Business Accounts Only

Intermarket Pulse: Pakistan Banks: Loan growth crosses 8yr high

• According to SBP's latest data, credit to private sector businesses is up 16%YoY as of Apr’17, which is the highest since Dec’08. Long term financing continues to rise by 20%YoY; meanwhile, Trade and Working Capital financing are recovering quickly.

• Major contributing sectors to loan growth include Food (up 28%YoY), Construction (up 27%YoY), Trade (up 21%YoY), and Textile (up 12%YoY). Consumer financing is up by almost 20%YoY – a level which is unmatched since CY06. Other than robust auto financing (up 33%YoY), mortgage financing is at a new high since Mar’08 (up 24%YoY).

• Loan-to-GDP currently stands at c. 19%, much lower than 29% during the last macro bull run. We mark banks with both the willingness and ability to lend as preferred plays in the fresh credit cycle. Preferred names include HBL and UBL.