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SBP posts Rs3.4tr profits in FY24

By Erum Zaidi
September 22, 2024
An undated image of a State Bank of Pakistan building in this undated image. — SBP Website/File
An undated image of a State Bank of Pakistan building in this undated image. — SBP Website/File

KARACHI: The State Bank of Pakistan (SBP) reported a significant profit of Rs3.4 trillion in the fiscal year 2024 ended on June 30, up from Rs1.1 trillion in the previous year, according to its financial results.

The central bank submitted its annual financial statement and auditors’ report for FY24 to the government last week, as per information posted on the SBP’s website.

During an analyst briefing session after the monetary policy meeting on September 12, the SBP’s governor Jameel Ahmad stated that the SBP will soon transfer dividends of over Rs2.5 trillion to the government from its FY24 profits.

Mohammed Sohail, CEO at Topline Securities, referred to the audited annual account of the central bank, saying that a record Rs3.4 trillion was earned in 2023-24 compared with Rs1.1 trillion in the previous year. He mentioned that the bumper profits of the SBP are helping the government.

“Higher interest rates and stable Pak Rupee helped SBP to post this huge profit,” Sohail said.

“And as 80 per cent of these profits are given to the government, the overall government liquidity has improved,” he added.

“Resultantly we are seeing a rally in local currency bonds recently.”

Analysts have noted that the amount raised via the latest Pakistan Investment Bonds auction was lower than the original target and the government had rejected all bids in the Treasury bills auction held on Wednesday. This indicates a decline in the borrowing needs of the government.

Analysts anticipate a significant interest rate cut in the upcoming SBP monetary policy meeting scheduled for November 4.

The SBP cut its benchmark interest rate for a third consecutive meeting last week in an effort to boost economic growth amid easing inflation pressures.

The SBP lowered the policy rate by 200 basis points to 17.5 percent, the lowest level since January 2023.

The rate reduction follows August’s single-digit inflation, which was caused by a high base effect, declining food prices and a comfortable external position.