KARACHI: Banking spread continues to increase for the month of March mainly at the cost of depositors as the deposit rates were reduced by the banks.
Banking spread for March rose to 7.66 per cent, which was 57 basis points higher than the corresponding period of last year.
‘The average spread for the first three months of 2009 stood at 7.69 per cent, representing an increase of 62 basis points over the same period of last year,’ said Mohammad Imran, head of research at First Capital Equity.
Higher banking spread has been under serious criticism but the banks have continued with their strategy for higher profiteering at the cost of depositors who are already troubled by high inflation.
Bankers said one of the main reasons for the higher banking spread was the high inflation that made their earning devalued.
Analysts said the lending rates dropped by 20 basis points while the deposit rates dropped by 24 points in March.
It looks that the situation for depositors would not be changed and the rates might not be up for any significant decline in the banking spread.
The first quarterly report of the banks’ performance showed that the industry was gradually heading towards troubled waters and their earnings have started falling sharply. This dismal picture of the industry does not give any hope of relief to the depositors already under crunching impact of very high inflation rate of over 19 per cent.
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