The fiscal Year 2019-2020 marks as the historical year for State Bank of Pakistan (SBP) as the bank reported its highest ever profit in its history. Meanwhile, the bank suffered from losses in the preceding year. The bank earned a net profit of Rs1,163.433 Billion in FY20 as compared to the loss in the preceding year which stood at Rs1.043 billion.
The report penned the following statements, “The stability in the exchange rate allowed the SBP to return to profitability after incurring a loss in the preceding year,”
The high-interest rate in the first three quarters of the year made the possibility of significant income for the bank from the interest-sensitive assets. Particularly, the open market operations of the bank accrue income along with the lending to the government.
The total expenses registered 17pc increase during the year due to increased volume of banknote printing and general and administrative expenses.State Bank of Pakistan
The major source of income for the bank during the fiscal year was due to, lending to the government, as per the report stated.
Although, there was no further lending to the GoP after June 30, 2019, however, the income on lending to the GoP increased by 84pc due to increase in the average volume of lending as well as an increase in the average interest rate during the year.State Bank of Pakistan