KARACHI, Jul 2 (Dawn): The banking industry's profits dropped 40 per cent to Rs 137.8 billion in Pakistan during the nine months to March as yields on government bonds, heavily relied on by banks as they are risk-free, remained low.
Moreover, the direct tax collection grew 10.2pc during the July-March period compared to a growth of 15.4pc a year earlier. The slowdown can be traced to a reduction in the corporate tax rate amid slower pace of increase in corporate profitability.
Banks' interest in government securities, as evident from the bidding pattern in recent auctions, also revived during the quarter to March. However, the offer-to-target ratio was much higher for treasury bills than for Pakistan Investment Bonds (PIBs), according to the State Bank of Pakistan's (SBP) third-quarterly report.
Against a target of Rs 2.5 trillion, commercial banks offered Rs 4.3tr for treasury bill auctions held during the third quarter. Most offers were for three-month and six-month tenors. The government accepted significantly higher amount compared to the target to facilitate the retirement of maturing PIBs in the quarter. [Read More]

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Source: The Financial Express