{
  "id": 27180,
  "title": "Banks likely to stay dependent on govt borrowing for profits",
  "url": "https://urgent.news/2026/08/01/banks-likely-to-stay-dependent-on-govt-borrowing-for-profits",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-01T02:25:46.000Z",
  "source": {
    "name": "Dawn Business",
    "slug": "dawn-business",
    "url": "https://www.dawn.com/news/2019810/banks-likely-to-stay-dependent-on-govt-borrowing-for-profits"
  },
  "original_language": "en",
  "account": "Banking sector likely to rely on government borrowing for profits in current fiscal year, despite limited private lending opportunities, according to financial industry sources. The Federal Government's borrowing from banks reached Rs5.9 trillion in FY26, up from Rs5.4 trillion in FY25. Private sector credit is expected to be even lower in the upcoming fiscal year as policymakers focus on external fronts and use banks' funds for domestic spending, creating a fiscal gap. The advance-to-deposit ratio, which measures the private sector's growth, has fallen to 35.2% in June 2026, among the lowest in the region. This decline reflects weak private-sector growth and contributes to rising domestic debt, which consumes about Rs8 trillion in interest payments. Despite the government's repeated requests to banks to increase lending to the private sector, especially small and medium enterprises, the private sector received only around Rs1.4 trillion in FY26. Money market expert S.S. Iqbal noted that the investment-to-deposit ratio was 104.2% in June 2026, indicating continued reliance on government securities. Banks are eager to invest their funds in government papers, with the ratio even higher at 106% last year. The ongoing regional war adds to growing uncertainties, making it unlikely for domestic investors to take risks and borrow from banks at high costs.",
  "summary": "• Limited private sector lending options may persist • Federal govt borrowing from banks rises to Rs5.9tr in FY26 • Private sector receives around Rs1.4tr KARACHI: The country’s banking sector is likely to remain dependent on government borrowing for profits in the current fiscal year as limited private-sector lending opportunities continue to make banks one of the most lucrative sectors for the…",
  "key_points": [
    "Government borrowing from banks reached Rs5.9 trillion in FY26.",
    "Private sector credit expected to be lower in upcoming fiscal year.",
    "Advance-to-deposit ratio fell to 35.2% in June 2026."
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}