The State Bank of Pakistan's profit rose by 44 percent to Rs 260 billion at end of fiscal year 2011-12 mainly due to higher interest income. Out of total profit earned during FY12 the State Bank also transferred Rs 200 billion to the federal government.
According to the consolidated profit and loss accounts, the State Bank's profit, which stood on the downward side for last two years, is now moving up. It witnessed a massive increase of Rs 80 billion to Rs 260.8 billion in FY12. In FY11, the SBP's profit stood at Rs 181 billion, down by 3.1 percent from Rs 187 billion profit of FY10.
The audited consolidated financial statement is of the State Bank of Pakistan (the Bank) and its subsidiaries, SBP Banking Services Corporation and National Institute of Banking and Finance (Guarantee) Limited for the year 2011-12. Analysts said the interest on domestic debt is the main source of income for the State Bank and the continued higher borrowing by the federal government has led to rise in the central bank's revenue in FY12.
Interest is the main component of the SBP's income and higher profitability means the government is getting massive financing from the State Bank to meet its fiscal deficit. Accordingly, the government is also paying huge interest on this financing, resulting in higher profit for the SBP, they added. According to accounts the State Bank's interest income rose by 9.5 percent to Rs 236.27 billion in FY12 compared to Rs 215.74 billion in FY11. During the period under review, interest payments by SBP fell to Rs 11.33 billion, down by 15 percent, from Rs 13.39 billion. Commission income of SBP stood at about the same level of Rs 1.95 billion during last fiscal year.
Exchange gain income is another segment, which has posted a pronominal surge during the last fiscal year. With an increase of 2130 percent or Rs 40.9 billion, Exchange gain income has reached Rs 42.82 billion in FY12 from Rs 1.92 billion in FY11. Dividend income increased from Rs 11.9 billion to Rs 15.69 billion during the period. Operating losses converted into profit in FY12 and the SBP operating income stood at Rs 9 billion as compared to Rs 11.59 billion losses in FY11. As against total income of Rs 294.326 billion operating expenses stood at Rs 33.526 billion in FY12, resulting in a consolidated profit of Rs 260.8 billion. To meet federal government's higher borrowing demand, the SBP printed new notes on large scale and accordingly, charges on account of bank notes printing surged by 24 percent or Rs 1.11 to Rs 5.68 billion in FY12 against Rs 4.57 billion in FY11.
Total assets of the State Bank reached Rs 3.785 trillion by end of June 30, 2012 as compared to Rs 3.618 trillion as on June 30 2011, depicting an increase of Rs 167 billion in a year. Assets include Rs 313 billion of gold reserves, Rs 1.8 billion of local currency coins, Rs 1.038 trillion of foreign currency reserves, Rs 91.334 billion of Special Drawing Rights of International Monetary Funds (IMF), Rs 1.827 trillion of investment, Rs 340 billion of loans, advances, bill of exchange and commercial papers and Rs 23.45 billion of property and equipment.
The SBP's total liabilities stood at Rs 3.273 trillion at end of FY12, up by Rs 127 billion, from Rs 3.146 trillion in FY11. During the period under review, net assets of the SBP also rose to Rs 511 billion from Rs 472 billion. Liabilities include Rs 1.776 trillion of bank notes in circulation, Rs 396 billion of deposits of banks and financial institutions, Rs 656 billion payable to IMF and Rs 153 billion of other deposits.
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