KARACHI: The private sector’s credit off-take from commercial banks nearly quadrupled year-on-year in the first five months of 2017-18, according to data released by the State Bank of Pakistan (SBP) on Monday.

Its monetary impact from July 1 to Nov 24 was Rs101.1 billion against Rs26.9bn a year ago.

Although the lending by commercial banks and their Islamic branches to the private sector was substantially higher than last year’s, Islamic banks have shown poor performance since the beginning of 2017-18.

The private sector’s borrowing from conventional banks rose to Rs74.2bn so far in this fiscal year against a net retirement of Rs21.1bn a year ago.

Islamic banks recorded a debt retirement of Rs1.7bn in the current fiscal year against the lending of Rs16.8bn last year.

However, Islamic banks insist that they are doing fine. “Meezan Bank and all other Islamic banks are doing well and their lending to the private sector has been increasing,” Meezan Bank CEO Irfan Siddiqui told Dawn.

He attributed the higher debt retirement during the current fiscal year to seasonal lending. He said the overall lending and recovery remain satisfactory for the Islamic banking industry.

Contrary to Islamic banks, Islamic banking branches of conventional banks noted a net lending of Rs28.6bn in July-November against Rs31.2bn a year ago.

According to the SBP’s second quarterly review, the asset base of the banking sector expanded 8.3 per cent in April-June, which is the highest growth recorded in corresponding quarters since 2008.

It showed that gross advances to the private sector surged 6.1pc in the second quarter, a jump of 50pc from 4pc in the corresponding quarter of last year.

The relatively higher growth in advances pushed the advances-to-deposits ratio up to 48.7pc in the second quarter from 47pc in the comparable three-month period of 2016.

Published in Dawn, December 5th, 2017