ISLAMABAD: Overall net investments of Pakistan’s banking sector surged by 1.8% during the third quarter (Q3) of calendar year 2017 against a decline of 2.5% in the same period last year.

Investment in government securities have remained the prime driver behind investments growth, officials data revealed.

Following the recent trend, banks have continued to invest in short-term Market Treasury Bills (MTBs) and have divested from Pakistan Investment Bonds (PIBs) and Sukuks (Rs11.7 billion) during the thirds quarter of the year, according to Quarterly Performance Review of the Banking Sector issued by the State Bank of Pakistan.

Consequently, the share of MTBs (in total net investments) has increased to 52 per cent in the third quarter of the year compared to 42 per cent in the same period last year while the share of PIBs in total investments has declined to 35.3 per cent, the data revealed.

Meanwhile th Asian Development Bank (ADB) has approved $480 million in three loans to improve various economic sectors of the country’s biggest province Punjab. The Manila-based lender and the government signed two loans totalling $380 million for projects to help improve the country’s urban and transport sectors, an announcement said on Tuesday.

Xiaohong Yang, ADB’s country director for Pakistan, and Arif Ahmed Khan, secretary of the Economic Affairs Division signed the loan agreements.

The ADB’s Punjab Intermediate Cities Project will provide $200 million to help enhance the quality of life of residents of Sahiwal and Sialkot cities in Punjab through various urban planning reforms.

The Central Asia Regional Economic Cooperation Corridor (CAREC) Development Investment Programme Project 1 will provide $180 million to improve road traffic efficiency along the CAREC Corridor in Pakistan, particularly in the key road sections in Indus Highway from DG Khan to Jamshoro, and the spin-off sections of N55 north of DG Khan.

“The agreements signed today demonstrate ADB’s continued partnership with the Government of Pakistan to improve living standards through quality investments in infrastructure,” Yang said in a statement.

“Investments of the key national highway infrastructure and improved road safety will lead to the systematic transport sector development and job creation, while our investments in Punjab will help deliver inclusive and sustainable urban development.”

Meanwhile, the Bank approved a $100 million in loan to improve and strengthen the development and delivery of public-private partnership (PPP) projects in Punjab.

“The loan from ADB will be used to finance a viability gap fund window, which will enhance the commercial viability of projects and help attract private sector participation in PPPs,” another statement said.

The government of the United Kingdom, through the Department for International Development (DFID), is also cofinancing the capacity building project through a $19.6 million grant and four million dollars technical assistance, both of which will be administered by ADB.

DFID’s grant will also be used to finance a dedicated project development facility, which will support the engagement of transaction advisors.

Internews