{"id":103085,"date":"2025-08-19T11:49:58","date_gmt":"2025-08-19T06:49:58","guid":{"rendered":"https:\/\/www.zameen.com\/news\/?p=103085"},"modified":"2025-08-19T11:50:02","modified_gmt":"2025-08-19T06:50:02","slug":"fitch-ratings-says-banking-sector-to-gain","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/news\/fitch-ratings-says-banking-sector-to-gain.html","title":{"rendered":"Fitch Ratings says banking sector to gain as economy stabilises"},"content":{"rendered":"\n<p>Islamabad: Pakistan\u2019s banks are set to benefit from stronger business opportunities as operating conditions improve with easing economic pressures, Fitch Ratings said in its latest assessment.<\/p>\n\n\n\n<p>The global ratings agency noted that Pakistan\u2019s economy has begun to stabilise following the USD 7 billion IMF bailout programme secured in September 2024, which restored investor confidence and helped improve the country\u2019s credit profile. In April 2025, Fitch upgraded Pakistan\u2019s Long-Term Issuer Default Rating to \u2018B-\u2019\/Stable from \u2018CCC+\u2019, reflecting fiscal reforms, lower inflation, and easing external vulnerabilities.<\/p>\n\n\n\n<p>According to Fitch, the improved outlook should translate into healthier conditions for the banking sector. \u201cLower rates and a steadier macroeconomic environment should stimulate private credit demand and reduce banks\u2019 dependence on lending to the public sector,\u201d it said, while cautioning that risks remain due to banks\u2019 high exposure to sovereign securities and state-linked entities.<\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/www.zameen.com\/news\/imf-projects-pakistan-gdp-growth.html\" target=\"_blank\" rel=\"noreferrer noopener\">IMF forecasts Pakistan\u2019s GDP growth to hit 3.2%<\/a><\/p>\n\n\n\n<p>Pakistan\u2019s inflation has dropped sharply, easing to 4.1% in July 2025 from a peak of 38% in May 2023, with the average forecast around 5% this year. Meanwhile, the policy rate has been cut by half since May 2024 to 11%, supported by a more stable currency and current account surpluses. These factors, Fitch said, will aid recovery momentum, with GDP growth projected to rise to 3.5% by 2027 from 2.5% in 2024.<\/p>\n\n\n\n<p>The agency highlighted that despite past economic turmoil, Pakistani banks have remained resilient. The sector\u2019s impaired loan ratio improved to 7.1% by March 2025, down from 7.6% at the end of 2023, supported by strong loan growth of 26% amid high inflation. Profitability has also normalised, with return on average equity at 20% in the first quarter of 2025, compared to 27% in 2023, while capital adequacy reached a decade-high of 21%.<\/p>\n\n\n\n<p>Fitch concluded that most large Pakistani banks are \u201cwell-positioned to navigate the transition to a more normalised operating environment of lower interest rates, although structural challenges persist.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Islamabad: Pakistan\u2019s banks are set to benefit from stronger business opportunities as operating conditions improve with easing economic pressures, Fitch Ratings said in its latest assessment. The global ratings agency noted that Pakistan\u2019s economy has begun to stabilise following the USD 7 billion IMF bailout programme secured in September 2024, which restored investor confidence and helped improve the country\u2019s credit profile. In April 2025, Fitch upgraded Pakistan\u2019s Long-Term Issuer Default Rating to \u2018B-\u2019\/Stable from \u2018CCC+\u2019, reflecting fiscal reforms, lower inflation, and easing external vulnerabilities. According to Fitch, the improved outlook should translate into healthier conditions for the banking sector. \u201cLower rates and a steadier macroeconomic environment should stimulate private credit demand and reduce banks\u2019 dependence on lending to the public sector,\u201d it said, while cautioning that risks remain due to banks\u2019 high exposure to sovereign securities and state-linked entities. Read: IMF forecasts Pakistan\u2019s GDP growth to hit 3.2% Pakistan\u2019s inflation has dropped sharply, easing to 4.1% in July 2025 from a peak of 38% in May 2023, with the average forecast around 5% this year. Meanwhile, the policy rate has been cut by half since May 2024 to 11%, supported by a more stable currency and current account surpluses. These&hellip;<\/p>\n","protected":false},"author":18,"featured_media":101326,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15016],"tags":[60635,67387,67386,61695,62426,62150,64120,61427,1684,67388,67385,34475,62969,67391,67389,67390],"persona":[],"class_list":{"0":"post-103085","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-developments","8":"tag-banking-sector","9":"tag-capital-adequacy","10":"tag-credit-demand","11":"tag-financial-stability","12":"tag-fitch-ratings","13":"tag-gdp-growth","14":"tag-imf-bailout","15":"tag-inflation","16":"tag-islamabad-news","17":"tag-loan-growth","18":"tag-pakistan-banks","19":"tag-pakistan-economy","20":"tag-policy-rate","21":"tag-return-on-equity","22":"tag-sovereign-credit-rating","23":"tag-sovereign-securities","24":"cat-15016-id"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Fitch Ratings says banking sector to gain - Zameen News<\/title>\n<meta name=\"description\" content=\"The agency highlighted that despite past economic turmoil, Pakistani banks have remained resilient. 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