In a recent report on Pakistan, Moody’s Investor Services (Moody’s) reported that raised remittances of worker to Pakistan are credit positive for banks.
The State Bank of Pakistan (SBP) announced on 15th February that monthly worker remittances increased by 24.1 percent to $16.5 billion in the seven months to January 2021.
According to Moody’s, the rise runs counter to our expectations that the pandemic will hold remittances flat, as well as the World Bank’s prediction of a dramatic drop in global remittances.
Increased remittances are credit positive for Pakistani banks, especially United Bank Ltd (B3 stable, b3), which had a leading market share of around 24% of remittances as of 30 September 2020, since they help to support decentralization.
Increased remittances also result in more domestic deposits, providing banks with more secure and fair funding while also increasing their foreign-currency liquidity.
