Fitch: Pakistan banks healthier, active

Fitch Ratings said in a new special report that the Pakistani banking system has, over the last decade, gradually evolved from a weak state-owned system to a slightly healthier and active private sector-driven system.

The private sector controls nearly 80% of the system assets, the agency said, as opposed to the early 1990s when 90% of the system assets were controlled by the government. The system grew at a compounded annual growth rate of 17.8% between 2001 and 2006, supported by strong growth in the domestic economy with the underlying liability growth driven by both an influx of private and institutional capital, as well as inter-governmental receipts, Fitch said.

The resolution of the current volatile political environment will likely impact the economy, the agency said, and could be a key driver that determines the fortunes of the Pakistan banking system.

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