Banking Sector Consolidation A High Probability Scenario

BMI View: The Pakistani banking sector is clearly hunkering down, following a few years of very fast growth. Macroeconomic headwinds, deteriorating asset quality, and historically high interest rates are likely to continue to hold back credit growth over the coming months. While the risks to solvency appear somewhat muted, we expect a drive towards consolidation to eventually materialise, given the fragmented nature of the industry.

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