These include (i) a rise in earning assets of commercial banks to 85% in September 2006 which is significantly above the prereform period and a rise in advances to total assets from 49.1% (CY2000) to 55.1% (Sep 2006), (ii) a decline in the total and operating expense to income with latter being half the pre-reform period, (iii) a rise in the SME, consumer finance and agriculture sector lending which constitutes over one third of total outstanding advances and typically is priced above the average lending rates and those prevailing for larger corporate clients, (iv) a high share of non interest bearing or low yield deposits, while share of fixed term (above 6 months maturity) deposits declined and (v) a substantial growth in service charges which are emerging as a new source of revenue as electronic banking is taking hold.
A SBP study has highlighted that privatization has had distinct impact on profitability of the banking 3 sector, though its impact on efficiency is relatively weak. This is largely as older and larger banks need more lead time to enhance their capacities and develop their internal control systems to improve efficiency.