Dubai Islamic Bank Launches Pakistani Remittance Service
News: Dubai Islamic Bank has launched a new remittance service as it looks to capitalise on the increase of diaspora funds sent to the country, according to Finextra. The bank is partnering TPS to launch its Remittance Processing Solution, which it reports allows customers to send funds and have them processed through to current accounts. The move comes as the World Bank claims remittance volumes have surged from US$1bn in 2001 to a projected US$14bn in 2013.
BMI View: Profitability in Pakistan's commercial banking sector has been hampered over the past few years as the net interest rate spread plunged in tandem with the central bank's aggressive cutting cycle. Going forward, however, the outlook for s preads appears relatively positive following the recent reversal in the direction of monetary policy. That said, we caution that the central bank's new directives on minimum deposit rates and the economy's subdued near-term growth prospects in general risk limiting any rise in profitability from a potential widening of spreads.