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With 17 percent growth in assets, the market share of Islamic banking industry in the overall banking industry has surged to 13.5 percent by the end of December 2018 (CY18).

According to Islamic Banking Bulletin, issued by the State Bank of Pakistan (SBP), the profit before tax of Islamic banking industry has registered a healthy growth of 48 percent during the last calendar year. Profit before tax of Islamic banking industry was surged to Rs34 billion in CY18 compared to Rs23 billion in CY17, depicting an increase of Rs11 billion.

During CY18, assets and deposits of Islamic banking industry witnessed year-on-year healthy growth of 17 percent and 16.9 percent, respectively. Assets of Islamic banking industry increased by Rs386 billion to record at Rs2.658 trillion by the end of CY18. Deposits of Islamic banking industry stood at Rs2.203 trillion by end December, 2018, up by Rs318 billion.

With current growth, market share of Islamic banking assets and deposits in the overall banking industry was recorded at 13.5 percent and 15.5 percent, respectively by end December, 2018 up from 12.4 percent and 14.5 percent by end December 2017.

The network of Islamic banking industry consisted of 22 Islamic banking institutions; 5 full-fledged Islamic banks (IBs) and 17 conventional banks having standalone Islamic banking branches (IBBs) by end December, 2018.

During the period under review, Zarai Taraqiati Bank Limited started its Islamic banking operations and the branch network of Islamic banking industry was recorded at 2,851 (spread across 113 districts) by end December, 2018. During CY18, 270 branches were added to branch network of Islamic banking industry.

Asset quality indicators of Islamic banking industry including non-performing finances (NPFs) to financing (gross) and net NPFs to net financing were registered at 2.4 percent and 0.4 percent, respectively by end December, 2018 down from 3 percent and 0.5 percent in December 2017. Both these ratios showed further improvement, mainly due to significant rise in financing portfolio of Islamic banking industry during the period under review.

Capital to total assets and capital minus net non-performing assets to total assets ratios of Islamic banking industry were recorded at 6.4 percent and 6 percent, respectively by end December, 2018.

Copyright Business Recorder, 2019


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