Islamic banking’s assets increased by 2.8pc in Q12018

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SOURCEPakistan Today
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ISLAMABAD: Assets of the Islamic banking industry increased by 2.8 per cent during the quarter from January to March 2018 and were recorded at Rs2,334 billion, compared to Rs2,272 billion in the previous quarter.

According to data released by State Bank of Pakistan (SBP), the financing recorded growth of 6.4 per cent (Rs77 billion) during the period under review whereas market share of Islamic banking industry’s assets in overall banking industry’s assets increased by 1.1 per cent during the period under review and was recorded at 13.5 per cent by end March 2018 compared to 12.4 per cent in the previous quarter.

The share of net financing and investments in total assets (net) of Islamic banking industry stood at 54.9 per cent and 22.7 per cent, respectively by end-March, 2018.

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Bifurcation of assets among full-fledged Islamic banks and Islamic banking branches of conventional banks shows that assets of full-fledged Islamic banks recorded a quarterly growth of 0.5 per cent (Rs. 7 billion) during the review quarter to reach Rs1,359 billion.

On the other hand, assets of Islamic banking branches of conventional banks reflected relatively better quarterly growth of 6.1 per cent (Rs 55 billion) compared to full-fledged Islamic banks and their assets base was recorded at Rs975 billion by end March 31, 2018.

Islamic banking industry grows by 8.6pc

In terms of share in overall assets of Islamic banking industry, full-fledged Islamic banks and Islamic banking branches of conventional banks accounted for 58.2 per cent and 41.8 per cent share, respectively by end March 2018.

Investments (net) of Islamic banking however recorded a decline of 0.9 per cent (Rs5 billion) during the period under review and stood at Rs529 billion by end-March, 2018.

The review of last three quarters shows that investments (net) of Islamic banking industry have not shown any significant change and almost remained at same level.

The network of Islamic banking industry consisted of 21 Islamic banking institutions; 5 full-fledged Islamic banks and 16 conventional banks having standalone Islamic banking branches by end-March, 2018.

Similarly, the branch network of Islamic banking industry stood at 2,589 (spread across 111 districts) by end March, 2018.

The number of Islamic banking windows operated by conventional banks having standalone Islamic banking branches was recorded at 1,283, the data revealed.

The data further revealed that profit before tax of Islamic banking industry was recorded at Rs7 billion by end March, 2018 compared to Rs5 billion in the same quarter last year.

Profitability ratios like return on assets and return on equity (before tax) stood at 1.1 per cent and 18.4 per cent, respectively by end March, 2018.

Operating expense to gross income ratio continued the declining trend; however, this ratio is still higher than that of overall banking industry’s average.

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