KARACHI: The market Share of Islamic Banking Industry (IBI) in the banking sector continued to post healthy growth and crossed 20 percent by the end of September 2022.

According to Islamic Banking Bulletin issued by the State Bank of Pakistan (SBP) Wednesday, the year on year (YoY) growth of assets and deposits of IBI was recorded at 41.3 percent and 31.4 percent, respectively by the end of September, 2022.

Assets of IBI stood at Rs 6.902 trillion by the end of September 2022 compared to Rs 4.884 trillion in September 2021 depicting an increase of Rs 2.018 trillion. Quarter-on-Quarter (QoQ), assets rose by 2 percent or Rs 121 billion to Rs 6.902 trillion in September 2022 up from Rs 6.781 trillion in June 2022.

The expansion in assets was mainly backed by investments (net) that exhibited a quarterly upsurge of Rs 149 billion. Market share of IBI’s assets in overall banking assets also increased to 20 percent by end September, 2022 compared to 19.5 percent in the previous quarter.

Deposits of IBI also increased by Rs 165 billion during the quarter under review and crossed the five trillion mark to reach Rs 5,021 billion by end September, 2022 as against Rs 4.856 trillion in June 2022. The YoY growth of deposits of IBI also recorded 31 percent or Rs 1.2 trillion. The market share of deposits of IBI in the overall banking industry rose to 21 percent, respectively by end September 2022.

The share of investments (net) and financing (net) in the total assets of IBI was recorded at 40.9 percent and 43.3 percent, respectively by end September, 2022.

During the period under review, assets of Islamic Banks (IBs) observed a surge of Rs 23 billion and touched Rs 3.760 trillion by end September, 2022. Besides, assets of Islamic Banking Branches (IBBs) increased by Rs 98 billion and were recorded at Rs 3.142 trillion by end September, 2022. The share of IBs and IBBs in overall assets of IBI was registered at 54.5 percent and 45.5 percent, respectively by end September, 2022.

The network of IBI comprises 22 Islamic Banking Institutions (IBIs), including 5 full-fledged Islamic Banks (IBs) and 17 Conventional Banks having Islamic Banking Branches (IBBs). During the period under review, 105 branches were added to the branch network of IBI. With this addition, the branch network of IBI reached to 4,191 (spread across 129 districts of the country) by end September, 2022.

During the quarter under review, liquidity ratios, ie, liquid assets to total assets and liquid assets to total deposits stood at 40.8 percent and 56.1 percent, respectively by end September, 2022. The financing to deposit ratio of IBI was recorded at 59.4 percent by end September, 2022.

Profit before tax of IBI was recorded at Rs 124.5 billion by end September, 2022. While, profitability ratios like return on assets (ROA) and return on equity (RoE) [before tax] stood at 2.6 percent and 46.4 percent, respectively by the end of September, 2022. Operating expense to gross income ratio of IBI reduced by 2.4 percent and stood at 44 percent by end September, 2022.

Copyright Business Recorder, 2022

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