Pakistan’s Islamic Banking Industry (IBI) continues to attract customers from its target market, helped by its stable indicators of financial soundness. This was confirmed as assets from IBI crossed the benchmark of Rs. 2 trillion by the end of half year of 2017.
According to the State Bank of Pakistan (SBP), IBI assets surged to Rs. 2.035 trillion compared to Rs. 1.885 trillion in the previous quarter, with the addition of Rs. 150 billion during April to June 2017.
IBI assets base crossed the mark of Rs. 1 trillion for the first time in the history of the country in March 2014. Hence, the industry showed a tremendous growth to achieve the next one trillion rupees of its assets in three years and one quarter.
The assets of full-fledged Islamic banks stand at Rs. 1.210 trillion and the assets of Islamic banking branches of conventional banks reached Rs. 825 billion.
The share of full-fledged Islamic banks and Islamic banking branches of conventional banks in overall assets of Islamic banking industry was 59 percent and 41 percent respectively by end of June 2017.
IBI Deposits
The deposits of Islamic banking industry increased to reach Rs. 1.720 trillion by end of June 2017.
The category wise breakup of deposits shows that current (non-remunerative) and saving deposits increased by Rs. 74 billion and Rs. 67 billion, respectively; while, fixed deposits declined by Rs. 14 billion during the review quarter.
Hence, the market share of Islamic banking assets and deposits in overall banking industry was recorded at 11.6 percent and 13.7 percent, respectively by end June 2017.
IBI Investments
The net investments of Islamic banking industry increased by 9.9 percent (Rs. 48 billion) during the period of April and June and were recorded at Rs. 537 billion by end June, 2017. This increase in investments can be linked with the issuance of Ijara Sukuk of Rs. 71 billion by the Government of Pakistan in June, 2017.
Breakup of investments (net) among full-fledged Islamic banks and Islamic banking branches of conventional banks shows that investments (net) of full-fledged Islamic banks stood at Rs. 226 billion by end June, 2017. In contrast, investments in Islamic banking branches of conventional banks increased by Rs. 54 billion. Cumulatively, this figure stood at Rs. 310 billion by end June, 2017.
Financing and Related Assets
Financing and related assets (net) of Islamic banking industry witnessed a growth of 5.9 percent (Rs. 54 billion) during the review quarter and were recorded at Rs. 977 billion by the end of June 2017.
Bifurcation of financing and related assets (net) among full-fledged Islamic banks and Islamic banking branches of conventional banks shows that financing and related assets (net) of full-fledged Islamic banks stood at Rs. 640 billion by end June, 2017.
Financing and related assets (net) of Islamic banking branches of conventional banks reached at Rs. 337 billion by end June, 2017. In terms of mode wise financing, Musharaka remained the leading mode of financing followed by Murabaha.
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