Islamic Banking Industry’s Assets Surge to Rs. 6.8 Trillion

Pakistan’s Islamic banking industry is consistently growing, beating the odds of the economic slowdown, as it witnessed an all-time high quarterly increase of Rs. 836 billion during the second quarter of the year, crossing the six-trillion mark to reach Rs. 6.781 trillion by the end June 2022.

According to the State Bank of Pakistan (SBP), the growth in assets emanated from net investments and financing, which exhibited a quarterly rise of Rs. 470 billion and Rs. 269 billion, respectively.

On the funding side, the deposits of the Islamic banking industry also posted the largest quarterly leap of Rs. 610 billion during the period under review and were registered at Rs. 4.856 trillion by the end of June 2022.

The assets and deposits of the Islamic banking industry surged by 41.4 percent (Rs. 1.984 trillion) and 27.1 percent (Rs. 1.034 trillion), respectively, compared to the last year mid-2022, according to the SBP.

The investments in the Islamic banking industry reflected a sizable growth of Rs. 470 billion (21.4 percent) during the period under review and touched Rs. 2.672 trillion by end of June 2022. The main reason behind this increase was the deployment of funds by the Islamic banking sector in the government of Pakistan (GoP) domestic Ijarah Sukuk (GIS).

The financing and related assets (net) of the Islamic banking industry recorded a healthy increase of Rs. 269 billion (10 percent) and were recorded at Rs. 2,961 billion by mid of 2022.

Market Share of Islamic Banking

The market share of Islamic banking assets and deposits in the overall banking industry stood at 19.5 percent and 20.5 percent, respectively. Besides, the market share of financing Islamic banking in advances of the overall banking industry increased to 27.2 percent by end of June 2022.

Network of Branches

The composition of the Islamic banking sector remained the same with 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, 103 branches were added to the branch network of IBIs. The branch network of IBIs crossed the 4,000 mark and was recorded at 4,086 (spread across 129 districts of the country by end of June 2022.

The number of Islamic banking windows (dedicated counters at conventional branches) operated by IBBs also increased by 45 percent during the period under review and was recorded at 1,463.