The Islamic banking industry witnessed handsome growth in profitability, as its pre-tax profit increased to Rs. 73.4 billion by the mid of 2022 as compared to Rs. 42.6 billion reported during the same period of the previous year, showing a growth of 72.3 percent year-on-year.
The growth in profitability is attributed to the increasing inclination of customers towards Islamic banking whereas the Islamic banks received tax benefits from the government due to the higher advance/financing-to-deposit ratio viz-a-viz margins of banks parked in the government papers.
A majority of the full-fledged Islamic banks received the advantage which ultimately benefited the bottom lines of these institutions.
The investments of the Islamic banks and Islamic banking division also grew in Sukuk issued by the federal government which improved their margins significantly.
During the period under review, 103 branches were added to the branch network of Islamic Banking Institutions (IBIs). Correspondingly, the branch network of IBI crossed the four-thousand mark and was recorded at 4,086 (spread across 129 districts of the country).
The profit share of the Islamic banking industry has increased to 24.4 percent in the overall banking industry by the mid of 2022 compared to 19.5 percent in the last calendar year.
According to the data available, the Islamic banking industry made a before-tax profit of Rs. 73.4 billion to the overall pre-tax profit of the industry which stood at Rs. 300 billion by the mid of 2022.
The market share of Islamic banking assets and deposits in the overall banking industry stood at 19.5 percent and 20.5 percent, respectively by the end of June 2022.
