The Islamic banking industry (IBI) has left behind the conventional banking industry by wide margins, showing a handsome pre-tax profit growth of 87.5 percent in the period of January to September 2022 as compared to the same period of the last year.
According to the Islamic Banking Bulletin (IBB) released by the State Bank of Pakistan (SBP), the IBI recorded a pre-tax profit of Rs. 124.5 billion in nine months of 2022 as compared to a profit of Rs. 66.4 billion recorded in the corresponding period of 2021, showing an increase of 87.5 percent year-on-year.
The IBI comprises 22 Islamic Banking Institutions (IBIs), consisting of 5 full-fledged Islamic Banks (IBs) and 17 conventional banks having Islamic Banking Branches (IBBs).
On the other hand, the pre-tax profit of conventional banking recorded 38 percent year-on-year growth by the end of three quarters of 2022. The pre-tax profit of the conventional banking system stood at Rs. 362.5 billion in the said period as compared to Rs. 261.4 billion reported in a similar period.
Overall, Pakistan’s banking industry including conventional and Islamic banking systems recorded 48.5 percent pre-tax profit growth in the period under review. The pre-tax profit of the banking system stood at Rs. 487 billion from January to September 2022 as compared to Rs. 327.8 billion in a similar period of the last year.
Assets and Deposits
Assets of the IBI grew to Rs. 6.902 trillion by end of September 2022. Deposits of IBI also increased to have crossed the five trillion mark to reach Rs. 5,021 billion by end of September 2022, according to SBP.
The year-on-year (YoY) growth of assets and deposits of IBI was recorded at 41.3 percent and 31.4 percent, respectively by end of September 2022. The market share of assets and deposits of IBI in the overall banking industry rose to 20 percent and 21 percent, respectively by end of September 2022.
Financing and Investment
The financing and related assets (net) of IBI rose to Rs. 2.985 trillion by September-end of this year.
The market shares of financing of IBI in advances of the overall banking industry reached 27 percent while the share of investment reached 15.7 percent by end of September 2022.
Investments (net) of IBI moved up to reach Rs. 2.821 trillion by September-end. This increase was mainly due to investments made by IBI in the Government of Pakistan (GoP) domestic Ijarah Sukuk (GIS). The government issued six GISs amounting to Rs. 120 billion during the period under review.
