KARACHI: Market share of Islamic banking assets and deposits in the banking industry reached 11.4 per cent and 13.2 per cent, respectively, by the end of June 2016, said a report of the State Bank issued on Friday.

Islamic banking industry (IBI) witnessed a growth of 7.4pc during April to June 2016 quarter as its assets reached at Rs1.745 trillion. Deposits also increased by 9.3pc thus touching the Rs1.461tr mark.

The report, Islamic Banking Bulletin for April-June, further said the profit after tax (PAT) by end-June 2016 stood at Rs6 billion as compared to Rs4bn in the same quarter of last year.

Among other profitability indicators, return on equity (ROE) and return on Assets (ROA) were recorded at 11.3pc and 0.7pc, respectively during the quarter under review.

“In line with general trend, operating expense to gross income of IBI remained higher than that of overall banking industry mainly due to expansionary phase of the industry,” said the report.

Asset base of the IBI witnessed a growth of Rs120bn (7.4pc) during April to June 2016 quarter by reaching to Rs1.745tr as compared to Rs1.625tr in the previous quarter.

The share of net financing and investments in total assets (net) of IBI stood at 39.8pc and 36.8pc, respectively at the end of the quarter under review.

Analysis of assets by break-up among IBs and IBBs (Islamic Banking Branches) shows that the assets of both IBs and IBBs increased by Rs57bn (5.7pc) and Rs63bn (10.3pc), respectively during the quartet under review.

However, the share of IBs (60.9pc) remained higher than that of IBBs (39.1pc) in overall assets of the IBI.

Investments (net) of IBI were recorded at Rs642bn by the end of June 2016 as compared to Rs587bn in the previous quarter. Break-up of investments among IBs and IBBs reveals that investments of IBs increased by Rs19bn (6.1pc) during the review quarter as compared to an increase of Rs36bn (13.1pc) in investments of IBBs.

Deposits of IBI depicted a growth of Rs125bn (9.3pc) during the April to June 2016 quarter and touched Rs1.461tr mark as compared to Rs1.336tr in the previous quarter. As a result, the market share of IBI’s deposits in overall banking industry deposits increased from 12.9pc by the end of March 2016 to 13.2pc by the end of June 2016.

Financing and related assets (net) of IBI witnessed a growth of Rs47bn during April to June 2016 quarter and reached at Rs695bn. Financing to Deposits ratio (FDR) of IBI stood at 47.6pc by the end of June 2016. A further analysis shows that the FDR of IBs remained higher (54.7pc) as compared to FDR of IBBs (36.5pc).

Production and transmission of energy and chemical and pharmaceuticals were some other major sectors in terms of their share in financing of IBI. Review of client-wise financing reveals that financing of IBI remained concentrated in corporate sector, having a share of 78.1pc, followed by consumer financing (10.9pc) and commodity financing (5.6pc).

Like previous quarters, financing extended by IBI to Small and Medium Enterprises (SMEs) and agriculture remained low as compared to overall banking industry’s averages indicating limited outreach of IBI to these two sectors.

The network of IBI consists of 22 Islamic Banking Institutions (IBIs); 6 full-fledged Islamic banks (IBs) and 16 conventional banks having standalone Islamic banking branches (IBBs). Branch network of IBI was recorded at 2,146 branches (spread across 98 districts) by the end of June 2016.

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