The market share of Islamic banking assets and deposits in the overall banking industry of Pakistan increased to 12.4% and 14.5%, respectively, by December 31, 2017, said a report from the State Bank of Pakistan.
“Assets of Islamic banking industry grew by 9.1% (Rs189bn) during the last quarter of 2017 and were recorded at Rs2.272tn, compared to Rs2.083tn in the previous quarter,” according to the October-December 2017 issue of SBP’s Islamic Banking Bulletin last Thursday.
The growth in assets was mainly contributed by financing that depicted a quarterly growth of 16.6%. Furthermore, net investments recorded a rise of 1.8% during the period under review.
The share of net financing and investments in total assets (net) stood at 53.1% and 23.5%, respectively by the end of December, 2017.
The share of full-fledged Islamic banks and Islamic banking branches of conventional banks in the overall assets of Islamic banking was recorded at 59.5% and 40.5%, respectively, said the report.
Investments in the Islamic banking recorded an increase of 1.8% (Rs9bn) to Rs534bn by end December, 2017 compared to Rs525bn in the previous quarter, said the bulletin.
Despite a decline of Rs2bn funding by Islamic banking branches of conventional banks, the size of investment (Rs303bn) was still higher than the investment of full-fledged Islamic banks’ sum of Rs231bn at the end of CY17.
Financing and related assets (net) of the industry posted a double-digit growth at 16.6% (Rs172bn) during the reviewed quarter and were recorded at Rs1207bn compared to Rs1035bn in the previous quarter.
According to the report, financing of Islamic banking branches of conventional banks increased by 23.1% versus 13.1% noted by Islamic banks in the period under consideration.
In line with the overall banking industry’s trend, major portion of financing of Islamic banking was extended to production and transmission of energy and textile sectors, making up 16.4% and 13%, respectively of the total share by the end of 2017, continued the report.
“Review of client-wise financing depicts its concentration in the corporate sector; accounting for 70.6% share by end December, 2017,” the bulletin added.—Agencies