Islamic Banking Profits rise 25% over the year: SBP

Islamic Banks have made Rs.15 billion in profits up to June 30, 2018, a 25 percent rise in profits over the year compared to Rs.12 billion in profits for the same period last year, according to State Bank’s Islamic Banking Bulletin June 2018 issued on Monday.

Profitability ratios like return on assets and return on equity (before tax) were recorded at 1.3 percent and 20.9 percent, respectively by end June, 2018.

Deposits

With respect to deposits, out of the total deposits in the banking industry in Pakistan, the share of Islamic banks stood at 14.8 percent by June end, from 14.6 percent in the previous quarter.

On a quarterly basis, total deposits of the Islamic banking industry grew by 6.1 percent, or by Rs.117 billion, reaching Rs.2,033 billion by June 30, 2018, compared to the previous quarter when deposits were recorded at Rs.1,916 billion. Compared to last year, total deposits have witnessed an increase of 18.2 percent of the year.

Deposits pertaining to current accounts that pay no remuneration grew by 6.5 percent, or Rs.43 billion over the quarter, while deposits in saving accounts also grew by 6.4 percent, or by Rs.49 billion. The slowest grow was for the fixed deposits category, which increased by 3.8 percent or Rs.14 billion in that quarter.

On a year on year basis, the non-remunerative current account deposits witnessed the largest growth as deposits pertaining to these accounts grew by 20.7 percent over the year, followed by an 18.9 percent growth in Saving Deposits and a 14.5 percent growth in Fixed Deposits.

Asset Base

Asset base of Islamic banking industry registered a quarterly growth of 6.3 percent (Rs.148 billion) during the quarter April to June, 2018 and were recorded at Rs.2,482 billion, compared to Rs.2,334 billion in the previous quarter.

This growth in assets was contributed by net financing and investments that recorded a quarterly growth of 3.1 percent (Rs.39 billion) and 4.8 percent (Rs.26 billion), respectively during the period under review.

Market share of Islamic banking industry’s assets in overall banking industry’s assets was recorded at 12.9 percent by end June, 2018. The share of net financing and investments in total assets (net) of Islamic banking industry stood at 53.3 percent and 22.4 percent, respectively by end June, 2018

Bifurcation of assets among full-fledged Islamic banks and Islamic banking branches of conventional banks reveals that assets of full-fledged Islamic banks witnessed a quarterly growth of 6.9 percent (Rs.93 billion) during the period under review to reach Rs.1,452 billion. Assets of Islamic banking branches of conventional banks grew by 5.6 percent (Rs.55 billion) and their assets base reached to Rs.1,030 billion by end June, 2018. The share of full-fledged Islamic banks and Islamic banking branches of conventional banks in overall assets of Islamic banking industry stood at 58.5 percent and 41.5 percent, respectively by end June, 2018.

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