April 9, 2019 (MLN): In line with a report issued by the State Bank of Pakistan on Monday, the profits of the Islamic banking industry have increased by 48 percent during the quarter Oct-Dec 2018.

Profit before tax of Islamic banking industry was recorded at Rs. 34 billion by end December, 2018 compared to Rs. 23 billion in the same quarter last year. Moreover, profitability ratios like return on assets and return on equity were recorded at 1.4 percent and 22.3 percent, respectively by end December 2018.

During the period under review, operating expense to gross income ratio witnessed improvement and was recorded at 62.9 percent, compared to 65.1 percent in the previous quarter.

The assets of Islamic banking industry registered a quarterly growth of 8.1 percent during the quarter and were recorded at Rs. 2,658 billion, compared to Rs. 2,458 billion in the previous quarter. This growth in assets was mainly contributed by financing that recorded quarterly growth of 10.7 percent (Rs. 146 billion).

On the other hand, investments of Islamic banking industry declined by 3.7 percent (Rs. 20 billion) during the period under review.

Market share of Islamic banking industry’s assets in overall banking industry’s assets was recorded at 13.5 percent by end December 2018, compared to 13.6 percent in the previous quarter.

Deposits of Islamic banking industry depicted a quarterly growth of 9.9 percent (Rs. 198 billion) during the period under review to reach at Rs. 2,203 billion, compared to Rs. 2,005 billion in the previous quarter.

As a result of this growth, market share of Islamic banking industry’s deposits in overall banking industry’s deposits increased to 15.5 percent by end December 2018, compared to 14.7percent in the previous quarter.

Breakup of deposits among full-fledged Islamic banks and Islamic banking branches of conventional banks showed that the deposits of former grew by 7.9 percent (Rs. 98 billion) while the latter were registered at Rs. 1,340 billion by end December 2018.

The share of full-fledged Islamic banks and Islamic banking branches of conventional banks in overall deposits of Islamic banking industry stood at 61 percent and 39 percent, respectively by end December 2018.

Islamic financing kept its focus on two major sector of textile and production and transmission of energy. Textile got 13 percent of overall financing while energy got 17.7 percent.

Review of client-wise financing reveals that corporate sector accounted for 74.3 percent share in overall financing of Islamic banking industry, followed by commodity financing with a share of 10.5 percent. The share of small and medium enterprises and agriculture financing in overall financing of Islamic banking industry was recorded at 3.7 percent and 0.3 percent respectively.

Financing and related assets (net) of Islamic banking industry continued their growing trend and reflected a quarterly growth of 10.7 percent (Rs. 146 billion) to reach Rs. 1511 billion by end December 2018 compared to Rs. 1,365 billion in the previous quarter.

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