KARACHI: A growing client base and improving asset quality helped Islamic banks post profits before tax of 12 billion rupees ($119.1 million) in the third quarter of last year, almost double the year-earlier amount, State Bank of Pakistan data shows.
The SBP governor on Thursday urged the country´s Islamic banks to develop ways to reward their customers in line with a surge in the sector´s profitability, or face regulatory action. Islamic finance is experiencing a revival in Pakistan, aided by an ambitious five-year plan that regulators hope will double the industry´s share of the banking sector to 20 percent by 2020.
The average financing-to-deposit spread – the difference between what banks charge for financing and what they pay their depositors – for all lenders, Islamic and conventional, remains high and should be “reasonably rationalised”, SBP chief Ashraf Wathra said in a speech to a gathering of industry executives on Monday.
“Banks were advised to come up with their own solutions or the SBP will apply sharia-compliant measures to address the issue,” said Wathra. He did not specify a satisfactory level, but singled out Islamic banks as the ones needing to reward customers in line with a rise in profits.
