KARACHI: The country’s Islamic banking sector has witnessed 48 per cent growth on year-on-year as its combined pre-tax profit has surged to Rs4.8 billion in the first quarter of 2015.
According to the Islamic banking bulletin issued by the State Bank of Pakistan (SBP), the contribution of IBDs to the overall profitability of the Islamic banking industry in January-March increased to 52% from 39% a year ago.
Assets of the Islamic banking industry grew by 28.2% in January-March on an annual basis to Rs1.3 trillion. Similarly, its deposits stood at Rs1.1 trillion at the end of March after recording a growth of 28.7% over the preceding 12 months.
In terms of market share, Islamic banking assets in the overall banking industry remained unchanged on a quarterly basis at 10.4%. Investments and financing, which are the two major components of assets, showed different trends in the January-March period. While investments of the Islamic banking industry grew, financing showed a decline during the quarter.
Net investments of the Islamic banking industry increased to Rs368.2 billion by the end of March, up 3.2% on a quarterly basis. Federal government securities remained the highest contributor to the overall investments (67.3%) in the quarter under review.
Gross financing of the Islamic banking industry declined during the first quarter of 2015, SBP data shows. It stood at Rs417.8 billion at the end of March, down 1% from the end of December. This is in line with the usual trend, as financing declines during the first quarter of every calendar year because of the retirement of financing by a majority of client industries given their nature of business, according to the SBP.
