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, according to Islamic Banking Bulletin (October-December 2018).
Profitability ratios like return on assets and return on equity (before tax) 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 further improvement and was recorded at 62.9 percent, compared to 65.1 percent in the previous quarters.
The State Bank of Pakistan (SBP) released Islamic Banking Bulletin (October-December 2018), according to which, assets of Islamic banking industry increased by 8.1 percent (Rs 200 billion) during the quarter October to December, 2018 and were recorded at Rs 2,658 billion. Similarly, deposits of Islamic banking industry witnessed a quarterly growth of 9.9 percent (Rs 198 billion) and stood at Rs 2,203 billion by end December, 2018.
During 2018, assets and deposits of Islamic banking industry witnessed year-on-year growth of 17 percent and 16.9 percent, respectively. Market share of Islamic banking assets and deposits in the overall banking industry was recorded at 13.5 percent and 15.5 percent, respectively by end December, 2018 (see Table 1). Profit before tax of Islamic banking industry was registered at Rs. 34 billion by end December, 2018 compared to Rs. 23 billion in the same quarter last year.
The network of Islamic banking industry consisted of 22 Islamic banking institutions; 5 full-fledged Islamic banks (IBs) and 17 conventional banks having standalone Islamic banking branches (IBBs) by end December, 2018.
During the period under review, Zarai Taraqiati Bank Limited started its Islamic banking operations. Branch network of Islamic banking industry was recorded at 2,851 (spread across 113 districts) by end December, 2018. During 2018, 270 branches were added to branch network of Islamic banking industry. The number of Islamic banking windows operated by conventional banks having standalone Islamic banking branches stood at 1,288.
Investments (net) of Islamic banking industry reflected a decline of 3.7 percent (Rs. 20 billion) and were recorded at Rs. 515 billion by end December, 2018 compared to Rs. 535 billion in the previous quarter. During the period under review, investments (net) of full-fledged Islamic banks and Islamic banking branches of conventional banks declined by around Rs. 7 billion and Rs. 13 billion, respectively.
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 14.7 percent in the previous quarter. The category wise breakup of deposits shows that all three categories of deposits reflected growth during the period under review. Current (non-remunerative) and fixed deposits witnessed rise of 12.3 percent (Rs. 81 billion) and 8.9 percent (Rs. 38 billion) respectively; while saving deposits increased by 3.1 percent (Rs. 25 billion) during the period under review.