July-September: Islamic banking industry’s assets grow 1.3%

Published: January 10, 2015
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Capital: Rs354b is the amount of net investments of the Islamic banking industry by the end of September. STOCK IMAGES

Capital: Rs354b is the amount of net investments of the Islamic banking industry by the end of September. STOCK IMAGES

KARACHI: Assets of the Islamic banking industry increased 1.3% in July-September 2014 to reach Rs1,102 billion, according to a State Bank of Pakistan publication released on Friday. 

Assets of the Islamic banking stood at Rs1,089 billion in the preceding quarter. Deposits of the Islamic banking industry clocked up at Rs934 billion at the end of the July-September quarter, it added.

The market share of Islamic banking assets and deposits in the overall banking industry increased from 9.8% and 10.6% at the end of June to 9.9% and 10.7%, respectively, by the end of September.

The profitability of the Islamic banking industry increased Rs3.4 billion in the quarter under review to reach Rs9.4 billion, up from profits Rs5.6 billion earned by Islamic banking industry by the end of September 2013.

Among asset quality indicators, non-performing financing (NPF) of Islamic banking industry increased during the third quarter of 2014, resulting in an increase in provisions against financing during the review quarter. Among earning and profitability indicators, both return on assets and return on equity increased during the quarter under review.

Net Investments of the Islamic banking industry declined to Rs354 billion by the end of September from Rs358 billion at the end of June, reflecting a quarterly decline of 1%. The decline in investments was mainly due to non-issuance of any new Ijara Sukuk, which has generally been the key investment option for the Islamic banking industry, during the quarter.

Gross financing of the Islamic banking industry grew to Rs348.5 billion in September, from Rs339 billion by the end of June, reflecting quarterly growth of 2.8%. In line with the general trend, financings of Islamic banking industry remained concentrated in the corporate sector with a share of nearly 75%, followed by consumer financing (13%) and commodity financing (6.2%).

Islamic banking industry continued to expand during the third quarter of 2014, as 88 additional branches were added to the branch network.

Published in The Express Tribune, January 10th, 2015.

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