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Islamic banking deposits expand market share to 17 percent

Discussion in 'Pakistan Economy' started by Morpheus, Jun 30, 2020.

  1. Morpheus

    Morpheus FULL MEMBER

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    Islamic banking deposits expand market share to 17 percent
    KARACHI: Deposits of Islamic banking industry experienced a quarterly growth of Rs 40 billion and market share of...

    Rizwan Bhatti June 30, 2020


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    KARACHI: Deposits of Islamic banking industry experienced a quarterly growth of Rs 40 billion and market share of Islamic banking deposits in the overall banking industry was recorded 17 percent by end March, 2020.

    According to Islamic Banking Bulletin for Jan-March 2020, issued by State Bank of Pakistan, deposits of Islamic banking industry were increased to Rs. 2.692 trillion by end March, 2020 compared to Rs 2.652 trillion in Dec 2019. With current surge, market share of Islamic banking deposits in overall banking industry deposits reached to 16.9 percent by end March, 2020 compared to 16.6 percent in the previous quarter.

    Assets of Islamic banking industry increased by Rs 76 billion during the quarter Jan-March, 2020 and surged to Rs 3.360 trillion, compared to Rs 3.284 trillion in the previous quarter. Resultantly, the market share of Islamic banking industry assets in overall banking industry's assets, increased from 14.9 percent for the year ended Dec 2019 to 15.2 percent by end March 2020.

    Islamic banking industry posted profit before tax of Rs 21 billion by end March 2020. Profitability ratios like return on assets (ROA) and return on equity (ROE) before tax were recorded at 2.5 percent and 36.7 percent, respectively during the first quarter of this year. During the period under review, operating expense to gross income ratio was recorded at 47.4 percent, improving further from 51.5 percent recorded in the previous quarter. This ratio remained lower than that of overall banking industry ratio.

    Asset quality indicators of Islamic banking industry including non-performing finances (NPFs) to financing (gross) and net NPFs to net financing increased and were recorded at 5 percent and 2.6 percent, respectively by end March 2020 owing to increase in NPFs.

    The ratios of capital to total assets and capital minus net non-performing assets to total assets of Islamic banking industry were recorded at 6.8 percent and 5.4 percent, respectively by end March, 2020. Both the ratios remained lower than those of overall banking industry averages.

    The category wise breakup of Islamic Banking Industry deposits shows that all categories of deposits reflected growth during the period under review, except current (non-remunerative) deposits which experienced a decline. Fixed deposits increased by 1.8 percent to Rs 11 billion while current and saving deposits increased by 31.8 percent to Rs 4 billion, 6.4 percent to Rs 61 billion, respectively. Current (non-remunerative) deposits experienced a decline of 2.6 percent to Rs 22 billion by end March 2020.

    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) with 3,250 branches spread across 120 districts by end March 2020. However, despite some improvements, major share of branches is still concentrated in Punjab and Sindh. The number of Islamic banking windows, operated by conventional banks having IBBs stood at 1,375.

    https://www.brecorder.com/news/40001848/islamic-banking-deposits-expand-market-share-to-17-percent

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