Bank of Khyber begins transition to Islamic banking

Bank of Khyber (BoK) has formally initiated its transition into a full-fledged Islamic bank, the bank shared the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday.

“The bank has initiated the process for conversion from conventional to Islamic bank,” BoK said.

The development comes as Islamic banking in Pakistan has seen significant growth over the past two decades, driven by strong demand, regulatory support, and Shariah-compliant financial solutions. The industry has expanded rapidly, with both full-fledged Islamic banks and conventional banks offering Islamic banking windows to cater to a growing customer base.

Bank of Khyber’s profit shoots to Rs3.5bn, 665% higher YoY in 2023

As per SBP’s latest data, assets of the Islamic banking industry rose by Rs192 billion from the quarter ending June 2024 and reached Rs9,881 billion by the end of September 2024. Likewise, deposits maintained an upward trajectory and increased by Rs233 billion during the period to reach Rs7,596 billion.

The year-on-year (YoY) growth of assets and deposits of the industry was registered at 17.4% and 23.3%, respectively.

Assets and deposits of the Islamic banking industry in the overall banking industry stood at 19% and 23.2%, respectively showing slight improvement from the previous quarter

Meanwhile, the Bank of Khyber was established under The Bank of Khyber Act, of 1991 and is principally engaged in the business of commercial banking and related services. The Bank acquired the status of a scheduled bank in 1994.

As per BoK’s latest financial results, the bank posted a profit after tax of Rs2.6 billion for the nine months ending September 2024. The profit was higher than the Rs2.5 billion registered in the same period last year (SPLY).