The assets of Islamic banking industry has increased by 17.25 percent to its new peak level of Rs 159 billion during the second quarter of the 2007 calendar year. The review of the balance sheet of the Islamic banking institutions (IBIs) indicated increasing trend in the Islamic banking system.
The assets of IBIs grew by Rs 23.4 billion during the second quarter (April-June) of 2007 calendar year, which reached Rs 159 billion at the end of June, surpassing Rs 135.6 billion during the quarter ended in March.
The State Bank of Pakistan (SBP) has issued quarterly performance of review of the Islamic banking system, reviewing the overall IBIs assets. According to the SBP review, the financing remained the largest asset of IBIs with Rs 78.8 billion or 49.5 percent.
It said while the cash, bank balances and placement stood at Rs 53.2 billion, investments rose to Rs 11.5 billion or 7.2 percent during the second quarter of the current calendar year. On the balance sheet side, it reveals that the deposits remained predominant source of financing of IBIs, which were around 68 percent or Rs 93.1 billion of the total sources of funds.
In addition, the borrowing formed around Rs 14.3 billion, or nine percent of the total sources of funds, while Rs 25.2 billion or 15.8 percent has been contributed by the shareholders in the form of capital and other funds.
The June 2007 quarter witnesses an entry of one more Islamic bank, raising the number of Islamic banks six, while the number of branches, operated by the Islamic banks, has increased from 99 in March 2007 to 109 in June 2007.
The capital of the Islamic banking institutions grew by 20.6 percent to Rs 25.2 billion during the quarter under review. Moreover, the capital adequacy position remained around the level of 21.8 percent of risk weighted assets, thus providing comfort to the institutions and affording them the opportunity to expand their operations.
The break-up of deposits reflects that fixed deposits declined from 38.4 percent in March 2007 to 37 percent in the second quarter. While savings deposits and current account - non-remunerative - increased from 26.6 percent and 20.1 percent in March 2007 quarter to 29 percent and 22 percent respectively in June 2007. Similarly, deposits from financial institutions too declined from 13.9 percent in March 2007 to 11 percent in June 2007.