KARACHI: Assets of Islamic Banking Industry (IBI) witnessed an all-time high quarterly increase of Rs 836 billion during the quarter April to June, 2022. With current increase, market share of IBI assets in overall banking assets surged to 19.5 percent by end-June 2022.

According to the State Bank of Pakistan (SBP) IBI assets have seen a strong growing trend over the years. This rising path also sustained during the second quarter of this calendar year.

Assets of IBI reflected double-digit growth of 14.1 percent. In terms of amount, the asset base of IBI enlarged by Rs 836 billion and crossed the six-trillion mark to reach Rs 6,781 billion by end June, 2022. This is the biggest ever increase in the assets’ size of IBI in a single quarter.

The growth in assets emanated from net investments and financing, which exhibited a quarterly rise of Rs 470 billion and Rs 269 billion, respectively. On the funding side, deposits of IBI also posted a largest quarterly leap of Rs 610 billion during the period under review and were registered at Rs 4.856 trillion by end June, 2022.

On a year-on-year (YoY) basis, assets and deposits of IBI were up by 41.4 percent or Rs 1.984 trillion and 27.1 percent or Rs 1.034 trillion), respectively by end June, 2022. Market share of Islamic banking assets and deposits in the overall banking industry stood at 19.5 percent and 20.5 percent, respectively by end June, 2022. The market share of financing of IBI in advances of the overall banking industry increased to 27.2 percent by end-June 2022 as against 24 percent as of June 2021.

Profit before tax of IBI was registered at Rs 73.4 billion by end-Juneljlju 2022. Earnings ratios like return on assets (ROA) and return on equity (ROE) (before tax) were recorded at 2.4 percent and 42.6 percent, respectively by end June, 2022. Operating expense to gross income ratio of IBI improved during the period under review and was registered at 46.4 percent by end-June 2022. Investments (net) of IBI reflected a sizable growth of Rs 470 billion (21.4 percent) during the period under review and touched Rs 2,672 billion by end-June 2022. The main reason behind this increase was deployment of funds by IBI in the Government of Pakistan (GoP) domestic Ijarah Sukuk (GIS).

Copyright Business Recorder, 2022