Islamic banks of Pakistan have left behind their conventional banking counterparts by mobilising deposits at a higher pace in April-June.
The State Bank of Pakistan (SBP) issued in the Islamic Banking Bulletin for April-June that deposits of the Islamic banking industry increased by Rs156 billion or 10% quarter-on-quarter to Rs1,720 billion.
There was a 6.5% increase in the deposits of overall banking industry. The share of Islamic banks’ deposits in overall banking industry’s deposits increased to 13.7% at the end of June from 13.2% a quarter ago.
Islamic banks asset base grew with this help. The SBP report said the share of Islamic banks’ assets in overall banking assets was 11.6% at the end of June. The asset base of Islamic banks increased by Rs150 billion or 8% during the quarter to stand at Rs2,035 billion.
However, the report revealed that growth in many sectors of Islamic banking registered by Sharia-compliant branches of conventional banks was more aggressive than that posted by fully fledged Islamic banks.
The share of fully fledged Islamic banks and Islamic banking branches of conventional banks in overall assets of the Sharia-compliant banking industry was 59% and 41%, respectively, at the end of June.
Islamic banks improved their investments, thanks to sukuk worth Rs71 billion that the government issued in June.
Net investments of the Islamic banking industry increased Rs48 billion or 9.9% in April-June to Rs537 billion at the end of June.
Net investments of fully fledged Islamic banks declined to Rs226 billion at the end of June from Rs232 billion a quarter ago.
In contrast, investments of Islamic banking branches of conventional banks increased by Rs54 billion to Rs310 billion against Rs256 billion in the previous quarter.
During the same period, assets of Islamic banking branches of conventional banks witnessed quarterly growth of 14.2% and were recorded at Rs825 billion against Rs723 billion in the previous quarter.
Net financing and related assets of the Islamic banking industry grew 5.9% to Rs977 billion over the same period.
The share of financing for small and medium enterprises (SMEs) in overall financing of the Islamic banking industry increased to 3.2% from 2.9% in the previous quarter.
The share of agricultural financing in overall financing by the Islamic banking industry stood at 0.4% at the end of June.
