The Islamic banking industry (IBI) has far outpaced the conventional banking industry, with a handsome pre-tax profit growth of 87.5 percent from January to September 2022 compared to the same period last year.
According to the State Bank of Pakistan’s (SBP) Islamic Banking Bulletin (IBB), the IBI recorded a pre-tax profit of Rs. 124.5 billion in nine months of 2022, compared to a profit of Rs. 66.4 billion in the same period of 2021, representing an increase of 87.5 percent year on year.
The IBI is made up of 22 Islamic Banking Institutions (IBIs), of which 5 are full-fledged Islamic Banks (IBs) and 17 are conventional banks with Islamic Banking Branches (IBBs).
By the end of the first three quarters of 2022, conventional banking’s pre-tax profit had increased by 38% year on year.
The conventional banking system’s pre-tax profit was Rs. 362.5 billion in the said period, compared to Rs. 261.4 billion in the previous period.
Overall, Pakistan’s banking industry, including conventional and Islamic banking systems, increased pre-tax profit by 48.5 percent during the period under review.
From January to September 2022, the banking system’s pre-tax profit was Rs. 487 billion, up from Rs. 327.8 billion in the same period the previous year.
Deposits and Assets
The IBI’s assets are expected to reach Rs. 6.902 trillion by the end of September 2022. According to SBP, IBI deposits have surpassed the five trillion rupee mark and will reach Rs. 5,021 billion by the end of September 2022.
By the end of September 2022, the year-on-year (YoY) growth of IBI’s assets and deposits was 41.3 percent and 31.4 percent, respectively.
Investment and financing
IBI’s financing and related assets (net) increased to Rs. 2.985 trillion at the end of September this year.
By the end of September 2022, the market share of IBI financing in advances of the overall banking industry had reached 27 percent, while the share of investment had reached 15.7 percent.
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