State of Islamic Banking in Pakistan.

Byline: SHABBIR KAZMI

It is true that Islamic banking in Pakistan has attained a significant share of the overall banking industry. Though the data used in this article may look a little outdated, it presents a fairly reasonable picture.

Assets of the Islamic Banking Industry (IBI) grew by PKR 121 billion during July-September 2022 quarter and were recorded at PKR 6,902 billion by the end of September 2022.

Deposits of IBI also increased by PKR 165 billion during the period under review and crossed the five trillion mark to reach PKR 5,021 billion by the end of September 2022.

The year-on-year (YoY) growth of assets and deposits of IBI was recorded at 41.3% and 31.4%, respectively by the end of September 2022. The market share of assets and deposits of IBI in the overall banking industry rose to 20% and 21%, respectively by the end of September 2022.

During the period under review, net investments and financing of IBI observed growth of PKR 149 billion and PKR 24 billion, respectively. As a result, the market share of financing of IBI in advances of the overall banking industry reached 27%, while the share of investment reached 15.7% by the end of September 2022.

The network of IBI is comprised of 22 Islamic Banking Institutions (IBIs), including 5 full-fledged Islamic Banks (IBs) and 17 Conventional Banks having Islamic Banking Branches (IBBs). During the period under review, 105 branches were added to the branch network of IBI. With this addition, the branch network of IBI reached 4,191 (spread across 129 districts of the country) by the end of September 2022.

The Islamic banking windows (dedicated counters at conventional branches) operated by IBBs stood at 1,467 by the end of September 2022.

During the period under review, the assets of IBI increased by PKR 121 billion and stood at PKR 6,902 billion as compared to PKR 6,781 billion in the previous quarter.

The market share of IBI's assets in overall banking assets also increased to 20% by the end of September 2022 as compared to 19.5% in the previous quarter. The expansion in the asset was mainly backed by investments (net) that exhibited a quarterly upsurge of PKR 149 billion.

Likewise, the financing (net) of IBI experienced an escalation of PKR 24 billion during the period under review. The share of investments (net) and financing (net) in the total assets of IBI was recorded at 40.9% and 43.3%, respectively by the end of September 2022.

Assets of IBs observed a surge of PKR 23...