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Investment by Islamic banking industry rises by 23 percent

Islamic banking

The Islamic Banking Industry (IBI) invested 23 percent more than the deposit growth during Jan-March 2021 (3QFY21), according to report issued by the State Bank of Pakistan (SBP).

According to the SBP data, the investment by the Islamic banking industry went up by Rs 84 billion during the period from July 2020 to March 2021. It was Rs 1,345 billion by the end of March 2021.  

The increase in investment was mainly due to investment in the government’s domestic Ijara Sukuk. The government of Pakistan had issued two domestic Ijarah Sukuk of Rs 75 billion during this period. The deposits enhanced by Rs 68 billion during the nine months of the fiscal year 2020-21 and stood at Rs 3457 billion by the end of March 2021.

Read more: Banks see 43 percent jump in calendar year 2020 profits despite Covid

The market share of the Islamic banking Industry’s deposits in overall banking deposits grew by 18.7% during the nine months of the previous fiscal year as compared to 18.3% during the fiscal year 2019-20. Saving deposits and current deposits increased by Rs 44 billion and Rs 40 billion respectively during the period, under consideration whereas the fixed deposits decreased by 37 billion by March 2021.  

Profit-before-tax of the Islamic Banking Industry was found at Rs 21.3 billion during the period from July 2020 to March 2021 as compared to Rs 20.6 billion during the same in the previous fiscal year. Operating expense to the gross income of the Islamic banking industry was found to be at 51.5% by the end of the nine-month of the previous fiscal year as compared to 47.5% on the same month during the fiscal year 2019-20.  

Islamic banking assets grow 30.6 percent to Rs 4.38 trillion in Jan-Mar

The increase in the assets of IBI was enhanced by Rs.120 billion during the three quarters of the previous fiscal year and reached Rs 4389 billion as compared to Rs 4269 billion during the same period in the financial year 2019-20. This increase in the assets was mainly due to the increase in investment.  

The Islamic Banking Industry invested 23% more than the deposit growth during the period under consideration. The market share of IBI’s assets in the overall banking industry assets was found to be 17% by the end of the ninth month of the last fiscal year. The share of net financing and investment in overall assets of the Islamic Banking Industry came to be at 44.5% and 30.6% respectively.

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