KARACHI: Market share of Islamic banking assets and deposits in the overall banking industry during the July-September quarter was recorded at 13.8 per cent and 16.1pc respectively, report released by the State Bank of Pakistan showed on Friday.

In absolute terms, the industry’s assets during the period increased by around Rs3 billion to Rs2.995 trillion.

According to the report, the industry’s profit before tax clocked in at Rs46bn whereas profitability ratios like return on assets (ROA) and return on equity (ROE) before tax were recorded at 2.1pc and 33.2pc respectively.

Moreover, during the quarter under review, operating expense to gross income ratio was recorded at 52.5pc compared to 52.6pc in the same quarter last year. The bulletin, however, did not release the profit after tax figures for the period.

The share of financing and investments (net) in total assets of Islamic banking industry stood at 51.6pc and 19.9pc respectively. Investments (net) of Islamic banking industry were recorded at Rs595bn compared to Rs606bn in the previous quarter whereas investments (net) of Islamic banks declined by around Rs13bn while that of Islamic banking branches increased by Rs2bn during the period under review.

The report identifies the lack of sharia-compliant investment avenues as one of the major reasons for decline in investments of the Islamic banking industry.

Sector-wise, production and transmission of energy remained the leading sector for financing with a share of 18.3pc in overall financing undertaken by the industry, followed by textile at 11.9pc and individuals 11.4pc.

During the quarter, the industry’s asset quality indicators including non-performing finances (NPFs) to financing (gross) and net NPFs to net financing increased slightly to 3.1pc and 0.9pc respectively.

However, these ratios were still lower than those of the overall banking industry averages.

Published in Dawn, December 14th, 2019