KARACHI: Banks and other financial institutions extended Rs10.1 billion housing loans during the first half of this fiscal year, said a report of the State Bank of Pakistan (SBP) issued on Saturday.

The central bank in the half-yearly housing review reported that 1,775 borrowers were issued fresh loans of Rs10.1bn during the July-Dec 2016-17. However, a total of Rs21.6bn was disbursed in the calendar 2016.

Islamic banks extended Rs4.2bn housing loans followed by private banks Rs3.6bn, House Building Finance Company Limited (HBFCL) Rs1.12bn and public sector banks Rs126.16 million.

The SBP report shows the gross housing loans outstanding of all banks and development finance institutions (DFIs) rose 5.42 per cent to Rs69.26bn on Dec 31, 2016 from Rs65.7bn on June 30, 2016.

“Over the year, housing finance portfolio showed an impressive growth of 13.90 per cent,” said the SBP report. Banking sector-wise gross outstanding loans, for the periods ending December 2015 and December 2016, are shown as Islamic banks reported Rs26.62bn followed by private banks at Rs22.31bn.

Outstanding loans of HBFCL were Rs15.56bn, up by 5.56pc over the last year.

The gross outstanding housing finance of Islamic banking industry (Islamic banks and Islamic banking divisions of conventional banks) stood at Rs31.25bn on Dec 31, 2016. Gross outstanding of Islamic banking industry increased by 10.11pc compared to June 2016.

Islamic banking industry has maintained an increasing trend throughout the year.

“During the half year ended Dec 31, 2016, market share of conventional banking decreased to 55pc and that of Islamic banking increased by 2pc to 45pc,” said the report.

Commercial banks/DFIs (excluding HBFCL) disbursed Rs7.05bn in terms of loans ‘above Rs5 million’ and Rs0.12bn in the category ‘up to Rs1m’ during July-Dec 2016.

During the period under review, 71.95pc loans were extended to the borrowers with primary source income as ‘salary’, 25.36pc with primary source of income declared as ‘business’ and 2.69pc to ‘self employed’ borrowers.

Gross outstanding housing finance for ‘outright purchase’ stood at Rs45.56bn; 65.79 per cent share in gross outstanding. This is followed by the ‘construction’ and ‘renovation’ category where gross outstanding stood at Rs16.41bn and Rs7.28bn respectively.

Active portfolio shows that Islamic banks took a lead in financing for outright purchase with 50.11pc share, followed by private banks having the share of 36.55pc.

HBFCL took lead in financing for ‘construction’ (46.49pc) and ‘renovation’ (57.11pc).

The report reveals the average size of the loans disbursed during the period was Rs6.1m. HBFCL’s average loan size was Rs2.3m, private banks Rs8.5m, Islamic banks’ Rs7.6m and public sector banks’ Rs1.4m.

Published in Dawn, March 5th, 2017