KARACHI: Islamic banks beat their conventional banking counterparts by mobilising deposits at a higher pace in April-June.

The State Bank of Pakistan (SBP) issued on Monday the Islamic Banking Bulletin for April-June, which reveals that deposits of the Islamic banking industry increased by Rs156 billion or 10 per cent quarter-on-quarter to Rs1,720bn.

Deposits of the overall banking industry grew 6.5pc over the same period. The share of Islamic banks’ deposits in overall banking industry’s deposits increased to 13.7pc at the end of June from 13.2pc a quarter ago.

This growth helped Islamic banks improve their asset base. The SBP report said the share of Islamic banks’ assets in overall banking assets was 11.6pc at the end of June. The asset base of Islamic banks increased by Rs150bn or 8pc during the quarter to stand at Rs2,035bn.

However, the report revealed that growth in many sectors of Islamic banking registered by Sharia-compliant branches of conventional banks was more aggressive than that posted by fully fledged Islamic banks.

The share of fully fledged Islamic banks and Islamic banking branches of conventional banks in overall assets of the Sharia-compliant banking industry was 59pc and 41pc, respectively, at the end of June.

Islamic banks improved their investments, thanks to sukuk worth Rs71bn that the government issued in June.

Net investments of the Islamic banking industry increased Rs48bn or 9.9pc in April-June to Rs537bn at the end of June.

Net investments of fully fledged Islamic banks declined to Rs226bn at the end of June from Rs232bn a quarter ago.

In contrast, investments of Islamic banking branches of conventional banks increased by Rs54bn to Rs310bn against Rs256bn in the previous quarter.

During the same period, assets of Islamic banking branches of conventional banks witnessed quarterly growth of 14.2pc and were recorded at Rs825bn against Rs723bn in the previous quarter.

Net financing and related assets of the Islamic banking industry grew 5.9pc to Rs977bn over the same period.

The share of financing for small and medium enterprises (SMEs) in overall financing of the Islamic banking industry increased to 3.2pc from 2.9pc in the previous quarter.

The share of agricultural financing in overall financing by the Islamic banking industry stood at 0.4pc at the end of June.

Published in Dawn, September 12th, 2017

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Conciliatory approach
Updated 15 Oct, 2024

Conciliatory approach

Pakistan can only move forward when disillusioned segments of society are given their constitutional rights.
PCB mess
15 Oct, 2024

PCB mess

PAKISTAN cricket is in a state of turmoil — all the way from the boardroom to the field. Several decisions have...
Police brutality
15 Oct, 2024

Police brutality

IS our police leadership so devoid of ideas that cracking down on unarmed civilians is their only means of ...
SCO summit
Updated 14 Oct, 2024

SCO summit

All quarters, including political parties, must ensure that no hurdles are placed in the way of the SCO summit.
Not the answer
14 Oct, 2024

Not the answer

THE recent report from Justice Project Pakistan shows how urgently Pakistan needs to rethink its use of the death...
Foul killing
14 Oct, 2024

Foul killing

THE chasm between the powerful and the vulnerable, coupled with radicalisation within law enforcement, has turned...