KARACHI: Assets of the Islamic Banking Industry (IBI) reached new peaks during CY21 to reach Rs5.577 trillion, marking the highest-ever increase of Rs1.308tr, the State Bank of Pakistan’s (SBP) Islamic Banking Bulletin said on Friday.

The share of Islamic banking increased to 18.6 per cent in overall banking industry, the report added.

The SBP report further revealed that the deposits of IBI also saw a record increase with an addition of Rs822bn in CY2021 to reach Rs4.211tr.

“As a result of this strong growth, the market share of Islamic banking assets and deposits in the overall banking industry increased to 18.6pc and 19.4pc, respectively, by end Dec 2021,” said the SBP report.

The report said the assets of IBI grew by 30.6pc in CY21, while deposits increased by 24.2pc during the same period.

The increase in assets of IBI was driven by both financing to the private and public sector and investments in Sharia-compliant securities.

“Financing by the IBI recorded a rise of Rs716 billion (38.1pc) during CY21, which is also the highest ever increase during a year,” said the report.

Investments of IBI witnessed a growth of Rs591bn (46.9pc) during CY21 on the back of domestic sovereign sukuk issued by the government of Pakistan.

On funding side, current deposits and saving deposits of IBI noted significant increase of Rs441bn and Rs277bn, respectively, during CY21.

“The growth in deposits is also owed to the fact that, during CY21, the availability of Islamic banking services increased in the country with the addition of 500 new Islamic banking branches,” said the report.

The total number of branches now stands at 3,956 across 125 districts, which is around 25pc of the total number of commercial banks’ branches in the country.

Disbursements under the Temporary Economic Refinance Facility, the IBI also contributed significantly.

Published in Dawn, April 2nd, 2022