KARACHI, Aug 30: Collective profits of all Islamic banks operating in Pakistan could not reach even half a billion rupees last year while the conventional banking generated massive profit for the sector.

Among 39 scheduled banks, four are in operation as full Islamic banks, but their existence in terms of advances, deposits, assets and profits was simply negligible, putting no threat or competition to conventional bankers.

Balance-sheets of Islamic banks showed that the two banks earned profits while the two others booked losses during the year.

The Meezan Bank was the only bank which exhibited some potential to grow and earned a profit-before-tax of Rs780 million.

Al-Baraka Islamic Bank showed a token profit of Rs170 million. The rest of the two banks were in losses. Dubai Islamic Bank Pakistan showed a loss of Rs633 million while the loss of Bank Islami Pakistan was to the tune of Rs34 million.

The whole balance-sheets of Islamic Banks showed a poor performance while comparing it with growth in banking industry, and profits earned by conventional banks in Pakistan.

Islamic banking industry has been claiming to establish a parallel banking system in the country, but growth of Islamic banking is reverse against the claim.

Collective profits of Islamic banks (after deduction of total losses) could hardly reach Rs283 million.

Even the smallest traditional bank earned much more profit than what Islamic banks earned last year.

The size of the Islamic banking industry is also disappointing for those who are making efforts to bring it parallel to the existing banking system.

Total deposits of the banking industry were just Rs53.8 billion while the highest deposit of Rs34 billion was of one bank, Meezan Islamic Bank.

Deposits of Dubai Islamic Bank were Rs4.3 billion, Bank Islami Pakistan Rs1.7 billion and Al Baraka Bank Rs13.8 billion.

The collective assets, advances and deposits of the Islamic banking were far from the competitive figures in the banking industry.

The collective assets of the Islamic banks were just 1.8 per cent of the total banking assets.

Similarly, collective advances of Islamic banks (Rs40.7 billion) were 1.7 per cent of the total advances, and collective deposits were also just 1.7 per cent to the entire baking deposits.

The traditional banks have also grabbed their share from the Islamic banking. Most of commercial banks have opened windows through their branches to offer Islamic products.

The last five years’ performance, as reflected from the balance-sheets of the Islamic banks, did not appear popular banking in Pakistan.

It is also reflected in the record growth in the conventional banking during the five years that the Islamic banks could not bring any significant change in the banking of the country.