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Islamic banking system assets swell to Rs276 billion - LahoreEstate - 03-30-2009 06:13 AM
Islamic banking system assets swell to Rs276 billion
By: Erum Zaidi | Published: March 29, 2009
KARACHI - The assets of Islamic Banking system have swelled to Rs276 billion, depicting 10.1 per cent growth during the fourth quarter of calendar year 2008 as against 2.6pc increase shown by conventional banking system during the period under review.
Accordingly, the share of Islamic Banks has further soared by 30 bps to 4.9pc by end Dec-08.
However, the overall performance of Islamic Banking Institutions (IBIs) during 4Q-CY08 has remained mixed. With improved profitability, increased deposit base coupled with sound capital adequacy, and well-maintained and expanding branch network, IBIs are well placed to expand and gain further share in the banking system in years to come.
Islamic banking industry in Pakistan, which started in CY02, has grown at an average annual rate of 37pc in 2008. Resultantly, the profitability of the IBIs after tax profit increased by Rs400 million to Rs1.8b by end Dec-08.
The outreach of Islamic Banking continued to expand during the quarter under review as its branch network grew by 39pc to 514 by the end of the quarter compared with 369pc at the end of Sep-08 and 291 in Dec-07.
SBP in its report mentioned the solvency of the Islamic banking system further strengthened to 17.50pc from 16.37pc in Sep-08, and well above the industry ratio of 12.2pc.
This increase is despite inclusion of additional capital charge for operational risk in CAR under Basel-II requirements for full fledge Islamic Bank and a couple of IBDs. CAR has improved for both groups of Islamic.
Deposits for Islamic banking grew at a rate of 17.7pc to Rs201.7b during the quarter (YoY growth 37pc) increasing their share in overall funding structure to 73pc.
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/29-Mar-2009/Islamic-banking-system-assets-swell-to-Rs276-billion