Islamic banks record the highest growth in assets and deposits

KARACHI: Assets of the Islamic Banking Industry (IBI) reached new highs during CY21 to reach 5.577 trillion rupees, marking the largest increase ever of 1.308 tr, the Bank’s Islamic Banking Bulletin reported on Friday. of State of Pakistan (SBP).

The share of Islamic banks rose to 18.6 percent in the entire banking sector, the report added.

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

“Due to this strong growth, the market share of Islamic banking assets and deposits in the entire banking sector increased to 18.6% and 19.4%, respectively, at the end of December 2021,” the SBP report states. .

The report indicates that IBI assets increased by 30.6% during CY21, while deposits increased by 24.2% during the same period.

The increase in IBI’s assets was driven by both private and public sector funding and investments in Shariah-compliant securities.

“IBI funding recorded an increase of Rs 716 billion (38.1%) during CY21, which is also the largest increase ever recorded in a year,” the report said.

IBI’s investments grew by Rs 591 billion (46.9%) in year 21 thanks to sovereign sukuks issued by the Pakistani government.

On the funding side, current deposits and savings deposits of IBI registered a significant increase of Rs441bn and Rs277bn, respectively, during CY21.

“The growth in deposits is also due 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,” the report said.

The total number of branches now stands at 3,956 in 125 districts, or about 25% of the total number of commercial bank branches in the country.

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

Posted in Dawn, April 2, 2022

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