The Islamic banking industry’s pre-tax profit increased to Rs. 73.4 billion by the mid of 2022, up from Rs. 42.6 billion reported in the same period of the previous year, representing a 72.3 percent year-on-year increase.
Profitability growth is attributed to customers’ increasing preference for Islamic banking, while Islamic banks received tax breaks from the government due to higher advance/financing-to-deposit ratios versus margins of banks parked in government papers.
The majority of full-fledged Islamic banks received the benefit, which ultimately benefited these institutions’ bottom lines.
The Islamic banks’ and Islamic banking division’s investments in Sukuk issued by the federal government also increased, significantly improving their margins.
103 branches were added to the branch network of Islamic Banking Institutions during the period under review (IBIs). Similarly, IBI’s branch network surpassed the four-thousand mark and was recorded at 4,086. (spread across 129 districts of the country).
The profit share of the Islamic banking industry in the overall banking industry has increased to 24.4 percent by the middle of 2022, up from 19.5 percent in the previous calendar year.
According to available data, the Islamic banking industry made a before-tax profit of Rs. 73.4 billion, contributing to the industry’s overall pre-tax profit of Rs. 300 billion by the middle of 2022.
By the end of June 2022, the market share of Islamic banking assets and deposits in the overall banking industry was 19.5 percent and 20.5 percent, respectively.