The asset base of Islamic banking industry expanded by 30 percent to Rs477 billion in 2010 from Rs366 billion in 2009, State Bank of Pakistan (SBP) said in a report. Their non-performing finances (NPF) increased by 38.2 percent to Rs13.8 billion from Rs10 billion in 2009, the report added.
The central bank said that during the last quarter of 2010, Islamic banks’ assets grew by 12.5 percent to Rs477 billion from Rs424 billion in the quarter ended September 2010.
The NPF increased marginally during the quarter to Rs13.8 billion from Rs13.5 billion at the beginning of the quarter.
Recovery increased to Rs1.25 billion from last year’s figure of Rs0.8 billion. Investment and financing rose 96 percent and 18 percent, respectively, on quarter-on-quarter (QoQ) basis. “The unprecedented surge in investments is attributable to issuance of long-awaited Ijarah Sukuk of Rs89 billion during the quarter,” the report said.
“The handy growth of 18 percent in financing could be attributed to seasonal uptake in credit.” Cotton harvesting commences during the October-December quarter that gives significant rise to credit demand by textile sector. Share of financing by Islamic banks to the textile sector increased from 18 percent to 22 percent during the quarter, said the report. Investments and financing increased to Rs158 billion and Rs180 billion, respectively, in 2010 from Rs72 billion and Rs153 billion in December 2009.
source: Pakistan Observer