Islamic banks’ profits will increase by 70% in the first half of 2022.
The Islamic banking industry’s pre-tax profit grew to Rs. 73.4 billion by the middle of 2022, up from Rs. 42.6 billion recorded during the same time the previous year, representing a 72.3 percent year-on-year rise.
Profitability growth is attributed to consumers’ rising preference for Islamic banking, while Islamic banks earned tax benefits from the government due to greater advance/financing-to-deposit ratios compared to margins of banks parked in government papers.
The majority of full-fledged Islamic banks received the benefit, which eventually boosted these institutions’ bottom lines.
The Islamic banks’ and Islamic banking division’s investments in Sukuk issued by the federal government also increased, greatly improving their profits.
103 branches were added to the branch network of Islamic Banking Institutions during the period under review (IBIs). Likewise, IBI’s branch network surpassed the four-thousand barrier and was registered at 4,086. (spread across 129 districts of the country).
The profit share of the Islamic banking business in the total 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 statistics, the Islamic banking sector generated a before-tax profit of Rs. 73.4 billion, contributing to the industry’s total 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 sector was 19.5 percent and 20.5 percent, respectively.
