Islamic banking financing and related assets (net worth) increased by Rs. In the quarter ended September 2017, the figure was 58 billion (5.9%), reaching Rs. 1,035 billion rupees. The total amount of loans in the previous quarter (June 2017) was US $ 977 billion. The market share of Islamic bank deposits increased from 12.9% a year ago to the total share of Pakistani regular banks and Islamic banks, from 13.29% to 13.7%.
According to the analysis of the volume of business of Islamic banking and the number of transactions, said Musharka (Musharkah). Pakistan’s industrial sector is the largest borrower. The other major borrower is the electricity sector, which is building a transmission network to overcome the current energy crisis. Pakistan is the largest industry, accounting for 60% of its industrial sector and 40% of its total industrial workforce. It is the largest exporter and generator of Pakistani dollars.
The prevalence of Islamic banking has also been confirmed. In fact, “as of September 2017, the market share of Islamic banking assets has increased from 11.4% in 2016 to 16.5%. But there is good news: the loan-deposit ratio of Islamic banking registered during this period it was 59.8%. For the quarter ended September 2017, this figure increased from 52% in the same period of 2016 to 14.76 trillion rupees in September 2016, an increase of 17.1% to a total of Rs 1,729 trillion.
Who were the big borrowers?
Electricity production and transmission sector accounted for 15.4% of financing in 2016 at 16.8%, while textile fell from 14.9% last year to last year. 11.5%, while the business sector fell 71.3% from 79.8% last year. Consumer financing also fell from 11.8% in 2016 to 10.8% in 2017.
Credit for SMEs and agriculture fell from 3.2% in the same period in 2016 to 3.1% and from 3, 1% in the same period of 2016. And the quality of its operations and businesses has improved, and its ratings have been continuously improved. The latest bank to receive this honor is Dubai Islamic Bank Pakistan Limited (DIBPL). Its entity rating has been upgraded from “A + / A-1” to “AA- / A-1” by JCR-VIS Credit Rating Company Stable Appearance.
Meezan Bank has AA in the long term and A-1 + in the short term. Bank Islami uses A1 for the long term and A + for the short term. Thus, it can be seen that the Islamic banking industry in Pakistan has not shown an improvement in financing the neediest sectors. For example, your financing for agriculture only represents 0.5% of your total financing, while traditional aspects only represent 5.0% of your total financing.
For small and medium-sized companies, their financing only represents 3.1% of their total financing, while traditional financing only represents 6.0% of total financing. Therefore, with the growth of deposits, Islamic banking lags far behind others in financing for most industries in need, mainly due to the inability to meet the required products and the lack of experience to handle employees in those sectors.