PAKISTAN'S ISLAMIC FINANCING SECTOR

S.M. ABBAS ZAIDI, S.KAMAL HAYDER KAZMI
Research Analyst
, PAGE
Dec 22 - 28, 2008

INTEREST RATE SPREAD
(%)
YEARS AVERAGE YIELD ON EARNING ASSETS AVERAGE COST OF INTEREST LIABILITIES SPREAD
  (a) (b) (a-b)
CY98 14.0 8.5 5.4
CY99 12.7 7.7 5.0
CY00 11.3 6.6 4.7
CY01 11.2 6.1 5.1
CY02 8.7 4.3 4.5
CY03 5.7 2.0 3.8
CY04 5.0 1.5 3.5
CY05 7.5 2.6 5.0
CY06 9.1 3.9 5.2
Source: SBP


WEIGHTED AVERAGE LENDING & DEPOSIT RATES
(Percent per annum)
  GROSS DISBURSEMENTS OUTSTANDING LOANS FRESH DEPOSITS OUTSTANDING DEPOSITS

ITEMS

INC. ZERO MARKUP EXC. ZERO MARKUP INC. ZERO MARKUP EXC. ZERO MARKUP INC. ZERO MARKUP EXC. ZERO MARKUP INC. ZERO MARKUP EXC. ZERO MARKUP
OCT-08
Public 17.23 17.28 13.65 14.27 12.97 14.34 5.82 7.64
Private 16.09 16.13 14.04 14.45 9.88 11.7 6.22 8.24
Foreign 11.88 12.04 16.05 16.65 6 8.66 6.75 8.97
Specialized 9.7 9.79 9.05 9.66 3.03 6.62 5.7 8.42
All Banks 15.54 15.6 13.89 14.35 9.53 11.52 6.17 8.17
OCT-07
Public 11.80 11.84 11.21 11.79 5.16 6.35 3.88 4.91
Private 10.97 11.00 11.30 11.74 5.88 7.28 4.13 5.51
Foreign 10.28 10.35 15.03 15.30 5.88 7.14 5.46 6.95
Specialized 10.05 10.05 9.03 9.60 9.21 10.48 5.72 7.45
All Banks 10.97 11.00 11.33 11.80 5.83 7.18 4.14 5.46
OCT-06
Public 12.18 12.36 10.86 11.39 5.24 7.22 3.03 3.96
Private 11.35 11.47 10.64 11.13 5.16 6.65 3.39 4.61
Foreign 9.09 9.39 13.10 13.35 4.63 5.89 3.66 5.28
Specialized 9.16 9.16 9.02 9.72 5.90 8.63 5.28 6.97
All Banks 11.08 11.23 10.81 11.31 5.09 6.56 3.35 4.55
Source: SBP


FINANCIAL HIGHLIGHTS OF ISLAMIC BANKING IN PAKISTAN
DESCRIPTION DEC.03 DEC.04 DEC.05 DEC.06 DEC.07
Total Assets 13 44 71 119 206
% of Banking Industry 0.5% 1.5% 2.0% 2.8% 4.0%
Deposits 8 30 50 84 147
% of Banking Industry 0.4% 1.3% 1.8% 2.6% 3.8%
Financing & Investment 10 30 48 73 138
% of Banking Industry 0.5% 1.3% 1.7% 2.3% 3.5%
Full fledged Islamic Banks (IBs) 1 2 2 4 6
Branches of IBs 10 23 37 93 186
Conventional Banks with IBBs 3 9 9 12 12
Branches of CBs 7 25 33 57 103
Total Islamic Banking Institutions 4 11 11 16 18
Total No. of Branches 17 48 70 150 289
Source:: SBP


COMPOSITION OF FINANCING 2007 (%)
Murabaha 44.5
Diminishing Musharka 25.6
Ijarah 24
Musharka 1.6
Salam 1.4
Istisna 1
Mudarba 0.3
Qarz/ Qarz-e- Hasna 0
Others 1.6
COMPOSITION OF DEPOSITS 2007 (%)
Fixed deposits 36.2
Savings deposits 32.3
Current account 20.3
Financial institutions 10.3
Others 0.9
Source: SBP


FORECAST OF ISLAMIC BANKING
  2008 2009 2010 2011 2012
Expected Deposit Size(mn) 215,938 340,128 499,036 722,109 907,064
Expected Financing Size (mn) 184,641 277,153 413,594 600,014 731,591
Total No. of Branches 436 655 939 1,205 1,351
Source: SBP


KIBOR

(%)

TENOR BID OFFER
15-JAN-08
1 - Week 9.53 10.53
2 - Week 9.54 10.04
1 - Month 9.46 9.96
3 - Month 9.47 9.97
6 - Month 9.55 10.05
9 - Month 9.73 10.23
1 - Year 9.96 10.46
15-FEB-08
1 - Week 8.72 9.72
2 - Week 9.03 9.53
1 - Month 9.23 9.73
3 - Month 9.48 9.98
6 - Month 9.76 10.26
9 - Month 9.98 10.48
1 - Year 10.21 10.71
15-MAR-08
1 - Week 9.81 10.81
2 - Week 9.77 10.27
1 - Month 9.64 10.14
3 - Month 9.67 10.17
6 - Month 9.84 10.34
9 - Month 9.98 10.48
1 - Year 10.21 10.71
15-APR-08
1 - Week 9.56 10.56
2 - Week 9.67 10.17
1 - Month 9.66 10.16
3 - Month 9.76 10.26
6 - Month 9.89 10.39
9 - Month 10.01 10.51
1 - Year 10.23 10.73
16-MAY-08
1 - Week 9.89 10.89
2 - Week 10.15 10.65
1 - Month 10.16 10.66
3 - Month 10.43 10.93
6 - Month 10.58 11.08
9 - Month 10.68 11.18
1 - Year 10.78 11.28
16-JUN-08
1 - Week 11.79 12.79
2 - Week 11.84 12.34
1 - Month 12.08 12.58
3 - Month 12.38 12.88
6 - Month 12.64 13.14
9 - Month 12.78 13.28
1 - Year 12.96 13.46
15-JUL-08
1 - Week 10.80 11.80
2 - Week 11.41 11.91
1 - Month 12.42 12.92
3 - Month 13.44 13.94
6 - Month 13.65 14.15
9 - Month 13.84 14.34
1 - Year 14.00 14.50
15-AUG-08
1 - Week 12.43 13.43
2 - Week 12.47 12.97
1 - Month 12.48 12.98
3 - Month 12.78 13.28
6 - Month 13.01 13.51
9 - Month 13.26 13.76
1 - Year 13.51 14.01
15-SEP-08
1 - Week 12.74 13.74
2 - Week 13.01 13.51
1 - Month 13.17 13.67
3 - Month 13.32 13.82
6 - Month 13.43 13.93
9 - Month 13.54 14.04
1 - Year 13.76 14.26
15-OCT-08
1 - Week 13.40 14.40
2 - Week 13.89 14.39
1 - Month 14.11 14.61
3 - Month 14.29 14.79
6 - Month 14.34 14.84
9 - Month 14.42 14.92
1 - Year 14.51 15.01
15-NOV-08
1 - Week 10.29 10.79
2 - Week 11.71 12.21
1 - Month 13.86 14.36
3 - Month 15.20 15.45
6 - Month 15.44 15.69
9 - Month 15.45 15.95
1 - Year 15.55 16.05
15-DEC-08
1 - Week 7.94 8.44
2 - Week 8.95 9.45
1 - Month 13.45 13.95
3 - Month 15.20 15.45
6 - Month 15.40 15.65
9 - Month 15.49 15.99
1 - Year 15.55 16.05
Source: SBP