ISLAMIC FINANCE

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Apr 9 - 15, 2012

ISLAMIC BANKING INDUSTRY PROGRESS AND MARKET SHARE
(Rupees in billion)

DESCRIPTION DEC-08 DEC-09 DEC-10 DEC-11
Total Assets 276 366 477 641
%age of Banking Industry 4.9 5.6 6.7 7.8
YoY Growth 34 33 30 34
Deposits 202 283 390 521
%age of Banking Industry 4.8 5.9 7.2 8.4
YoY Growth 37 40 38 34
Financing. & Invest. 186 226 338 475
%age of Banking Industry 4.4 4.5 6.2 7.4
YoY Growth 35 21 50 40
Full Fledge Islamic Banks 6 6 5 5
Conventional Banks with Islamic Banking Brs.* 12 13 13 12
No. of Branches (Including Sub Brs.) 515 651 751 886
* Faysal Bank acquired RBS on 31 Dec.2010 while Emirates Global Islamic Bank
Limited and Albaraka Islamic bank merged on Oct 29, 2010

ISLAMIC FINANCING CONCENTRATION - PERCENT SHARE

ITEMS DEC-10 SEP-11 DEC-11 INDUSTRY
Chemical and Pharmaceuticals 7 7 7 4
Agribusiness 3 3 4 8
Textile 22 17 20 18
Cement 4 4 3 2
Sugar 2 3 3 2
Shoes and leather garments 1 1 2 1
Automobile and transportation equipment 2 2 1 1
Financial 1 1 1 2
Insurance 0 0 0 0
Electronics and electrical appliances 2 1 2 2
Production and transmission of energy 7 10 10 10
Individuals 17 16 15 9
Others 33 34 31 41
Total 100 100 100 100

INTEREST RATES IN PAKISTAN

DATE RATES (%)
2-Aug-10 13.00
30-Sep-10 13.5
30-Nov-10 14.00
1-Aug-11 13.5
9-Oct-11 to date 12.00

ISLAMIC FINANCING MIX

INDICATORS

RUPEES IN BILLION

% SHARE

DEC-10 SEP-11 DEC-11 DEC-10 SEP-11 DEC-11
Murabaha 85.4 78.4 92.8 44.9 41.5 43.8
Ijarah 24.1 22.5 22.1 12.7 11.9 10.4
Musharaka 5.5 5.2 5.1 2.9 2.8 2.4
Mudaraba 0.3 0.3 0.3 0.2 0.1 0.1
Diminishing Musharaka (DM) 56.1 62.8 67.9 29.5 33.2 32.0
Salam 2.7 2.8 5.1 1.4 1.5 2.4
Istisna 11.0 7.2 9.3 5.8 3.8 4.4
Qarz/Qarz-e-Hasna 0.0 0.0 0.0 0.0 0.0 0.0
Others 4.9 9.8 9.2 2.6 5.2 4.4
Total 190.2 189.0 211.8 100.0 100.0 100.0

BREAK UP OF DEPOSITS
(Rupees in billion and growth in percent)

DESCRIPTION DEC-10 SEP-11 DEC-11 YOY QOQ
Deposits 390.1 463.1 521.0 33.6 12.5
Customers 363.2 433.7 483.2 33.0 11.4
Fixed Deposits 142.7 174.9 185.1 29.7 5.8
Saving Deposits 126.3 153.2 172.4 36.5 12.5
Current accounts - Remunerative 0.0 0.5 1.0 3,253.5 100.4
Current accounts Non remunerative 91.5 102.9 122.2 33.6 18.8
Others 2.7 2.2 2.5 (7.5) 12.2
Financial Institutions 26.9 29.4 37.8 40.7 28.7
Remunerative Deposits 26.8 29.2 37.5 40.0 28.3
Non-remunerative Deposits 0.1 0.2 0.3 228.6 93.7
CURRENCY WISE
Local Currency Deposits 371.7 444.0 499.6 34.4 12.5
Foreign Currency Deposits 18.4 19.0 21.4 16.5 12.2

ISLAMIC BANKING: EARNING & PROFITABILITY (percent)

. DEC-10 SEP-11 DEC-11 INDUSTRY
Net Income to Total Assets (ROA) 1 2 2 1
Return on Equity (ROE) 5 18 17 15
Net mark-up Income to Gross Income 78 82 82 76
Non-markup Income to Gross Income 22 18 18 24
Trading & Fx Gains/(Losses) to Gross Income 9 5 5 8
Operating Expense to Gross Income 73 59 60 51
Personnel Expense to Operating Expense 31 35 35 38

INTEREST RATE SPREAD OF PAKISTAN (%)

YEARS

AVERAGE YIELD ON EARNING ASSETS

AVERAGE COST OF INTEREST LIABILITIES

SPREAD

(a) (b) (a-b)
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

NON-PERFORMING LOANS (Rs in million)

.

AS ON 30.09.2011

BANKS/ DFIS NPLS NET NPLS NET NPLS TO NET LOAN (%)
All Banks & DFIs 629,555 215,977 6.53
All Banks 613,219 209,632 6.42
All Commercial Banks 577,778 196,020 6.18
Public Sector Banks 193,214 102,044 15.10
Local Private Banks 377,334 93,154 3.83
Foreign Banks 7,230 822 1.26
Specialized Banks 35,441 13,612 14.68
DFIs 16,336 6,344 13.49
Note: (Domestic and Overseas Operations)

PAKISTAN: REAL GDP GROWTH RATE (%)

2006-07 2007-08 2008-09 2009-10 2010-11
6.8 3.7 1.7 3.8 2.4

CATEGORIES OF BANKS IN PAKISTAN

CATEGORIES NUMBER
Public sector banks 5
Specialized banks 4
Private banks 17
Islamic banks 5
Foreign banks 7
Micro finance banks / institutions 8
Development finance institutions 8