BankIslami Pakistan looking toward Saudi and UAE markets for expansion
BankIslami Pakistan is poised for a significant expansion
beyond national borders, eyeing the Gulf markets, particularly Saudi Arabia and
the United Arab Emirates (UAE), for its overseas operations. The move aims to
establish BankIslami as the first Islamic bank in Pakistan to operate on
foreign shores, according to a top official.
Established in 2005, BankIslami has grown into one of
Pakistan's leading Islamic banks, offering a range of Shariah-compliant banking
products and services. With JS Bank as its majority shareholder, the bank is
listed on the Pakistan Stock Exchange (PSX) with a market capitalization
exceeding Rs24 billion. Financial results posted on the PSX website reveal a
net profit of Rs3.3 billion for the quarter ending September 30, 2023.
State
Bank grants approval for sale of BankIslami shares to JS Bank
Rizwan Ata, President and CEO of BankIslami Pakistan,
disclosed the bank's plans for both local and international expansions, with a
primary focus on Saudi Arabia and other Gulf markets. Ata emphasized Saudi
Arabia as a priority due to the significant remittances from overseas
Pakistanis, followed by the UAE, which represents the second-largest source of
remittances.
BankIslami's overseas expansion ambitions also include Kuwait,
Qatar, Oman, and various other Middle Eastern states. Ata highlighted that
while other banks have international chains, BankIslami, as a Pakistan-based
bank, aims to be the first to operate overseas.
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In addition to its global aspirations, BankIslami plans to
strengthen its domestic presence by adding 100 more branches to its current
network of over 400 branches by the end of the year. The bank is also
leveraging digital capabilities, with 60% of its operations being digital. It
aims to launch an exclusive state-of-the-art digital branch by the fourth
quarter of 2024, offering unmanned services such as issuing cheque books, pay
orders, and ATM cards.
Islamic banking has gained significant traction in Pakistan,
with market shares of assets and deposits reaching 19.6% and 22.5%,
respectively, by the end of September 2023. The Federal Shariat Court (FSC)
ruling in April 2022 mandates the transition of Pakistan's entire banking
system from interest-based to interest-free operations within five years, setting
December 2027 as the deadline for the complete elimination of interest from the
country's banking system. BankIslami's CEO expressed optimism about meeting the
deadline, citing the collective efforts of banks in embracing Islamic banking
principles.
Source: Pakistan Observer