Habib Metropolitan Bank: Islamic Banking Business net assets climb by 26.93pct

By Riffat Mughal

KARACHI: Habib Metropolitan Bank Limited- Islamic banking business net assets surged by 26.93 percent during nine months of the calendar year 2011 (9MCY11). The net assets of the bank have reached Rs 1,447.765 million during the period as against Rs 802.141 million in the corresponding period last year.

Bank’s financing and receivables climbed up by 3.96 percent to Rs 5,682.244 million. In the total financing and receivables, Murabaha portfolio contributed Rs 3,784.271 million, showing a surge of 28.03 percent. Bank’s Ijarah portfolio reduced by 17.16 percent to Rs 1,110.614 million in the 9MCY11. Out of total financing and receivables, Murabaha portfolio contributed 66.60 percent, Ijarah portfolio constituted 19.55 percent and diminishing Musharaka made up 10.64 percent of the total financing and receivables.

Decline in Ijarah which is used for long term financing is a concern going forward. It seems that the bank is a bit behind in using the funds for long term investments in long term leased-based financing. Diminishing Musharakah, the declining equity model of financing ownership of assets also makes up a negligible portion of total assets. However, increase in Murabaha portfolio, which has most widespread application in providing finance, is a healthy sign going forward.

On liabilities side, total deposits and other accounts increased by 17.97 percent to Rs 15,653.735 million in 9MCY11 against Rs 13,268.693 million in the same period last year.

Among the deposit categories, current accounts climbed by 35.01 percent to Rs 1,470.801 million and term deposits jumped by 35.66 percent to Rs 6,947.098 million. In the total deposit mix, term deposits contributed 44.38 percent, savings account 21.76 percent and current accounts 9.40 percent during the period.

Banks advances to deposits ratio declined to 36.30 percent from 41.19 percent which indicates that bank needs to increase its advances so as to make full use of its capital and growing deposit base and the recent relaxation in policy rate which should increase demand of financing from the private sector.

Habib Metropolitan Islamic provides full range of Shariah compliant products and services to potential customers. The Islamic banking division of bank is equipped with sufficient expertise, necessary infrastructure, and manpower to run Islamic banking operations.


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