islamic finance

Net profit of 3 Islamic banks up 154.2% in 2019 (BCT Report)

March 22, 2021

(TAP)-The net profit of the three Islamic banks posted an exceptional rise by 154.2% in 2019, reaching 61 million dinars (MD) against 24 MD, in 2018, according to the 9th annual report on banking supervision for 2019, published by the Central Bank of Tunisia (BCT).

The presence of Islamic banks in the banking landscape was thus consolidated, with shares increasing in 2019 by 0.4% in terms of total assets, 0.6% in terms of deposits and 0.8% in terms of credits to stand at 6%, 6.9% and 5.6% respectively.

The operating assets of Islamic banks totalled 5501 million dinars (MD) at the end of 2019, showing an increase of 1052 MD, i.e. 23.6% compared to 2018.

The Islamic banks' credit portfolio amounted to 4752 MD mainly composed of Murabaha (68.8%) and Ijara (17.5%) operations.

According to the BCT report, these banks' resources grew at a slower pace in 2019 than in 2018, i.e. 16.6% against 21.3%. The deposits of banks carrying out Islamic operations stood at 5340 MD and consisted of 32.8% of sight accounts, 37.5% of savings accounts and 20.2% of participatory deposits.

The medium and long term resources of Islamic banks dropped for the third consecutive year with a more accentuated pace in 2019 (36.3% against 21.5% in 2018 and 20% in 2017).

These resources only account for 1.9% of the total operating resources of Islamic banks compared to 5.3% in 2017.

The Islamic banks' outstanding classified loans edged up by 57 MD, i.e. 17.1% compared to 2018, reaching 392 MD.

The cost/income ratio of Islamic banks improved by 2 percentage points compared to 2018, to stand at 68.8%.

According to the report, the weight of operating expenses and depreciation continue to weigh on the profitability of Islamic banks, which explains the stagnation of these banks' profitability indicators with a return of assets (ROA) of 0.3% and a ROE of 3.1%.

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