News : The Islamic banking industry in Pakistan grew by 7% quarter-to-quarter in Q213, according to Dawn. The Islamic banking industry ' s asset base reached US$8.4bn, which stands as y-o-y growth of 27%. The value of deposits came to 771bn, representing y-o-y growth of 28%. Analysts have speculated that the momentum powering the industry ' s growth was likely to weaken as the market ' s base expands.
BMI View: Moody's has kept its outlook for Pakistan's banking system at 'negative', citing the industry's high exposure to sovereign credit risk and a challenging domestic operating environment. While we sympathise with these concerns, we believe that a lot has changed in the country over the past few months (e.g. election of fiscally conservative government and movement towards a new IMF programme), and that the outlook for the country's banks is not as grim as the agency portrays in its seemingly static assessment.