The Performance of Takaful Companies (2011)
Compiled by Aamir Sheikh and M. Saad Faruqui
Ayat of the Month

Overview of Takaful market
In the recent years, Takaful has made its place in Pakistani market at a rapid pace. This is supported by the rules and regulations issued by SECP (Securities and Exchange Commission of Pakistan) over the years. Recently, SECP issued Takaful Rules, 2012 allowing insurance companies to setup window Takaful operations. However, Takaful companies filed a petition through which the Sindh High Court (SHC) restrained SECP from implementing the Takaful Rules, 2012. Takaful companies are of the view that the new rules had been issued by the SECP without considering the opinions of religious scholars who would have advised the regulator that the new rules were not in line with the Islamic principles. However, the matter is still pending in court. Currently the market has 5 players, two family Takaful and three general Takaful companies.

Overall profitability growth of Takaful Companies during 2011
In 2011, various Takaful companies in Pakistan have

In the recent years, Takaful has made its place in Pakistani market at a rapid pace. This is supported by the rules and regulations issued by SECP over the years.

O you who believe, when the call for Salah (prayer) is proclaimed on Friday, hasten for the remembrance of Allah, and leave off business. That is much better for you, if you but know. Then once the Salah is over, disperse in the land, and seek the grace of Allah, and remember Allah abundantly, so that you may be successful. [Surah AlJumu’a:9,10]

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Ask US 13 By Mufti Ibrahim Essa and Mufti Javed Pakistan Islamic Banking Industry Analysis 14

Modern Islamic finance is a recent phenomenon. Simply put. The issuer also makes a contractual promise to buy back the bonds at a future date at par value. but the Page 2 An initiative of IFP forum . According to Moody‟s report on Islamic Banks and Sukuk.Editorial Sukuk is an Islamic financial certificate. it prohibits the charging or payment of interest as to conventional bonds. in your view. As the traditional Western interest paying bond structure is not permissible. growth rates are at least twice as high as those recorded on global conventional financial markets. The emergence of Sukuk has been one of the most significant developments in Islamic capital markets in recent years.ifp@gmail. liquidity in the Sukuk market is expected to improve gradually as the variety of Sukuk issuances widens. who then rents it back to the issuer for a predetermined rental fee. Sukuk issuance has proven its resilience during the recent periods of global capital markets financial crisis. Happy Reading! Advisory Board Mufti Irshad Ahmed Aijaz Mufti Najeeb Khan Anwar Ahmed Meenai Mohammad Aslam Mujeeb Baig Syed Shahjahan Salahuddin Faizan Memon Editor-in-Chief NusratUllah Khan Associate Editors Muhammad Shahzad Hussain Arshad Hussain Zubairi Ammar Khalid Rima Farooq Let us know. As Sukuk securities adhere to Islamic laws sometimes referred to as Shariah principles. Only 30 years have passed since the first fully fledged Islamic financial institution (IFI) emerged. with a wide pool of investors. thereby acting as a bridge for linking issuers with a pool of investors. Send us their email addresses at newsletter. geographic location and credit quality of future issuers are also expected to considerably diversify. may benefit from this newsletter. Not only the volumes are expected to exceed by the end of the current decade as seen by the industry experts. that complies with Shariah. similar to a bond in Western finance. many of whom are seeking to diversify their holdings beyond traditional asset classes. the issuer of a Sukuk sells an investor group the certificate. and the market for Sukuk (Islamic bonds) was non-existent up until the beginning of this century. Nevertheless. Sukuk instruments links their issuers. if you know friends or colleagues who. In its simplest form Sukuk are assetbacked trust certificate evidencing ownership of an asset or its usufruct.

the reduction in various expenses. the rise in net investment income by 89% and the reduction in the expenses such as expenses not attributable to statutory fund moved down by 28% also contributed to the reduction in the loss. it recorded the loss of PKR 28 million where as in 2011 it registered a profit of PKR 8 million. Dawood Family Takaful Limited (DFTL) loss further heightened by 38%.000.0 50.Takaful Contribution in 2011 (Rs. It was due to rise in contribution income (annualized) of different segments such as individual family by 78%. management fee by 7% and general and administration expenses by 9% also contributed to the increase to some extent. Pak Qatar Family Takaful Limited (PQFTL) reduced its loss from PKR 72 million to PKR 9 million.00 600.Continued… The Performance of Takaful Companies (2011) performed well in terms of profitability. it represents the significant movement around 91%.200.0 20.00 400. in million) 60. In the case of Takaful Pakistan Limited (TPL). It was mainly Expense Ratio (2011) 70% 60% 65% 50% 40% 30% 20% 10% 0% PQGTL PQFTL 26% 12% 13% 9% DFTL PKT TPL Takaful companies profitability graph have moved up in the recent years.0 30.00 1.400. for instance.0 40.00 200.0 10. in million) 1. This could be judged by the financial results of the Takaful leaders in Pakistan. Moreover. The primary reason behind the fluctuation was the significant rise in the commission expenses by 35% and the management expenses by 14%. supported by the reasonable growth in the different segments of the business especially by motor (which represents 71% of contribution) and fire (which represents 13% of total contribution) segment. it also posted the loss of PKR 35 million into the profit of PKR 3 million. due to the significant reduction in the direct expenses by 68 % and the Gross Takaful contribution received in 2011 (Rs. Moreover. It was mainly due to the favorable movement in gross contributions by 52% in 2011.00 800. profit moved down by 27% which was primarily due to the rise in net commission by 106% and the reduction in the net investment income by 21%. Pak Qatar General Takaful Limited (PQGTL) converted its loss before tax into profit in the year 2011. the fall in investment income by 24% also moved the loss figure up. Moreover.0 PQFTL DFTL PKTCL TPL PQGTL PQFTL DFTL PKTCL TPL An initiative of IFP forum .00 1. group family by 113% and group health by 61%. In the year 2010.00 PQGTL Page 3 Re . Pak-Kuwait Takaful Company Limited‟s (PKTCL). solely based on the profitability.

DFTL and TPL. DFTL PTF figure increased by 144.8% . Company‟s SHF increased by 19. non-motor segment There was slight improvement witnessed in PTF of PQFTL. Moreover.7% compared to 2010 which improved PTF performance. the analysis of SHF reveal that except in the case of DFTL every other operator‟s SHF fund showed improvement. PTF and SHF Position in 2010 (Rs. There was slight improvement witnessed in PTF of PQFTL.Continued… The Performance of Takaful Companies (2011) Management Expense Ratio (2011) 70% 60% 50% 40% 30% 20% 10% 0% increase in other income by 29%. However. the increase in Shariah compliant fixed income and investment in low risk government backed Sukuks supported the increase in the fund.9% compared to 2010 results. Investment income of PTF increased by 2. PKTCL PTF performance weakened as the deficit further decreased 12.8%. 63% also support the improvement in the performance of PTF. DFTL and TPL. the primary reason behind the same Conclusion Analysis of Participant’s Takaful Fund (PTF) and Shareholder’s Fund (SHF) PQGTL‟s PTF accumulated deficit further increased by 11. However. Accumulated loss in the year caused the SHF to decrease. Moreover.7% increasing the accumulated deficit. in million) PTF 2011 SHF 2011 552 490 434 447 362 267 275 155 131 23 DFTL PKTCL -257 9 TPL PQGTL -104 PQFTL DFTL PKTCL 134 56 13 TPL 72 PQGTL -93 PQFTL -290 An initiative of IFP forum Page 4 . the same showed an increasing negative trend in PQGTL and PKTCL. the same showed an increasing negative trend in PQGTL’s and PKTCL’s PTF. which is caused by increased paid up capital and better returns on investments in certain cases. The gross contribution allocated to the PTF moved up by 54.1% in 2011 compared to the previous year. The main reason behind the improvement in the performance of the fund was the surplus in individual life and group life which overall strengthened the Takaful pool. PQGTL Shareholders Fund (SHF) made pace ahead compared to the previous year as accumulated loss moved down by 20. in million) PTF 2010 SHF 2010 643 PTF and SHF Position in 2011 (Rs. was the increase in the issued share capital. PQGTL 37% 20% 22% 14% PQFTL DFTL PKT TPL PQFTL Participation Reserve Fund improved by 115% compared to the last year.2% Moreover. the reduction in management fee by 53% also contributed to the profitability. Moreover.

548 Disclaimer: The data presented in this summary is extracted from the published audited financial statements of the respective Takaful companies for the year ended 31 December 2011.771.307.603. 4.174.327 10.407 902.690 (289.596) PQFTL 2.245 321.653 DFTL Amounts in Rupees PKTCL TPL 873.498.013 2.568538 203.353) 5.621.460 1. User discretion advised.563 459.074. 2.000 552.297.910.062 152.236 202.689.Continued… The Performance of Takaful companies (2011) Financial summary of the Takaful Companies for the year 2011 Statement of Financial Position Sr.919 307.025.228.334 1.757. Profit / (loss) after taxation 13.379 72.180 134.035.741.735 500.000.911 710.142 129. Management expenses 16.902.010.879.496 155.072.564.000 56.629 14.703 159.834.019 333.156.680 341.017 544.148.078 174. Net investment income 6.907.569.641 2.095.656 14.870. Description Total assets Investments Waqf / Cede money Creditors and accruals Total liabilities Paid up capital Share holders’ fund Participants’ Takaful fund PQGTL 443..000.380.325 86.957 1.159.422.715.376 1.716 3.532.861 169.448.489 19.022.866.984 25.055.323 (9.233 56. Net contributions 103.930.366. Taxation 12. Commission expense 15.628.000 300.557.223.009 116.439) 34.131 750.284 37. 5.000 57.231 500.177.569 121.637.373. Profit / (loss) before taxation 11.358.453 206.996 681.756.323 31.855.051.895.395. Page 5 An initiative of IFP forum .180 11.415 500.246) 12.317.274. 6.342 266.867.000 237.039.446.462 42.180.306.472 100.057 271.641) 29.655 Statement of Comprehensive Income 9.712 (90. 49.000 400. 3.609.000 272.800.372 500.080 275. No 1.452 (103.825.684 148.421.614 488.318 8. 7.707 481.364.000 116.036.775 131.593.113.116) (115.289 489. The newsletters management does not take any responsibility of authenticity of any data presented here and will not assume any liability due to any loss or damage caused by the usage of the information presented here.000 54.375.587.879.828.850 434. Wakala fees (4.606.

The bank was a result of the collaboration between Kuwait and Turkey. NASDAQ Dubai welcomes $650 million JAFZ Sukuk to its market NASDAQ Dubai welcomed the listing of a $650 million Sukuk by Jebel Ali Free Zone ( JAFZ ) on its market. The sultanate has decided to allow the establishment of Islamic banking and the opening of new outlets for Islamic banking products and services at existing banks. Experts believe that in order to tap the immense investment potential of the oil-rich Middle East. The team will submit its report by the end of August. The aim is to take advantage of the rising demand for Islamic banking services and products. KFH-Turkey began officially working in Istanbul as the first Islamic bank in Turkey. bringing the total nominal value of its listed Sukuk to $7. which is seven times larger. following the principles of Shariah law.Announcement of the Islamic Financial Services Board's awareness program and FIS workshops 2012 The Islamic Financial Services Board (IFSB) is pleased to announce the upcoming awareness programmes and the Facilitating the Implementation of IFSB Standards workshops that will be held throughout the third and fourth quarters of 2012. it was in India‟s interest to introduce Islamic Banking. particularly in Berlin. Indonesia to allow currency hedging for banks Indonesia will let Shariah-compliant banks hedge against exchange-rate movements to spur growth in Islamic financial assets and narrow the gap with Malaysia‟s industry. KFH-Turkey: 23 years of successful leadership of Kuwaiti private sector in Turkey On 31st March 1989. Oman Development Bank (ODB) has decided to set up a team to study the current products and services the bank offers and the possibility of adding new products and services that are in line with Shariah. in Frankfurt-am-Main in cooperation with Ernst and Young auditing company and Norton Rose law firm. Kuwait's experience in this field and Turkey's promising economy. The Ministry of Finance recently asked the Reserve Bank of India to reconsider such a possibility. who believed in establishing an Islamic bank that depends on ODB constitutes team to study Islamic banking products and services In an aim to provide customers with Shariah-compliant banking products and services in the near future. As for other European countries. India may introduce Islamic Banking The government is considering introducing Islamic Banking in the country. available in Malaysia since 2006. the National Shariah Board and the Indonesia Institute of Accountants have approved the instruments. such banks are already providing their services in Britain. The listing confirms the exchange's status as the largest in the Middle East for Islamic bonds. Disclaimer: The news included here is on the basis of information obtained from local and international print and electronic media sources. Page 6 An initiative of IFP forum . The other branches of the bank will be opened in German cities with large Muslim communities.1 billion. This led to a bank that is a source of pride for Kuwait and the GCC. Plan to open first Islamic Bank in Germany Kuveyt Turk plans to open its first branch. Bank Indonesia. IFP team does not accept any responsibility about their bona-fide. Mortgage law to spur Islamic finance Saudi Arabia's approval of a landmark mortgage law after a delay of more than three years will give rise to Islamic funding and tackle some of the challenges in the real estate sector in the Kingdom of Saudi Arabia.

Page 7 An initiative of IFP forum .Sizing the retail market' points to a very strong interest from local consumers in Islamic Finance products and services. a licence will be given only after the regulating authority announces a separate set of rules for Shariah-compliant insurance companies and Islamic debt instruments like Sukuk. where it noted that significant developments occurred during the past years in South Africa. ONIC starts dialogue for JV Takaful firm Oman's leading investment holding company Oman National Investment Corporation (ONIC) holding is negotiating with a regional Islamic insurance firm to jointly promote a Takaful company in Oman. entitled 'Islamic Finance in Morocco . Gulf bond issuance activity to remain fairly robust Gulf region's issuance activity is likely to remain fairly robust in the coming quarters. Over 90% of Moroccan consumers interested in Islamic finance survey findings revealed Key findings published in July from Morocco's first independent market study. most notably banks.S&P Indices launches Shariah Index with OIC S&P Indices announced the launch of the S&P/OIC COMCEC 50 Shariah Index. the National Commercial Bank said in its latest GCC Financial Market Quarterly.the benchmark Islamic bank in Qatar . Emirates Money and Aman Insurance in partnership to launch "Banca Takaful" insurance programme Emirates Money. a wholly owned subsidiary and consumer finance arm of the Emirates NBD Group. QIB teams up with QIIB to provide $380m finance package for Nakilat QIB . partly because of refinancing requirements. Disclaimer: The news included here is on the basis of information obtained from local and international print and electronic media sources. IFP team does not accept any responsibility about their bona-fide. which is designed to measure the performance of 50 leading Shariah-compliant companies from the member states of the Organization of Islamic Cooperation (OIC). Dubai Islamic Bank ( DIB ) announced the launch of its annual Iktaseb summer training programme for young UAE nationals. Over 80% of the Kingdom's consumers indicated their likelihood to take up a Shariah compliant financing (loan) upon launch. after the government decided to allow Islamic banks and insurance firms. announced the launch of "Banca Takaful" insurance product. However. The Index has been designed in partnership with the OIC. KFH-Research: Promising potential and numerous challenges facing Islamic finance in South Africa KFH-Research prepared a report about Islamic banking in South Africa. 105 young Emiratis embark on DIB’s Iktaseb summer training programme As part of the Bank's contribution to the UAE community. The value of the Sharia'-compliant 'Murabaha' financing is $380 million. Such developments allow South Africa to become one of the most important African countries in the Islamic finance field. ONIC Holding has already received an 'in principal' approval from the Capital Market Authority (CMA). partly thanks to formally approved issuance programs by a growing number of regional companies. in conjunction with Dubai Islamic In sur a nc e an d R ei nsu ran c e company (AMAN) and FWU Global Takaful Solutions.has announced the signing of a financing package for the Qatar Gas Transport Company ( Nakilat ) in partnership with Qatar International Islamic Bank ( QIIB ).

Islamic bond sales in Saudi Arabia rose to a record this year as demand outstrips supply. The package includes personal and vehicle finance up to AED 75. the bank's customers can now enjoy highly secure. set up in April last year. The agency has also assigned a „BBB-‟ rating to the debut five-year RM240m issue of Sukuk. Sukuk offerings jumped to about $8. if they break the code. announced the launch of a banking package for new entrants to the UAE. Dubai Trade's Rosoom epayment gateway now available to DIB customers Dubai Islamic Bank ( DIB ) now offers its customers full online payment facilities through Rosoom. has completed issuing $267m short-term sukuk. Page 8 An initiative of IFP forum . or about 47 percent of the GCC's total issuance this year. Axiata Group: Malaysia unit raised $1. along with various account options and online banking facilities. the leading cross-border trade facilitator under Dubai World. ethics code The Malaysian-based Association of Sharia Advisors in Islamic Finance (ASAS). plans this year to launch a test for the financial literacy of scholars. after Eid holidays. Emirates Islamic Bank offers consumer finance for new-to-UAE nad newto-job customers Emirates Islamic Bank (EIB).5 billion equivalent multi-currency sukuk issued in July.Saudi Binladin Group (SBG) sells $267m shortterm sukuk SBG one of the largest construction firms in the kingdom. It is the second sukuk program set up by Axiata Group this year following an earlier $1. The sukuk. Islamic finance body plans scholar accreditation.000 and credit cards with one monthly salary limit. they may be reprimanded by ASAS. said legal advisor of the arranging bank.8 billion in the year-earlier. direct debit services.5 percent and is the third such issue from the company. pays a profit rate of 2. SEC bond gains rise 67% than Gulf Sukuk Saudi Electricity Co. Following integration of the Rosoom gateway with DIB 's online payment platform. the statement from Clifford Chance said. Disclaimer: The news included here is on the basis of information obtained from local and international print and electronic media sources. and ask its members to sign up to a code of ethics. to partly retire existing debt and finance capital expenditure. the Islamic banking arm of Emirates NBD Group. buoyed by a scarcity of Shariah-compliant securities in Saudi Arabia and demand for investment -grade debt. which has a total value of up to Malaysian ringgits (RM) 1. The Sukuk range in maturity from three to 10 years. Sources said the bank and issue managers are taking all efforts to open the share offer subscription.3 billion.60b via sukuk Axiata Group Bhd‟s Malaysian unit Celcom Axiata Bhd has raised $1.5b. However.7 billion this year from $3. Fitch assigns Development Bank of Kazakhstan’s Islamic finance programme Fitch Ratings has assigned the Development Bank of Kazakhstan‟s (DBK) Islamic Medium Term Note Programme.‟s (SEC) Islamic bonds returned 67 percent more than Gulf corporate sukuk. which has a 364 days tenor and was sold through the SBG Sukuk Ltd special purpose vehicle. a final rating of „BBB-‟. the electronic payment gateway developed by Dubai Trade.60b via an issuance of Sukuk. the second Sharia-compliant financial institution. the bank is yet to get a final approval from the market watchdog. is to be seen by September. Al Izz Islamic Bank may float IPO The initial public offering (IPO) of Al Izz Islamic Bank. IFP team does not accept any responsibility about their bona-fide. Overall sales of Islamic debt in the Gulf increased to $17.

Citigroup. “BoK is committed to cater the Banking requirements of Islamic Banking as well as conventional in a befitting manner in order to encourage the economic developmental activities in the country through its expanding network of branches. major banks including HSBC. is focusing on poor. Raja said that banking ordinance was introduced in 1974 but tabled in the House in 1984.Islamic banking should be enforced under SC order Islamic banking in Pakistan is being practiced on the basis of supply and demand and not as mandatory by the government. Islamic banking will help draw the funds of rural customers. said President ACCI. which prove success of Riba-free banking. Deutsche Bank and Standard Chartered have Islamic banking branches or windows in Pakistan. Tariq Mehmood. This diploma would be of eight months which would consist of four modules and each module would consist of two courses. Page 9 An initiative of IFP forum . under which the Islamic banking in Pakistan should be mandatory and not the option. said Saleem Ullah. a less sophisticated client base who also traditionally shun conventional banks due to concerns over interest which is forbidden under Islam. bidding to nearly double Islamic banking in the South Asian state by 2015.” Islamic banking growth is impressive Attock Chamber of Commerce and Industry (ACCI) said that growth rate of Islamic banking in Pakistan is v e r y i m p r e s s i v e . 75 countries have recognised Islamic banking. which will be presented through modern online technology concurrently around the world so that the education and awareness regarding Halal food and products could be spread in Muslim and non-Muslim countries with special reference for those countries where Muslims are in minority and they remain tensed about Halal food products. director of the Islamic banking department at the State Bank. conservative villages to drive growth and has ordered Islamic lenders to Disclaimer: The news included here is on the basis of information obtained from local and international print and electronic media sources. held at Korangi Association of Trade and Industry (KATI). Islamic banks urged to explore SME. concepts of Halal and general guidance about Halal food would be taught whereas role of food ingredients and Halal slaughtering in second module. World's first postgraduate diploma on Halal industry launched The world's first postgraduate diploma on Halal industry is going to be launched in Pakistan from November. farm sectors State Bank Governor Yaseen Anwar has said that the Islamic banking has great opportunity to finance projects in agriculture and small and medium enterprise (SME) sectors which are the avenues missed by conventional financial institutions. said. Pakistan targets Islamic finance growth in rural areas Pakistan. The Bank was the sole arranger and structuring bank for this transaction. said Jamiatur Rasheed Education Dire cto r Ab du l A zi z R aj a. SCB arranges $35m Islamic Trade Finance facility for PIA Standard Chartered Bank (SCB) arranged one-year $35 million Islamic Structured Trade Finance facility for Pakistan International Airlines (PIA). prospective of Halal industry world-wide and Halal banking in third module and Halal standardisation and prospective of Halal industry in developed area will be taught in fourth module. Addressing at a seminar on a case study on „A Blend of Contemporary and Religious Education‟. The facility is structured as an offshore transaction under an Islamic mode. Bilal Mustafa. In first module. which uses Ijara concept based on purchase and distribution of airline seats. Mr. Bank of Khyber (BoK) expanded its wings in Islamic Banking with the brand name of BoK Raast Managing Director. open 20 per cent of all new branches i n r u r a l a r e a s . IFP team does not accept any responsibility about their bona-fide.

Pakistan's conventional insurance firms will have to wait a few more weeks to learn if they can open Takaful windows after a state court adjourned a case challenging new regulations for the sector. the Islamic Finance news Pakistan Roadshow 2012 will be held on Tuesday 4th September and will feature prominent players from around the world to share their knowledge and expertise within the Pakistani market. Page 10 An initiative of IFP forum . It may be mentioned here that in consultation with relevant stakeholders. The board. Roadshow 2012 Supported by the State Bank of Pakistan. The President FPCCI assured his full support for the executions of plans made by the committee.SECP to support Islamic finance summit The Securities and Exchange Commission of Pakistan (SECP) said it was firm to support the second World Islamic Finance Summit (WIFS). as the SECP talks about the expanding footprints of Islamic funds and investment and its aspiration to promote and develop a financially strong and transparent Islamic financial market in Pakistan. which is scheduled for September 12-13 in Karachi. 2012 approved the half yearly financial statements of the Bank for the six months ended June 30.04 on enhanced share capital of Rs 9b. the SECP has drafted a comprehensive three-year Capital Market Development Plan (2012-14). The meeting was attended by almost all members of the committee. comprising eminent Islamic scholars and market professionals. Disclaimer: The news included here is on the basis of information obtained from local and international print and electronic media sources. a global payments and technology company. Mehmood Arshad. Takaful operators filed a petition in a court in the province of Sindh to protest the rules which allow conventional insurers to offer Takaful services. the Securities and Exchange Commission of Pakistan (SECP) is contemplating the establishment of a Shariah board. The Bank not only maintained its impressive pay-out track record but improved upon it by approving a 15% interim cash dividend – 50% higher than last year‟s interim cash dividend. SECP may set up Shariah board to develop Islamic capital market For developing an Islamic capital market in line with best practices globally. First Islamic Master card / debit card launched Burj Bank in association with MasterCard. products and services in order to deepen the capital market. an official said.compliant institutions. IFP team does not accept any responsibility about their bona-fide. The Bank recorded 34% growth in its Profit-after-tax and EPS of the Bank was recorded at Rs. The industry leaders at the summit will learn the perspectives of the regulator. He was speaking at the second meeting of FPCCI‟s Standing Committee on “Islamic Banking & Takaful” which was held under the Chairmanship of Mr. The Islamic Finance news Pakistan. Pakistan's Islamic insurance rules in limbo after court hearing Islamic banking. 2012. Meezan Bank profit after tax grows by 34%. declares interim cash dividend of 15% The Board of Directors of Meezan Bank Limited. Takaful discussed at federal chamber Sherani said that the FPCCI will play its role in creating awareness about Islamic Banking and Takaful in the business community and will support every effort which can rid the Pakistan from the curse of the Interest based financial System.” the official said. 2. would ensure that all the products/ services offered under this umbrella are in conformity with the Shariah principles. announced the launch of Pakistan‟s first Islamic MasterCard debit card that is designed to benefit customers who prefer better control over their expenditure. “Also. in its meeting held at Karachi on August 12. efforts will be made for consolidation of existing Islamic institutions and development of innovative Shariah.

Presently he is the Vice-president of Darul-Uloom. he graduated par excellence form Dars e Nizami at Darul Uloom. as About the Author Mufti Muhammad Taqi Usmani is one of the leading Islamic scholars living today. He also holds a degree in law and was a Judge at the Sharia Appellate Bench of the Supreme Court of Pakistan. he has been teaching hadith and Fiqh at the Darul-Uloom. Karachi. He is an expert in the fields of Islamic Jurisprudence.B. Mufti Muhammad Shafi. Then he specialized in Islamic Jurisprudence under the guidance of his eminent father. Karachi. He has been writing on various Islamic topics and is author of more than 60 books and numerous articles. but on the other hand also depicts the importance of work and earn income within the prescribed Shariah limits.H) and the ongoing list of the followers. and this being the very first good and bad intentions may render economical benefits impermissible for a Muslim. Published by: Idarat ul Islami. Since then.U.H) and the evil practices involved in it today. Pakistan. The first article is about unwanted human attachment with fame and money. Some of them were published separately.U. Pakistan.B. the late Grand Mufti of Pakistan. of the whole compilation the compiler came up with the articles which were intended for ethical and moral building of the reader. Fiqh and Islamic economics. Economics. Page 11 An initiative of IFP forum . Born in Deoband in 1362H(1943 CE). where he teaches Sahih Bukhari. Karachi. The preamble is followed by compiler‟s views about the contents of the book and his inspiration and respect for the original author. He even writes the virtue of trading as it was also sunnat of the Prophet (P. The book starts with a preamble written by Mufti Mahmood Ashraf (who is also a very senior member of the Darulifta Jamia Daruloom Khi) in which he describes the importance of innovational research in the field of various aspects of a Muslim‟s life regarding Shariah rulings which also includes Islamic economic system. Hadith and Tasawwuf. Karachi. and they also include examples from the lives of the companions of the Holy Prophet (P. while others were a part of his other independent books (the source of the article is mentioned on the title of each chapter). and he further sheds light on the author and his publications. The book generally describes the economical values for Muslim ummah. All of his discussions are supported with Quranic verses and Hadiths with their translations and understandings.Book in the Spotlight Islam Aur Jadeed Ma’ashi Masa’il By Justice Mufti Muhammad Taqi Usmani Reviewed by Mufti Haseeb Ahmed This book is the first volume of the 8 volume set that is a compilation of different articles written by Mufti Muhammad Taqi Usmani.

the rental will continue to be due in respect of the remaining period of the Ijarah and the lessor may not lease the property to another lessee for this period.Ask Us By Mufti Ibrahim Essa and Mufti Javed Ahmed Question: In a deferred sale contract. However. but must keep it at the disposal of the current lessee. Question: In an Ijarah transaction. This is because the legal effect of a sale contract is the transfer of ownership of the asset sold. a right to retain an asset sold on a deferred basis. after conclusion of a sale contract. is it permissible to charge him the remaining rentals of that period where the leased asset was not used by the lessee? Moreover. it is permissible for the seller to stipulate that the buyer should release the sold asset into the seller‟s custody as pledge of security so as to ensure recovery of the remaining deferred installments. if the lessee stops using the leased asset or returns it to the asset before the term expires. can the lessor lease that asset to another person for that period? Answer: If the lessee stops using the leased or returns it to the owner without the owner‟s consent. as security for payment. Page 12 An initiative of IFP forum . is it permissible to stipulate a condition that the seller will retain the subjectmatter into his ownership until the full payment of the price? Answer: A seller is not allowed to stipulate. It is also permissible for the buyer to retain an asset sold on an immediate payment basis until the consideration for the asset is paid.

179 20.452 74 569 69 99 539 529 20.459 539.239 1.923 8. other banks 2.231 15.736 61.029 1.151 Statement of Financial Position “IBIs and IBDs analysis was reported in previous issues separately.780 11.224 2.870 5.Financial summary of the Islamic banks for the year 2011 Amount in Rs.389 10 251.714 5.818 3.937 9.648 2.032 4.560 21 252.414 4.816 44.945 7.236 14.508 370. An initiative of IFP forum Page 13 .464 264.266 3.072 4.492 20.41 20.610 5.939 280 11.209 510.537 6.312 1.059 10.591 58.370 193. institutions Deposits and 6.306 1.312 37.032 5.300 4.519 169.878 805 488 6.172 16.746 25.423 1.045 10.249 1.550 27.4 billion in FY 2011.570 12.620 253.169 1. Provisions Net spread after 12.632 570.977 2.653 549 528 494 531 174 1.375 8.312 55.509 200. Previously SCB was reported as the highest profit before taxation among all the IBDs with a profit of 1.810 1.956 11.770 3.356 628 186 1.214 365 506 43 240 309 1. income 7.753 26.606 4.110 140.766 723. Total liabilities 186.755 1.037 919 1. millions Islamic banking division AIB 7.784 17. Administrative / Profit / (Loss) 15.368 831 78 559 59 520 98 128 372 41 90 424 492 459 826 29 16 503 23 396 130 569 394 598 438 30 187 41 216 12 5.753 574 1.542 462 798 1.227 700.568 340.112 Profit on 9.086 1. provisions Total other 13.927 12.569 371 18.970 21.215 2. Islamic Banking Institutions BIPL Total ABL BAHL BOK FBL UBL BAFL HBL MCB SBL SCB HMB NBP Total Grand total 24.633 2. “The analysis of IBDs is reported again with the inclusion of Bank Al Falah Limited (BAFL) which was not included in the previous issue as its financial data was not available.786 5.705 18. They are being reported together again in this issue to p rovide a comparison between them”. Investments 98.682 10.192 124 1.644 9.534 14.274 1.094 5.611 1.974 521 934 5.925 482 1.252 60 170 4 103 71 993 7.026 1.764 14.504 457 188.062 4.580 11.559 53.734 11.005 4.359 3.587 4.613 12.383 131.348 1.990 800 460. Financings 59.811 Description MBL DIB Burj Bank Balances with 1.041 7.341 2. The increase in profit of BAFL is 16% compared to SCB in the FY 2011.105 14.812 18.502 1.362 7.422 979 37 406 115 344 176 398 354 157 -113 145 166 (147) 2.067 168.998 28.764 21. other accounts 170. Total assets Due to financial 5.303 87.231 1. deposits 18.597 715.745 141 10.557 1.180 31.192 7.446 1.739 13.847 8.356 316 (346) 3.939 607 5.642 3.791 6. The newsletters management does not take any responsibility of authenticity of any data presented here and will not assume any liability due to any loss or damage caused by the usage of the information presented here.842 14.036.843 17 0.206 2. Net assets 13.488 12.117 2.335 6.051 1.658 95. before taxation Profit / (Loss) 16.725 58.821 407.699 372.235 1.840 8.396 1. Detailed comparative analysis of the IBDs was covered in our previous issue of July 2012”.021 464.491 42.834 2.2 billion whereas now with the inclusion of BAFL it is the leading IBD with a profit of 1.095 1.899 447.215 226 192.319 12. User discretion advised.112 480 410 409 608 2.447 10.206 2.723 5.773 2.030 38. 14.806 9.665 2.011 200.812 4.125 1.577 13.430 2.2 billion and SCB net assets are of 3 billion.117 595 8.926 13.155 10.896 1.982 3.660 50.155 80.346 40 2. financings Return on 10.652 8.804 Statement of Comprehensive Income 6.469 185.218 252 2.922 1.747 2.391 190 (288) Disclaimer: The data presented in this summary is extracted from the published audited financial statements of the respective banks for the year ended 31 December 2011.924 10.977 8.001 (227) 1. after taxation 4. BAFL net assets are of 6.883 5.

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