Millennium Post

‘Islamic banking assets will cross $778 bn in 2014: EY

Global Islamic banking assets witnessed a compound annual growth rate (CAGR) of around 17 per cent from 2009 to 2013, according to Ernst and Young's World Islamic Banking Competitiveness Report 2014-15. Approximately, 95 per cent of international Islamic banking assets of commercial banks are based out of nine core markets, five of which are in the GCC (Saudi Arabia, UAE, Qatar, Kuwait and Bahrain). The market share of Islamic banking assets in Saudi Arabia, UAE, Qatar, Kuwait, Bahrain and Malaysia is now between 20 per cent and 49 per cent. The analysis excludes Iran. Islamic banks in Saudi Arabia, Kuwait and Bahrain represent more than 48.9 per cent, 44.6 per cent and 27.7 per cent market share respectively.

Positive progress has been has made in Indonesia, Pakistan and Turkey, with 43.5 per cent, 22 per cent and 18.7 per cent CAGR respectively from 2009 to 2013. Gordon Bennie, MENA Financial Services Leader at EY, said that the six rapid-growth markets (RGMs) — Qatar, Indonesia, Saudi Arabia, Malaysia, UAE and Turkey (QISMUT) — commanded 80 per cent of the international Islamic banking assets at USD 625 billion in 2013.

"QISMUT Islamic banking assets are expected to continue to grow at a five-year CAGR of 19 per cent to reach $1.8 trillion by 2019," Bennie said.

"The Islamic banking industry has gone mainstream in several core markets. This presents new opportunities as well as new challenges, and demands a fundamentally different approach to profitable growth. Customers have mixed emotions about their experiences of dealing with Islamic banks," Ashar Nazim, Global Islamic Finance Leader at EY, said.
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