In just a decade, Islamic banking has grown from less than a third of the GCC banking market to account for 45 percent or nearly half of the sector, according to analysis by ratings agency Moody’s.
Growth in the Islamic finance sector will continue to outstrip that of conventional assets in coming years, as demand for Shari'ah-compliant financial instruments rises,” Nitish Bhojnagarwala, vice president and senior analyst, Moody's said during a briefing yesterday on key finance sectors in region.
"The Islamic finance sector will be supported by governments, whose objective is to grow the Islamic finance industry both domestically and globally, as well as by continued demand for Islamic products from individuals. Islamic insurers' penetration into Southeast Asia and North Africa will also drive growth in the industry," he said.
Annual sukuk issuances have more than doubled to $100 billion from $42 billion from 2008 until September 2017. Moody's expects a similar level of activity in 2018, although the recent recovery in oil prices “could lower financing needs for some sovereigns,” said Bhojnagarwala.
"Globally, Saudi Arabia remains the largest market for Islamic finance overall, with lslamic financing assets worth US$292 billion as of September 2017, while Oman is the fastest-growing Islamic banking market, logging a growth rate of 20% in the first nine months of 2017. This rapid growth is being driven largely by the country's late entry into Islamic banking," he added.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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