Islamic financing will continue to outperform its conventional counterpart in GCC countries, riding on the rising demand for Sharia-compliant products, Moody’s Rating said.
The global rating agency also predicted further growth for Islamic financing in the region through mergers, as the sector seeks to enhance revenue generation and reduce costs.
“Profitability of Islamic banks in GCC countries will remain strong over the next 12 to 18 months, thanks to robust commercial activity driven by government efforts to diversify economies across the region,” Moody’s Rating said in its latest report.
Moody’s highlighted that Islamic banks in GCC countries will continue to maintain strong capital and liquidity, enabling them to capitalise on the growing demand for Sharia-compliant financial services in the Gulf region.
The agency expected non-oil economic growth in GCC countries to remain strong in 2025, thanks to ambitious government economic diversification plans and strong business confidence.
Badis Shubailat, Assistant Vice President and Analyst at Moody’s said sustained economic growth, government commitment to bolstering the broader Islamic finance industry, and increasing demand for Sharia-compliant products in the GCC region will continue to drive Islamic finance growth, which will outpace its conventional peers.
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