We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Fri 6 Nov 2009 12:24 PM

Font Size

- Aa +

Islamic bank assets up 29% - survey

Islamic banks attracted more assets than conventional banks in 2009 on conservative approach.

Islamic banks have attracted more assets than conventional banks in 2009 due to a more conservative approach to risk, according to a survey on Thursday from The Banker Magazine and a unit of HSBC.The survey found assets held by Islamic banks or sharia-banking arms of conventional banks rose 29 percent this year to $822bn.

A similar survey by The Banker on "Top 1,000 World Bank Rankings" in July found annual asset growth at conventional banks of 6.8 percent.

While Iranian banks accounted for about 36 percent of total assets, Gulf banks, led by Al Rahji Bank of Saudi Arabia, are making their mark in the top 10 Islamic banks by assets.

The Gulf states account for 43 percent or $353 billion of the total global aggregate. Despite the growth, the sharia-compliant aggregate asset total is less than 1 percent of the Top 1,000 World Banks aggregate asset total.

Vishnu Kant, senior analyst at Sico Bank in Bahrain said: "In the Gulf, Islamic banks will continue to do well. But in the long term, they will face tough competition from conventional banks as the global uncertainty gradually declines".

David Dew, deputy chief excutive officer of HSBC Amanah said: "It is important that the Islamic finance industry continues to analyse its growth critically if it is to become a truly credible alternative to conventional banking in a significant number of markets".

Assets held by Islamic financial institutions are forecast to hit $1.033 trillion in 2010 according to HSBC Amanah and The Banker. (Reuters)

Arabian Business: why we're going behind a paywall

For all the latest UAE 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.