Islamic finance assets grew by 10 percent to reach $2 trillion in 2015, according to a new report by Thomson Reuters.
Islamic banking represented 73 percent of these asset, followed by sukuk which represented 17 percent, said the initial findings of ICD Thomson Reuters Islamic Finance Development Indicator (IFDI 2016).
The increase in assets was driven by strong growth in all sectors - Islamic banking, takaful, outstanding sukuk and net value of Islamic funds.
According to Thomson Reuters' projections, Islamic finance assets are projected to grow to $3.2 trillion by 2020, with Islamic banking reaching $2.6 trillion.
It said Saudi Arabia, Iran and Malaysia lead Islamic banking by holding almost 65 percent of global Islamic assets in 2015, reflecting significant concentration within the top three countries.
The report added that the sukuk market on the other hand has struggled in the past couple of years due to the global economic uncertainty which has caused the dearth of new players.
The sukuk market dropped significantly to $66 billion in 2015 from $101.8 billion the previous year, a performance that was not anticipated by market players after ending 2014 on a strong note.
In 2016, the sukuk market continued to struggle as a number of issuers have shifted to the bonds market for raising liquidity. However, in the past couple of months the sukuk market has become somewhat active, on the back of recent issuances from Malaysia and Turkey, the report said.
It added that as of July, the sukuk market has relatively picked up to stand at $38.7 billion, although remains slightly below 2015 levels of $40.9 billion. Total issuance is expected to be around $70 billion by end of 2016.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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