São Paulo – Islamic assets handled by commercial banks are poised to exceed US$ 778 billion in 2014. The information was culled from the World Islamic Banking Competitiveness Report 2014-15: Participation Banking 2.0 by Ernst & Young (EY), released this Tuesday (2nd). The report does not include Iran.
According to the report, roughly 95% of international Islamic assets with commercial banks are primarily in nine markets, five of which are members of the Gulf Cooperation Council (Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Bahrain). In Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and Malaysia, these assets account for market shares ranging from 20% to 49%. The rates are 48.9% in Saudi, 44.6% in Kuwait and 27.7% in Bahrain.
“The six rapid-growth markets (Qatar, Indonesia, Saudi Arabia, Malaysia, UAE and Turkey) (QISMUT) — commanded 80% of the international Islamic banking assets at $625 billion in 2013. QISMUT Islamic banking assets are expected to continue to grow at a five-year CAGR {compound annual growth rate) of 19% to reach US$ 1.8 trillion by 2019,” said Gordon Bennie, said E&Y’s Middle East and North Africa Financial Services leader, according to a press release from the company.
According to the E&Y survey, Saudi Arabia and Malaysia, alongside Turkey and Indonesia, will lead the way in Islamic banking. “They key driving markets for Islamic banking will for Islamic banking will continue to be Saudi Arabia and Malaysia, with Turkey and Indonesia also establishing themselves as large Islamic banking centres,” said E&Y Global Islamic Finance Leader Ashar Nazim.
Islamic banks have a few specific rules, in accordance with the Sharia, i.e. Islamic law. These rules differ from those that govern traditional banks in that interest and speculation are prohibited.
*Translated by Gabriel Pomerancblum
