Strong Signs of Growth for Islamic Banking: The Continued Expansion of the Islamic Banking Sector Is One of the Biggest Trends in the Global Banking Industry. Competition over the Provision of Shariah-Compliant Financing Is Intensifying across the Middle East and North Africa, While the Market Is Also Taking off in a Much Wider Range of Countries Further Afield

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Banks are keen to offer Islamic products to Muslim customers, while fears over a repeat of the global financial crisis and growing interest in ethical banking are making the sector a more attractive proposition for non-Muslim customers as well. The raw data certainly paints a picture of an expanding industry.

The global Islamic banking sector already boasts $815 billion in assets and is expected to break the one-trillion-dollars barrier within the next two years. A study by The Banker revealed that 43% of global Islamic banking assets were held in the Gulf Cooperation Council (GCC) states. The two biggest markets for Islamic banking in the region are Saudi Arabia and the UAE, which account for 27.4% and 27% respectively of all Islamic banking assets within the GCC states.

A report published by Kuwait Finance House Research Ltd in September revealed that Islamic banking now accounts for 16.6% of all banking assets within the GCC region, and a massive 34.3% in Kuwait itself, followed by 19.3% in Qatar, 15.9% in Saudi Arabia and 14% in the UAE. The biggest Islamic banks in the region are Saudi Arabia's Al Rajhi Bank and Kuwait Finance House, with assets of $46 billion and $40 billion respectively at the end of March 2010.

The global sukuk market stood at just $7.6 billion in 2009 but this grew rapidly to $16.5 billion during just the first six months of 2010, suggesting a full year figure of more than $30 billion. Neil Miller, head of Islamic finance at law firm Norton Rose, told journalists: "We've closed three sukuk in the past four months and are pitching several other billion-dollar sukuk deals. The practice is alive and well and will come back, but it's linked to the magic word 'confidence'." This mood of confidence appears to be underpinned by strong …

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Publication information: Article title: Strong Signs of Growth for Islamic Banking: The Continued Expansion of the Islamic Banking Sector Is One of the Biggest Trends in the Global Banking Industry. Competition over the Provision of Shariah-Compliant Financing Is Intensifying across the Middle East and North Africa, While the Market Is Also Taking off in a Much Wider Range of Countries Further Afield. Contributors: Not available. Magazine title: The Middle East. Issue: 416 Publication date: November 2010. Page number: 27+. © 2009 IC Publications Ltd. COPYRIGHT 2010 Gale Group.

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