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Global Islamic Finance Market Growth, Trends, and Forecast (2018 - 2024)

The Global Islamic Finance Market is growing moderately, because of the strong investments in the Halal Sectors, Infrastructure, and Sukuk bonds, especially through electronic modes in all products and services. The market is segmented by Regions and Financial modes (GCC, Middle East & North Africa (MENA) except GCC, Southeast Asia and Asia-Pacific, Europe, the Americas, and Islamic Banking, Sukuk, Takaful, and Islamic Funds).

Market Snapshot

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Study Period:

2016-2024

Base Year:

2018

Fastest Growing Market:

Middle East and North Africa

Largest Market:

Middle East and North Africa

Key Players:

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Market Overview

The global Islamic finance market is growing moderately, because of the strong investments in the Halal Sectors, infrastructure, and Sukuk bonds, especially through electronic modes in all products and services. The factors driving the growth of the market are directing investment toward the tremendous growth opportunities in the promising Islamic sectors. The industry’s total worth, according to key industry stakeholder organizations, across its three main sectors (banking, capital markets, and TAKĀFUL), was estimated to be USD 2.05 trillion in 2017, marking an 8% growth in assets in USD terms, and reversing the preceding two years of assets’ growth stagnation (2017: USD 1.89 trillion vs. 2016: USD 1.88 trillion).  

Global SUKUK outstanding surged by a record 25.6% to close at USD 399.9 billion as at end 2017 [2016: USD 318.5 billion], as per industry sources, on the back of strong sovereign and multilateral issuances in key Islamic Finance markets to support respective budgetary expenditures. This included debut entries into the sovereign SUKUK market by Saudi Arabia and Nigeria, as well as the pan-African multilateral development finance institution, Africa Finance Corporation. 

 

Scope of the Report

The global Islamic banking market covers different aspects, like Islamic Banking, Takaful: Islamic Insurance, Sukuk: Islamic Bonds, and Shariah Capital Market: Islamic funds.

SEGMENTATION - BY FINANCIAL MODES
Islamic Banking
Islamic Insurance : Takaful
Islamic Bonds
Islamic Funds : Equities and Other Instruments
GEOGRAPHY
GCC
Saudi Arabia
United Arab Emirates
Qatar
Kuwait
Bahrain
Oman
Middle East & North Africa (MENA) ex GCC
Iran
Egypt
Rest of Middle East & North Africa
Southeast Asia and Asia-Pacific
Malaysia
Indonesia
Brunei
Pakistan
Rest of Southeast Asia and Asia-Pacific
Europe
United Kingdom
Ireland
Italy
Luxembourg
Americas
United States

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Key Market Trends

Islamic Banking is the Largest Segment

Islamic banking is the largest sector in the Islamic finance industry, contributing to 71%, or USD 1.72 trillion, of the industry’s assets. The sector is supported by an array of commercial, wholesale, and other types of banks. Yet commercial banking remains the main contributor to the sector’s growth. There were 505 Islamic banks in 2017, including 207 Islamic Banking windows. However, the number of players is not necessarily indicative of the size of the industry, in terms of assets. Islamic finance’s second-largest market, Saudi Arabia, has 16 Islamic banks, including windows, which is less than the smaller markets of Malaysia and the United Arab Emirates.

With the rapidly growing popularity of mobile banking, particularly among younger people, according to PwC’s 2018 Digital Banking Consumer Survey, a growing number of digital-only, or ‘disruptor banks’ with no physical branches, have emerged. Islamic banks are also catching up on this trend, with the launch of digital-only subsidiaries, such as Gulf International Bank’s Meem in Bahrain and Saudi Arabia, and Albaraka Türk‘s insha in Germany and other European countries with large Muslim communities.

Islamic banking is commonly seen to have two advantages over conventional banking. The first is a perception that Islamic banks are bound to a higher moral standard. They will not take on irresponsible amounts of risk or pay outsize bonuses to their top bankers. The second is that earnings come from identifiable assets, not opaque combinations of derivatives and securities. Because Islamic banks cannot make money through interest, they rely on ties to tangible assets, such as real estate and equity, charging ‘rent’ instead of interest.

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GCC Regional Overview

Shariah-compliant assets represent a significant portion of total banking assets of the GCC. While in the Middle East & North African (MENA) region, Islamic Banking assets represent 14% of total banking assets. In the GCC, the market share of Islamic banking crossed the 25% threshold, which suggests that Islamic banks have become systemically important in these countries.

GCC Islamic banking assets reached USD 490 billion by the end of June 2013, with Saudi Arabia dominating the region with a 49% share, followed by the United Arab Emirates (19%), Kuwait (16%), Qatar (11%), and Bahrain (5%). This segment is still nascent in Oman (Islamic Financial Services Board (IFSB), (2015)). Islamic banking has acquired systemic proportions in Kuwait, Saudi Arabia, and the United Arab Emirates, in line with IFSB’s definition of systemic, at least 15% of banking system assets. Retail Islamic banking in Bahrain has reached systemic proportions with a 27% asset share in retail banking, and a 13% asset share in total retail and wholesale banking. Oman’s entry in Islamic Banking was in late 2012.

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Competitive Landscape

The global Islamic finance market is fragmented with a large number of players trying to grab a significant chunk of the developing market. In some regions, like Asia and Africa, it is moderately growing with the presence of a large number of local players and some major players. However, GCC is a highly competitive market, with the presence of large number of international players. Bank Al-Rajhi, Dubai Islamic Bank, and Kuwait House Finance, are among the major players present in the region.

Major Players

  1. Dubai Islamic Bank
  2. bank Mellat Iran
  3. Bank Melli Iran
  4. Kuwait Finance House
  5. National Commercial Bank Saudi Arabia

* Complete list of players covered available in the table of contents below

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Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Overview

    2. 4.2 Drivers

    3. 4.3 Restraints

    4. 4.4 Opportunities

    5. 4.5 Porter's Five Forces Analysis

    6. 4.6 Industry Value Chain Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 SEGMENTATION - BY FINANCIAL MODES

      1. 5.1.1 Islamic Banking

      2. 5.1.2 Islamic Insurance : Takaful

      3. 5.1.3 Islamic Bonds

      4. 5.1.4 Islamic Funds : Equities and Other Instruments

    2. 5.2 GEOGRAPHY

      1. 5.2.1 GCC

        1. 5.2.1.1 Saudi Arabia

        2. 5.2.1.2 United Arab Emirates

        3. 5.2.1.3 Qatar

        4. 5.2.1.4 Kuwait

        5. 5.2.1.5 Bahrain

        6. 5.2.1.6 Oman

      2. 5.2.2 Middle East & North Africa (MENA) ex GCC

        1. 5.2.2.1 Iran

        2. 5.2.2.2 Egypt

        3. 5.2.2.3 Rest of Middle East & North Africa

      3. 5.2.3 Southeast Asia and Asia-Pacific

        1. 5.2.3.1 Malaysia

        2. 5.2.3.2 Indonesia

        3. 5.2.3.3 Brunei

        4. 5.2.3.4 Pakistan

        5. 5.2.3.5 Rest of Southeast Asia and Asia-Pacific

      4. 5.2.4 Europe

        1. 5.2.4.1 United Kingdom

        2. 5.2.4.2 Ireland

        3. 5.2.4.3 Italy

        4. 5.2.4.4 Luxembourg

      5. 5.2.5 Americas

        1. 5.2.5.1 United States

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Dubai Islamic Bank

      2. 6.1.2 National Commercial Bank Saudi Arabia

      3. 6.1.3 Bank Mellat Iran

      4. 6.1.4 Bank Melli Iran

      5. 6.1.5 Kuwait Finance House

      6. 6.1.6 Bank Saderat Iran

      7. 6.1.7 Malayan Bank Berhad (Maybank) Malaysia

      8. 6.1.8 Bank Maskan Iran

      9. 6.1.9 Qatar Islamic Bank

      10. 6.1.10 Alinma Bank Saudi Arabia

    2. *List Not Exhaustive
    3. 6.2 Mergers and Acquisitions

    4. 6.3 Investment Outlook

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. REGULATORY FRAMEWORK OF ISLAMIC FINANCE

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