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GLOBAL:
Attributed to the growing economic activity in core Islamic finance
markets, EY expects global Islamic banking assets to exceed US$3.4
trillion by the year 2018.
According to analysts at EY’s Global Islamic Banking Center, combined
profits of Islamic banks in Qatar, Indonesia, Saudi Arabia, Malaysia, the
UAE and Turkey hit the US$10 billion mark for the first time at the end
of 2013. Should the current growth rate remain, the Islamic banking
profit pool across these markets is set to exceed US$25 billion by 2018.
Commenting on the profit statistics, Ashar Nazim, the global Islamic
finance leader at EY, pointed out: “While the profit numbers for Islamic
banks are impressive, they are still, on average, 15-19 percentage points
lower than traditional banks in these markets. Regionalization and
operational transformation, which are currently underway in several
leading Islamic banks, will help to close this gap.”
“With increasing trade and capital flows between Turkey, Middle East and
Asia Pacific, there is growing appetite to learn about Islamic financial
solutions from clients and investors in these markets. Similarly, linking
with world growth engines like China and India is becoming more important
to help build business bridges between these high potential markets,”
added Gordon Bennie, EY's MENA head of financial services.
Out of the 38 million customers banking with Islamic retail banks
globally, only a small number have fully transitioned from a traditional
to an Islamic banking relationship. Based on EY’s estimates, the average
number of Islamic banking products per customer is just over two, whereas
leading traditional banks have an average of five products per customer.
The market share of Islamic banks could potentially increase by 40%
through building consumer confidence through services provided by banks
as well as tapping into the SME sector by assisting their cross-border
business growth.
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