The total assets of Islamic financial institutions will cross the $2 trillion mark by the end of the next year, a major milestone in the history of this segment of the global economy according to an expert.
“The future course of Islamic finance will not be decided on numbers but on the health of these institutions,” Ashar Nazim, Partner, Head of Islamic Banking Excellence Center, Ernst & Young told a media briefing on Tuesday.
He was speaking during the Press conference held by the organizers of the annual World Islamic Banking Conference (WIBC 2013) to announce the launch of the 20th anniversary special edition of the event which is scheduled to be held in Bahrain from December 3rd 5th this year.
Talking about the growth in Sukuk market, Nazim said the total size of sukuk was $5 billion in 2003 and in ten years it reached $85 billion in the first three quarters this year while the 2012 was closed at $134 billion.
“Twenty years ago when Ernst & Young was the only partner with World Islamic Banking Conference (WIBC), the question was whether we stay or not, and down the road after two decades the question of staying has been answered. Now these many challenges and opportunities,” he added.
“The ongoing rebalancing of the world economy means that a group of 25 Rapid Growth Markets (RGMs) will decisively dominate the GDP growth and the trade flows between now and 2020. The future success of Islamic finance hinges upon being embedded in these markets,” Asher added.
“Previously, questions were asked on the quality of growth of Islamic banking. Growing balance sheets did not necessarily translate into better profitability or robust institutions. And with quick wins behind us, most Islamic banks agree that future incremental growth in key markets of GCC and Malaysia will only come from embracing technology and being more analytical about serving customers. Regional growth is also on the board agendas. And the debate on creating holistic Halal economy – though still a concept at this stage – provides for an exciting future for the industry.”
“It is in this backdrop of evolving business structures and strategies that the EY World Islamic Banking Competitiveness Report (2013/14) takes a deeper look at some of the underlying trends and transformational approaches at leading and start-up Islamic banks”, he added.