Islamic Bank assets to hit $1.8trn in 2013

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By BLAISE UDUNZE

Global Islamic banking assets are expected to cross the $1.8 trillion mark in 2013 up from $1.3 trillion in 2011. This was made available by Ernst & Young’s in its World Islamic Banking Competitiveness Report 2013. According to E&Y’s report, the Islamic banking industry continues to record robust growth, with the top 20 Islamic banks registering a growth of 16per cent in the last three years.

It was reported that Nigeria’s first licensed Islamic bank, Jaiz International Bank has continued to record robust growth as it aims to raise N12billion of the targeted capital base. Saudi Arabia has the largest market of the world’s Islamic banking assets.

According to the report, the Islamic banking industry in Saudi Arabia – with an estimated $207 billion of Islamic assets – was ranked first in 2011 followed by Malaysia with total assets of $106 billion and UAE third with total assets of $75 billion.

The form of banking is also growing in new markets such as Indonesia, Egypt, Iraq and Libya and E&Y noted that South Africa has made significant strides in the inclusion of Islamic Finance into its tax legislation with the relevant amendments expected to be effective from 2013. Across Africa, E&Y says the need for government Islamic Bond (Sukuks) has become more pronounced as in some instances banks are required to hold a certain percentage of interest bearing instruments. Islamic banks are prohibited from gaining from the yields that interest bearing instruments produce and consequently any interest received.

The obvious challenge remains around ensuring that a proper regulatory framework exists to facilitate both sovereign Sukuks and corporate Sukuks, noted the report. “The market currently has great interest in the sovereign Sukuk.

Sukuks are seen to be attractive as a result of the foreign direct investment (FDI) that it would attract particularly from the Middle East where investors will seek Shariah compliant instruments”, says Emilio Pera, Financial Services Leader at Ernst & Young. “Islamic finance continues to provide significant opportunities in Africa with Africa being home to more than 400 million Muslims.

With the majority of the Muslim community being unbanked together with the need to attract foreign investment from Gulf Cooperation Council (GCC) countries who seek Shariah compliant investments, the market appetite for these products continues to grow,” says Merisha Kassie, Director in Financial Services at Ernst & Young.

The strong global market growth forecast as outlined in the report, and the surge of activity in Africa with respect to the proposed issuance of sovereign Sukuks in South Africa and other African countries support the growing momentum of Islamic Banking in Africa.

Despite the projected asset growth and the introduction of new Islamic initiatives in a number of countries, E&Y observes that profitability continues to lag behind but with the implementation of transformation agendas over the next two to three years, Islamic banks will close the performance gap that currently exists with the overall banking industry.

According to Ernst & Young’s report, successful transformation could see the profit pool of Islamic banks rise by an additional 25per cent by 2015.

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11 Comments

  1. My friend go and sit down, whom are you kidding for? A bank that was inauguratied yesterday to hit such amount of money isn,t it? My friend just say the truth, it was amount garnered from Saudi Arabia and Osama bin Laden outfit in the Parsian Gulf. How many Arabs/Islamic depositors are into merchandise? Pls keep quiet, mr emire/CBN.

    • @ owerri,you are the one that is a fool-whether u like it or nt islamic banking has come to stay in Nigeria-just as islam is the fastest growin religion on the planet,thats hw islamic banking will continue to grow

  2. Sanusi, you have come again with the issue of this your Islamic Banking. Even if the bank grows at the rate of 100% , Nigerians are not interested. No matter your scheming for this Isamic bank in this our secular state, it will not work because you have a hidden agenda on it. So don’t waste your brain on this issue

    • @Ninyio, This report came from Ernst & Young and not CBN. Also, note that Islamic banking will not in any way undermine Nigeria’s secular state status. South Africa with probably about 97% (if not more) christian population has adopted Islamic banking. Care to ask why??

  3. @Arise. Beautiful , one wouldn’t have borthered if our Nigerian Muslim are that civilized that those places you mentioed, embrace the spirit of peaceful living, not being too fanatical and imbibe the spirit of co existance with their non Muslim, nobody will be suspicious of any of such move, that is all am trying to say my brother

  4. How come this increment if it is not profit oriented Banking concern ? Tell us how far your Kitchen Bank the CBN has erred? 2014 holds the four Aces for these ungodly deceits from religious bigots like Mallam Sanusi and his cohorts.

  5. some people ar just fool.religious mentality has enta dia brain.they dont want to hear anytn about islam.sit down dia n try to argue n condem.what wl b wl b but it is beta for u to seek knowledge about what u dont know.

  6. Islam is not the fastest religion in the world in terms of conversion of people, but it is the fasted growing religion in terms of breeding babies like pigs who turn out to be terrorists/bokoharam/almajiri. This is what is called biological increase(birth). Christianity is the hub for convertion of other religions including islam. In nig b4 1920 the whole of nigeria is majorly pagans and islam(mostly in the north and west). An average yoruba christian was not just a pagan but a muslim convert. Here in nigeria, apart from sok, zamf, kn, jigawa, kat, other states in the north can boast of 20%-85% christians. Taraba, adamawa, benue, plat have 60 -85% christian. Kogi, kd, kw, nasarawa are 50/50 or slighly higher christian. Pls count the igbos out from islam because it will be a course to us. We are created and giving the greatest grace by God to know Jesus. I pray they they will hold on him firm. He is our wisdom.

  7. Emeka my bros na good talk you talk.Dont mind those uncircumcised,gworo chewing,fool that calls himself mallam sanusi and his illitrate and blocked head muslim brothers he deceived by making them to believe that there is anything like islamic bank but they dont know that the man mallam sanusi have been playing on their intelligent by enmassing the muslims wealth and made believe that he has introduced islamic bank for them hahahahaha.As far as we Christians who are more populated in Nigeria are concern we will never all anybody,not even a muslim president of Nigeria to introduce islamic bank in Nigeria because if anybody dares head will role.Muslims you people are the worst human fools i have never witnessed in this world by allowing that smart fool that calls himself mallam sanusi to play on your brains

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