islamic finance bulletin march 2016 - wordpress.com...islamic financial institutions, such as banks...

Center of Research Excellence for Islamic Banking and Finance

Islamic Finance Bulletin March 2016

Sponsor

College of Industrial Management

Research Partner

To start a new section, hold down the apple+shift keys and click

to release this object and type the section title in the box below.

Contents

1. Introduction 1

2. Sukuk 5Sukuk vs. Bonds Issuance 5

Number of Sukuk Issued 7

Total Sukuk Issued 8

Domestic vs. International Sukuk Issued 10

Corporate vs. Sovereign Sukuk Issued 11

Corporate Sukuk Issued by Sector 13

Sukuk Structure Breakdown 14

3. Islamic Investment Funds 15Islamic vs. Conventional Funds 15

Total Size of Islamic Funds 15

Number of Islamic Funds 16

Asset Class Breakdown 17

4. Islamic Financial Services 19Total Assets of Islamic Financial Institutions 19

Number of Islamic Financial Institutions 20

Total Assets of Islamic Banks and Islamic Windows 21

Number of Islamic Banks vs. Islamic Windows 22

Total Shariah-compliant Assets in Financial Institutions 22

Islamic Financial Institutions around the World 23



1. Introduction

This report describes key features of and patterns observed in the Islamic financial industry over the last 5 years (from 2011 to 2015). The report covers the size, growth, and location of main Islamic financial markets and institutions. In general, the total size of the Islamic financial industry at the end of 2015 was roughly 1.4 Trillion USD. This shows a 4% annual compound growth since 2011 but a 10% decline from the 2014 level of 1.6 Trillion USD.

Figure 1. Size of Islamic vs. Conventional Financial Industries, USD Million (2011-2015)

2011 2012 2013 2014 2015

Islamic Financial Industry 1,216,053 1,372,965 1,451,145 1,558,900 1,399,564

Conventional Financial Industry

187,757,166 195,525,067 197,142,187 197,905,889 199,496,347

Source: Bloomberg, The Banker, Thomson Reuters

Figure 2. Compound Annual Growth Rate of Islamic vs. Conventional Financial Industries (2011-2015)

Source: Bloomberg, The Banker, Thomson Reuters0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%

Conventional Financial Industry

Islamic Financial Industry 3.6%

1.5%

Figure 3. Annual Growth Trend of Islamic vs. Conventional Financial Industries (2012-2015)


-12%

-9%

-6%

-3%

0%

3%

6%

9%

12%

15%

2015201420132012

12.9%

-10.2%

5.7%7.4%

0.4%0.8% 0.8%

4.1%

Islamic Financial Industry Conventional Financial Industry

The total size of Islamic financial industry at the end of 2015 was approx. USD 1.4 trillion.

Islamic Finance Bulletin 1



Islamic financial institutions, such as banks and insurance companies, contribute nearly 91% to the total size of the Islamic financial industry. Sukuk constitute 5% of the Islamic financial industry while the remaining 4% comes from Islamic investment funds.

Figure 4. Share of Asset Classes within Islamic Financial Industry (2011-2015)


89%

85% 87%

89% 91%

3%

3%

4% 3%

4%

8% 12%

9% 7%

5%

2011 2012 2013 2014 2015

Islamic Banking Islamic Funds Sukuk

Figure 5. Share of Asset Classes within Conventional Financial Industry (2011-2015)


68% 66% 66% 65% 64%

13% 14% 15% 16% 18%

19% 20% 18% 19% 17%

2011 2012 2013 2014 2015

Conventional Banking Conventional Funds Bond

2



The different constituents of the Islamic financial industry have not been growing at the same rate. While Islamic investment funds have been growing in terms of value at an annual rate of 8%, since 2011, the total assets of Islamic banks and insurance companies show an annual growth of 4%. After reaching a record issuance amount of more than 160 Billion USD in 2012, Sukuk have been declining since then. By the end of 2015, Sukuk show an annual decline of 5% since 2011 and a 33% decline (year-on-year) since 2014.

Figure 6. Compound Annual Growth Rate of Islamic vs. Conventional Financial Industry per Asset Class (2011-2015)


4.0%

0.3%

8.0%

11.0%

-4.8%

-1.3%

Islamic Banking

Conventional Banking

Islamic Funds

Conventional Funds

Sukuk

Bond

Figure 7. Year-on-Year Growth of Islamic Financial Industry per Asset Class (2012-2015)


7% 9% 10%

-8%

26%

10% 6%

-7%

73%

-17% -15%

-33% 2012 2013 2014 2015

Islamic Banking

Islamic Funds

Sukuk




Next sections describe the different components of the Islamic financial industry in details by focusing on their historical trends, key types and structures, and geographical distribution.

Figure 8. Year-on-Year Growth of Conventional Financial Industry per Asset Class (2012-2015)


2% 1%

-2%

0.3%

13% 12%

4%

15%

7%

-8%

6%

-9%

2012 2013 2014 2015

Conventional Banking

Conventional Funds

Bond

4



2. Sukuk

Sukuk vs. Bonds issuance (USD), 1995-2015The Sukuk market, very understandably, makes up a tiny fraction of the overall bond market, representing merely 0.2% size of the total $487 trillion industry. However, It is worth noticing that Sukuk issuances have grown at a solid 27.1% rate, while the conventional bonds displayed an annual growth rate 7.2% between 1995 and 2015.

The first Sukuk’s launch took place in 1995. Since then, a number of businesses and governments have made use of this instrument to raise funds. Here we analyze Sukuk issuances from a few different dimensions, including issue size, count, type, domicile, and a comparison with conventional bonds. The primary observations on Sukuk are as follows:

Figure 9. Total Sukuk vs. Bonds Issued, USD Million (1995-2015)

USD Million

Sukuk 887,110

Bond 486,126,270


Bond

Sukuk

99.8%

0.2%

Figure 10. Share of Sukuk vs. Bonds Issued (1995-2015)


Figure 11. Sukuk Issued, USD Million (1995-2015)


-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Compound Annual Growth Rate : 27%

Sukuk issuances have grown at a compounded annual growth rate of 27.1%.




Figure 12. Average Sukuk Issued, USD Million (1995-2015)


1,201 10,846

50,076

115,059

1995-2000 2001-2005 2006-2010 2011-2015

Figure 13. Bonds Issued, USD Million (1995-2015)


Compound Annual Growth Rate : 7%

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

6



Figure 14. Average Bonds Issued, USD Million (1995-2015)


10,142,926

17,769,905

30,364,260

36,919,578

1995-2000 2001-2005 2006-2010 2011-2015

Number of Sukuk issued, 1995-2015There have been a total of 11,626 Sukuk issued between the first offering in 1995 and the end of 2015. The first two years, 1995 and 1996, saw merely one issue annually, and only 75 were issued between 1997 and 1999. Then 360 Sukuk were issued in 2000, and at least 150 have been offered every year since. The two peak offering years, by number, were 2008 and 2009 when 1,258 and 1,128 Sukuk were sold, respectively. Malaysian corporate and sovereign issuers have accounted for 10,090 Sukuk issues (86.8% of the total), followed by Indonesia (357 issues), Gambia (328), Bahrain (244), and Brunei (116).

Figure 15. Number of Sukuk Issued (1995-2015)


37

644

1,258

813 711

-

200

400

600

800

1,000

1,200

1,400

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015




Total Sukuk issued (USD), 1995-2015Over three-quarters of a trillion dollars ($887.1 billion) worth of Sukuk have been issued since 1995. Borrowers in East Asia, the pacific, and MENA regions issued more than 85% of all Sukuk. Other regions such Latin America and Europe-Central Asia also show healthy Sukuk issuance activity with 7.5% and 5.8% of total issuance size, respectively.

On a country basis, Malaysia’s dominance of the league table is less one-sided. The Malaysian government and Malaysian corporations have issued $592.2 billion since 1995, or 66.8% of the cumulative 21- year total. The next largest issuers are the Cayman Islands ($66.4 billion; 7.5%), Indonesia ($54.0 billion; 6.1%), Saudi Arabia ($37.8 billion; 4.3%), and Qatar ($22.3 billion; 2.5%). The years from 2011 to 2014 saw persistently healthy issues of more than $100 billion worth of Sukuk (year 2011 had $92.7 billion issued). However, the year 2015 witnessed a sharp drop to $76.0 billion. The last five years saw a cumulative issuance of $575.3 billion which represents 64.9% of the total issued since 1995. The single peak year for issuance was 2012, when Sukuk issuances worth $160.1 billion were placed.

Figure 16. Share of Sukuk Issuance by Country (1995-2015)


Malaysia Indonesia Gambia

Bahrain Brunei Other

86.8%

3.1%

4.2%2.8%

2.1%1.0%

Figure 17. Share of Sukuk Issuance by Region (1995-2015)


East Asia & Pacific

Middle East & North Africa

Latin America & Caribbean

Europe & Central Asia

South Asia

North America

Sub-Saharan Africa

74.1%

10.9%

0.2%

7.5%5.8%

0.4%1.1%

8



Figure 18. Total Sukuk Issued in Top 5 Countries, USD Million (1995-2015)


592,220

66,454 54,028 37,786 22,270

114,352

Malaysia Cayman Islands

Indonesia Saudi Arabia

Qatar Other

Over USD 880 billion worth of Sukuk have been issued since 1995.




Domestic vs. International Sukuk issued (USD), 1995-2015Sukuk issues have primarily been domestic. Those are the ones which are issued in the local market in the local currency. Of the total Sukuk issued, domestic issues make up a total of $642.5 billion. This contributes a solid 72.4% of the total Sukuk issuances of $887.1 billion. International Sukuk are the ones issued in Eurodollars, whose value issued is $244.6 billion (27.6%). International Sukuk issuance took a major hit in 2008 where the number fell from $31.3 billion from the previous year to a mere $7.7 billion.

Figure 19. Domestic vs. International Sukuk Issued, USD Million (1995-2015)

Classification USD Million

Domestic Sukuk 642,468

International Sukuk 244,642


Domestic Sukuk

International Sukuk

72%

28%

Figure 20. Share of Domestic vs. International Sukuk Issued (1995-2015)


Figure 21. Issuance Trend of Domestic vs. International Sukuk, USD Million (1995-2015)


-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Domestic Sukuk International Sukuk

10



Figure 22. Average Sukuk Issued Domestic vs. International, USD Million (1995-2015)


520 3,905

33,888

90,076

681 6,941

16,188

24,983

1995-2000 2001-2005 2006-2010 2011-2015

Average Domestic Sukuk Issued Average International Sukuk Issued

Corporate vs. Sovereign Sukuk issued (USD), 1995-2015Corporate Sukuk amount to nearly half of the total Sukuk issued between 1995 and 2015, adding up to $536.1 billion (60%). During the same period, Sovereign Sukuk issuances stand at $351 billion, constituting 40% of total issuances.

Figure 23. Corporate vs. Sovereign Sukuk Issued, USD Million (1995-2015)


Corporate Sukuk 536,138

Sovereign Sukuk 350,971


Corporate Sukuk

Sovereign Sukuk

60%

40%

Figure 24. Share of Corporate vs. Sovereign Sukuk Issued (1995-2015)


Corporate Sukuk issued account for nearly half of the total Sukuk issuance between 1995-2015.




Figure 25. Issuance Trend of Corporate vs Sovereign Sukuk, USD Million (1995-2015)


-

20,000

40,000

60,000

80,000

100,000

120,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Corporate Sukuk Sovereign Sukuk

Figure 26. Average Corporate vs. Sovereign Sukuk Issued, USD Million (1995-2015)


1,103 6,735

28,375

70,795

98 4,112

21,701

44,264

1995-2000 2001-2005 2006-2010 2011-2015

Average Corporate Sukuk Issued Average Sovereign Sukuk Issued

12



Corporate Sukuk issued by Sector (USD), 1995-2015The financial sector issued almost 60% of all corporate Sukuk. The Industrial and Utility sectors rank next with 13% and 11% of total corporate issues, respectively. Other prominent sectors include Energy, Materials, and Consumer Discretionary with around 3-4% of total corporate Sukuk issuance for each.

Figure 27. Corporate Sukuk Issued by Sectors, USD Million (1995-2015)


Financials 319,416

Industrials 71,867

Utilities 58,800

Consumer Discretionary 22,388

Materials 20,212

Consumer Staples 7,149

Energy 20,265

Technology 5,217

Health Care 2,053

Communications 8,773


Figure 28. Corporate Sector Share of Sukuk Issued (1995-2015)


59.6%

13.4% 11.0% 4.2%

3.8% 1.3% 3.8%

1.0% 0.4%

1.6%

6.8%

Financials Industrials Utilities

Consumer Discretionary Materials Consumer Staples Energy Technology Health Care Communications

The financial sector issued almost 60% of all corporate Sukuk.




Sukuk Structure Breakdown (USD), 1995-2015Sukuk can be classified into several types depending on their underlying contract structure. Murabaha and Ijara based Sukuk structures are the most popular with an issuance size of $170.1 billion (19.2%) and $157.1 billion (17.7%), respectively. A common feature in these structures is the pre-determined return in terms of leasing rate or trade sale premium. Despite the existing dominance of Murabaha over Ijara structure, the latter had consistently been higher in asset size till 2011. Only in 2012 the Murabaha Sukuk issued grew from $7.5 billion to $41.0 billion, to become leading Sukuk in terms of structure up till 2015. Sukuk based profit sharing contracts with variable return, such as Mudarabah and Musharkah Sukuk are less popular and constitute less than 12% of total issues. Nearly half of Sukuk identified have no clear structure, either because they lack such information or because they involve a combination of basic contracts that cannot be classified as one structure.

Figure 29. Sukuk Issued by Structure, USD Million (1995-2015)


Sukuk Al Murabaha 170,084

Sukuk Al Ijara 157,171

Sukuk Al Musharakah 75,730

Sukuk Al Mudarabah 26,619

Sukuk Al Istisna'a 10,768

Others 446,738


Figure 30. Structure Share of Sukuk Issued (1995-2015)


Sukuk Al Murabaha Sukuk Al Ijara

Sukuk Al Musharakah Sukuk Al Mudarabah

Sukuk Al Istisna'a Others

19%

9%

18%50%

3%1%

Figure 31. Structure Trend of Sukuk Issued, USD Million (2005-2015)


-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sukuk Al Murabaha Sukuk Al Ijara Sukuk Al Musharakah

Sukuk Al Mudarabah Sukuk Al Istisna'a Others

14



3. Islamic Investment Funds

Islamic vs. Conventional Funds (USD), 2015Islamic investment funds include open-end, closed-end funds, and other structures that cover different types of asset classes. Despite the impressive growth of Islamic investment funds at an annual rate of 13.4% between 1995 and 2015, Islamic fund assets currently represent only 0.1% of global assets under management which are worth around $36.2 trillion.

Total Size of Islamic Funds (USD), 1995-2015Starting with $4 billion in 1995, the size of Islamic investment funds continued to grow at an annual growth rate of 13.4% to reach slightly more than $50 billion by 2015. The funds witnessed steady growth through 2006 when the size had reached $10.2 billion. The year 2007, however, witnessed a sizeable year-on-year growth of 267% to $37.6 billion. The following year, Islamic funds took a major hit during the financial crisis of 2008 and dropped by nearly half to $18.5 billion. The assets peaked in size during 2014 with a total of $53.7 billion.

Figure 32. Islamic vs. Conventional Funds, USD Million (2015)


Islamic Funds 50,116

Conventional Funds 36,151,000


Conventional Funds Islamic Funds

99.8%

0.1%

Figure 33. Share of Islamic vs. Conventional Funds (2015)


Figure 34. Trend of Islamic Funds, USD Million (1995-2015)


4,059 9,822

13,539

37,578

53,726

-

10,000

20,000

30,000

40,000

50,000

60,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Compound Annual Growth Rate (1995-2015) : 13.4%

Islamic investment funds have grown at a compounded annual growth rate of 13.4% between 1995-2015.




Number of Islamic Funds, 1995-2015There are total of 785 active Islamic funds as at the end of 2015. The number has risen steadily from 1995 when there were only 6. The growth was remarkable during 2007 when the number rose from 34 funds from the prior year to 269 funds, displaying an over sevenfold increase. Again, Malaysia plays the most prominent role with 296 funds (37.7%) of the total. Saudi Arabia comes next with 197 funds (25.1%). Together, the two countries make up 62.8% of the total Islamic funds count. Pakistan and Indonesia follow, each with 67 (8.5%) of the total active funds. Interestingly, Luxembourg stands next with 36 funds (4.6%).

Saudi Arabian funds account for $22.1 billion (44.3%) of all funds. Malaysia holds the next highest asset size worth $16 billion (31.9%). Investment funds in these two countries represent more than 6% of the total size of the Islamic investment fund. As Saudi Arabia and Malaysia capture the bulk of Islamic investment funds, the corresponding regions of MENA and East Asia-Pacific are the geographic bellwethers, with 46.0% and 34.8% of the assets of Islamic investment funds, respectively. The Europe and Central Asia region comes next with 10.2% of Islamic investment assets. The remaining 9% of the fund assets are spread out across the North America, South Asia, Sub-Saharan Africa and Latin America & Caribbean regions.

Figure 35. Size of Islamic Funds by Country (2015)


Saudi Arabia

Malaysia

Ireland

Luxembourg

United States

Others

44%

32%

11%

5%

5%

3%

Figure 36. Size of Islamic Funds by Region (2015)


46%

35%

10%

3%3% 1%

2%


East Asia & Pacific


North America

South Asia

Sub-Saharan Africa


Saudi Arabia has 197 Islamic funds accounting for USD 22.1 billion, the highest asset size among all countries.

16



Asset Class Breakdown (USD), 1995-2015Several asset classes have been the focus of Islamic funds, especially since 2001. Prior to 2002, Islamic investment funds were focusing only on three main asset classes, namely Equity, Fixed Income and Money Market. Equity funds were the most dominating type representing almost 60% of all fund assets on average. The dominance of equity funds has lessened over the years as more asset classes emerged, such as commodity, real estate, alternative, and others. In 2015, Equity has been persistently dominating with a size around $20.8 billion (41.5%). The next largest fund type is Money Market with $13.4 billion (26.7%). Commodity funds had a size of with $6.1 billion (12.1%) while Fixed Income funds were worth $5.1 billion (10.1%).

Figure 37. Number of Islamic Funds (1995-2015)


-

100

200

300

400

500

600

700

800

900

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Figure 38. Number of Islamic Funds by Country (2015)


38%5%

9%

9%

25%

16%

Malaysia

Saudi Arabia

Pakistan

Indonesia

Luxembourg

Others




Figure 39. Size of Islamic Funds by Asset Class, USD Million (1995-2015)


0

5000

10000

15000

20000

25000

30000 19

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Alternative Commodity Equity Fixed Income

Mixed Allocation Money Market Real Estate Specialty

Figure 40. Proportion of Islamic Funds by Asset Class (1995–2015)


0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Alternative Commodity Equity Fixed Income

Mixed Allocation Money Market Real Estate Specialty

18



4. Islamic Financial Services

Total Assets of Islamic Financial Institutions (USD), 2011-2015By the end of 2015, commercial banks accounted for $1.27 trillion (92%) of total Shariah-compliant assets in the financial services industry. The Islamic insurance subsector, commonly known as Takaful, remains relatively small with total assets of $36.1 billion (2.8%). Investment banking represents less than half of a percentage point with total assets of $5.6 billion.

Figure 41. Islamic Institutional Assets, USD Million (2011-2015)


1,086,444 1,166,342

1,267,355 1,391,677

1,273,411

2011

2012

2013

2014

2015

Compound Annual Growth Rate (2011-2015) : 4.05%

Figure 42. Islamic Institutional Assets Classification, USD Million (2015)


Commercial Banks 1,164,202

Insurance Companies (Takaful) 36,138

Investment Banks 5,553

Other 67,518


Islamic banks accounted for USD 1.27 trillion, 92% of total Shariah compliant assets.




Number of Islamic Financial Institutions, 2012-2015In 2015, a total number of 357 institutions holding Shariah assets existed. The majority of those were commercial banks, 196 banks (54.9%). The number of Islamic insurance firms has remained relatively steady and totaled 87 in 2015 representing 24% of the total number of financial services institutions. Islamic banking assets and insurance companies represent 80% of the Islamic financial services industry. The remaining 20% belongs to investment banks, financing companies, and others.

Figure 43. Number of Islamic Institutions (2012-2015)


193 185 199 196

84 86 91 87

13 13 9 10

71 65 61 64

2012 2013 2014 2015

Commercial Banks Insurance Companies (Takaful) Investment Banks Other

Figure 44. Proportion of Islamic Institutions by Type (2015)


55%

3%

24%

18%

Commercial Banks

Insurance Companies (Takaful)

Investment Banks

Others

20



Total Assets of Islamic Banks and Islamic Windows (USD), 2011-2015It is worth noticing that Shariah-compliant assets exist both in Islamic banks, as well as in conventional banks through their Islamic windows. The assets in Islamic banks have consistently been greater than those in Islamic windows. In 2015, the proportion was $948 billion (74.4%) in the former and $325 billion (25.5%) in the latter. However, growth in the assets in Islamic banks is nearly non-existent since 2011 where the size was $942.9 billion while Islamic windows had $143.5 billion then, which corresponds to a CAGR of 22.7% over their four year period.

Figure 45. Islamic Banks Assets vs. Islamic Window Assets, USD Million (2011-2015)


942,926 961,357 1,019,761

1,108,663

948,096

143,518 204,985 247,594 283,014 325,315

2011 2012 2013 2014 2015

Full Islamic Institutions Islamic Window Institutions

Figure 46. Proportion of Islamic Banks Assets vs. Islamic Window Assets (2015)


74.5%

24.5%

Full Islamic Institutions

Islamic Window Institutions




Number of Islamic Banks vs. Islamic WindowsIslamic banks also outnumber Islamic windows as of 2015. At the end of previous year, they numbered 250 (70%). This represents a drop from 2012 when there were 262. In contrast, there were a total of 99 Islamic windows in 2012 which has grown to 107 in 2015.

Total Shariah-compliant Assets in Financial InstitutionsThe size of Islamic banking assets grew from $1,139.7 billion to $1,369.2 billion at an annual rate of 4.7%. Considering the asset size of Islamic funds and Sukuk at the end of 2015, the Shariah assets held by the banks globally comprise nearly 92% of the entire Islamic finance assets.

Figure 47. Number of Islamic Banks vs. Islamic Window Institutions (2012-2015)


262 245 249 250

99 104 111 107

2012 2013 2014 2015

Full Islamic Islamic Windows

Figure 48. Proportion of Shariah-compliant Assets by Institution Type (2011-2015)


92.2% 92.9% 93.1% 92.6% 91.4%

1.9% 2.2% 2.5% 2.5%

2.8%

0.9% 0.8% 0.7%

0.4% 0.4%

5.0% 4.1% 3.6% 4.5% 5.3%

2011 2012 2013 2014 2015

Commercial Banks Insurance Companies (Takaful) Investment Banks Other

The size of Islamic banking assets grew at an annual rate of 4.7%.

22



Islamic Financial Institutions around the WorldIran has the largest Islamic banking industry in terms of Shariah-compliant assets that is worth $316.49 billion (24.8%). Saudi Arabia comes next with $306.8 billion (21.4%) worth of Shariah-compliant banking assets. Malaysian banks hold $206.3 billion worth of Shariah-compliant banking assets (16.2%), UAE banks hold $111.3 billion (8.7%) and Kuwaiti banks hold $84.4 billion (6.6%).

As Saudi Arabia, the UAE and Kuwait are among the top countries with Shariah-compliant banking assets, it is not surprising to see the MENA region occupying 78.3% of the Shariah-compliant banking assets. While the East Asia & Pacific region capture 17.3% of the total Shariah-compliant banking assets, each of the other regions, such as South Asia, Europe-Central Asia, Sub-Saharan Africa, North America and Latin America- Caribbean, has less than a 5% share of total Shariah-compliant banking assets.

Figure 49. Regional proportion of Shariah-compliant institutional assets (2015)



East Asia & Pacific

South Asia


Sub-Saharan Africa

North America


78.3%

17.3%

0.8%1.2%

2.6%

Figure 50. Top 5 countries in terms of Shariah-compliant institutional assets (2015)


Iran

Saudi Arabia

Malaysia

UAE

Kuwait

Others

25%

16%

9%

7%

24%

19%

Saudi Arabia has about USD 307 billion (21.4%) worth of Shariah compliant banking assets.




In terms of the number of Islamic financial services institutions, Indonesia held the highest number with 54 institutions (15.1%). The countries that follow are Saudi Arabia with 42 institutions (11.8%), Malaysia with 37 institutions (10.4%), Bahrain with 30 institutions (8.4%) and Iran with 28 institutions (7.8%).

Figure 51. Top 5 Countries in terms of Number of Islamic Financial Institutions (2015)


Indonesia

Saudi Arabia

Malaysia

Bahrain

Iran

Others

54

42166

37

3028

24



Center of Research Excellence for Islamic Banking and FinanceP. O. Box 5040Building 15, Research InstituteKing Fahd University of Petroleum and MineralsDhahran, 31261Saudi Arabia

Email: [email protected]

Tel: +966 13 8601891Fax: +966 13 8601894

islamic finance bulletin march 2016 - wordpress.com...islamic financial institutions, such as banks...

Documents