* Islamic finance assets totalled $144bn in 2019; Qatar registered a compound annual growth rate (CAGR) of 10.7% in Islamic finance assets, the fourth highest in the world between 2014 and 2019
Qatar is among the 'Global Top 10 Countries by Islamic Assets’; Alpen Capital said and noted the country’s Islamic finance assets totalled $144bn in 2019.
Qatar’s Islamic finance assets to GDP stood at 40% in 2019; Alpen Capital said in its latest ‘Islamic Finance and Wealth Management Report’.
During the five-year period under review between 2014 and 2019, Qatar registered a compound annual growth rate (CAGR) of 10.7% in Islamic finance assets, the fourth highest in the world.
Region-wise, the GCC held the highest share in Islamic finance assets with 43.6% or $1,253bn, while other Mena countries and South East Asia (SE Asia) accounted for 26.3% ($755bn) and 23.8% ($685bn), respectively, Alpen Capital said.
Notably, SE Asia gained significant momentum in terms of growth in Islamic finance over past few years. This growth was largely backed by the growing Muslim population in the region, along with a rising proportion of Muslims who seek to make investments that are in line with their religious beliefs.
Consequently, the governments in the region, especially Malaysia and Indonesia, played an active role in promoting Islamic finance instruments and rolled out a number of regulations to support the landscape.
Islamic banking is the largest sector in the Islamic finance industry, contributing to 69.3% of the industry's assets in 2019.
The sector is supported by an array of commercial, wholesale, and other types of banks. Although the total share of Islamic banking has fallen from 73.1% in 2014 due to the rapid rise of Islamic Capital Market (ICM) instruments, especially sukuk and Islamic funds, it recorded a CAGR of 6.7% over the past five years.
After weathering subdued growth since 2016, the sector rose 14.2% y-o-y in 2019 to $1,993bn in global assets.
This growth can be largely attributed to improvements in assets across the GCC, which witnessed significant mergers of Islamic banks to strengthen competitiveness, attract stable deposits and enhance efficiency.
Shariah-compliant assets represent a significant portion of total banking assets of the GCC, Alpen Capital noted.
Moreover, the GCC countries collectively accounted for 45.2% of the total Islamic banking assets globally.
Qatar accounted for $121.7bn Islamic banking assets in 2020. In Qatar, the 8.4% y-o-y growth in assets during 2020 was buoyed by strong regulatory support and focus on technological developments that allowed easy and safe execution of services amid the pandemic.
In terms of consolidation in the GCC Islamic banking sector, Alpen Capital said, “As the sector looks to enhance its service offerings, consolidation is likely to remain a key theme in the GCC markets. This can be seen in the recent mergers of Barwa Bank with International Bank of Qatar, which made it the country’s third-largest Islamic banking franchise.”