Now in its third year, The Banker’s Top 500 Islamic Financial institution report is the only annual benchmark of its kind, which ranks over 600 retail, commercial and investment banks, insurance companies and asset managers according to their Shariah-compliant assets.
Assets held by fully Shariah-compliant banks or Islamic banking windows of conventional banks, rose by 28.6 percent, to $ 822bn from $ 639bn in 2008.
This is in striking contrast to The Banker’s 2009 “Top 1000 World Bank Rankings” survey release in July, which showed annual asset growth of just 6.8 percent at conventional banks.
The Islamic finance industry continues to build a solid track record: the compound annual growth rate for 2006-2009 is 27.86 percent, with assets forecast to hit $ 1033bn in 2010.
The GCC states remained the dominant segment of Islamic finance, with $ 353.2bn or 42.9 percent of the total global aggregate. Iran remains the largest single market for Shariah-compliant assets, accounting for 35.6 percent of the global aggregate.
Outside the Middle East, Malaysia remains the largest player, accounting for 10.5 percent of the global aggregate, but other markets are expanding rapidly.
The UK now accounts for just under 2.5 percent of global Shariah-compliant assets, and the Syrian Islamic finance market expanded an eye-catching 500 percent.
Brian Caplen, Editor of The Banker magazine, said: “A conservative approach to risk and a close link between the financial sector and real assets has helped shield the sector from the worst of the credit crisis. But finding improved ways to manage liquidity at Islamic banks, as well as harmonising Shariah and prudential compliance between institutions and markets, remain significant hurdles.”
David Dew, Deputy CEO of HSBC Amanah, which has acted as sole sponsor of this industry benchmark since its creation, said: “It is important that the Islamic Finance industry continues to analyse its growth critically if it is to become a truly credible alternative to conventional banking in a significant number of markets.
“Our support for this global benchmark reflects HSBC Amanah’s status as the premier cross-border provider of Shariah compliant financial services to retail, corporate and institutional clients.
“It also illustrates our commitment to continue to meet customer needs, which we believe will enable the industry to achieve meaningful scale and mainstream relevance in a growing number of international markets.”
