The UAE is solidifying its status as the global hub of the Islamic finance industry, with Shariah-compliant banking assets reaching an impressive 23% of the country’s total banking assets, equivalent to Dh845 billion.
Central Bank’s Perspective
Khaled Mohamed Balama, Governor of the Central Bank of the UAE, underscores the integral role of the nation’s buoyant Islamic banking sector in sustainable finance and its alignment with the UAE’s regulatory directives.
Sustainable Growth and Development Goals
The Islamic finance sector is deemed key to the UAE’s sustainable growth and the achievement of sustainable development goals, reflecting the vision of the country’s leadership. Balama affirms ongoing efforts to support the development of Islamic and sustainable finance sectors in the UAE.
Contributions and Strengthening Principles
Islamic windows, takaful markets, and sukuk issuances collectively contribute 25% of total Islamic banking assets in the UAE, amounting to Dh214 billion. The issuance of the Guiding Principles Regarding Sustainability in Islamic Financial Institutions further fortifies these contributions.
Central Bank’s 2023 Islamic Finance Report: A Focus on Sustainability
Global and Local Assessment
The Central Bank of the UAE’s Islamic Finance Report for 2023 aligns with the UAE’s Year of Sustainability and analyzes the sustainable efforts of Islamic financial institutions (IFIs) globally and locally. The report delves into various Islamic finance sectors, initiatives, and activities, with a specific focus on sustainability.
UAE’s Islamic Finance Landscape
The UAE’s Islamic finance landscape encompasses eight standalone Islamic banks, 16 Islamic banking windows of conventional banks, and nine Islamic finance companies. The report spotlights the presence of 10 takaful insurance companies, with total gross written contributions reaching Dh4 billion in 2022, and the value of sukuk outstanding at Dh217 billion in H1 2023.
Global Islamic Finance Industry: Projections and Segments
Anticipated Growth
Globally, the Islamic finance industry is poised to surpass the $3 trillion mark in 2023, showing a growth of approximately 10%. Projections by the ICD-Refinitiv Islamic Finance Development Indicator report foresee the global Islamic finance industry reaching $6.0 trillion by 2026.
Segment Dynamics
Islamic banking activities constituted around 70% of global Islamic finance assets in 2021, with other segments such as Shariah-compliant debt capital market instruments, Islamic funds, and various financial institutions collectively contributing to the industry’s growth.
Also Read
“Equity Markets Rise Alongside Treasury Yields; Oil Surges Amid Concerns Over Supply”-1