Global Islamic finance assets expected to reach $3.69 trillion in 2024

Global Islamic finance assets are expected to reach $3.69 trillion by 2024, states the 2020 Islamic Finance Development Report released on Wednesday.

The report has been compiled by Refinitiv and the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IsDB).

The global Islamic finance assets increased by 14 per cent year-on-year totaling $2.88 trillion in 2019.
Islamic finance assets of GCC countries reached $1.2 trillion in 2019, followed by Middle East and North Africa countries at $755bn (excluding the GCC), and Southeast Asia at $685bn.

The Islamic banking sector contributes the bulk of the global Islamic finance assets. The sector grew 14 per cent in 2019, equating to $1.99 trillion in global assets. It was a significant growth recorded in 2019, given that in 2018 the sector grew just 1 per cent and averaged an annual growth of 5 per cent from 2015 to 2018.

The report added that the top five countries driving Islamic finance are Malaysia, Indonesia, Bahrain, UAE and Saudi Arabia.

In 2020, Indonesia showed the most significant improvements in the Islamic Finance Development Indicator (IFDI) moving into second place for the very first time.

The report canvassed 135 countries and based its findings on five key metrics comprising of quantitative development, knowledge, governance, awareness, and CSR.

The report found that Green and Socially Responsible Investments (SRI), increased in the UAE and Southeast Asia in 2020. While several Islamic banks reported losses and reduced profits this year as a result of the pandemic, it also led to growth in a few areas as some regulators turned to Islamic finance to mitigate the economic impact.

“We remain convinced that Islamic finance can play a major role in alleviating the social and economic consequences of the Covid-19 pandemic,” added Ayman Sejiny, the CEO of ICD.

Nasdaq Dubai has seen a significant number of sukuk listings this year. In 2020 alone, the value of new debt listings on Nasdaq Dubai has reached a record annual high of $18.4bn, up 4 per cent from the previous record of $17.7bn over the course of the entire year in 2019.

Read: Dubai Islamic Bank lists $1bn sukuk on Nasdaq Dubai

Global sukuk issuance reached $130.5bn in the first nine months of 2020, up 2.5 per cent from $127.3bn in the same period of 2019.