The total of all commercial banks’ Islamic assets is estimated to reach $1.55 trillion this year, $1.8 trillion in 2013 and over $2 trillion mark, the report said. Gulf-based Islamic banks now have $450 billion in assets, about 30 percent of the total.
Islamic banks will grow as they focus on customers who expect more than just sharia-compliance in terms of products and service and have traditionally relied on conventional banks.
“Success will be defined in the core markets through the transformation of Islamic banks so they are able to compete with the much bigger, conventional boys for mainstream customers,” Ashar Nazim, Islamic financial services leader at Ernst & Young, said. Islamic finance follows religious guidelines such as a ban on interest and on pure monetary speculation, with its core markets in the Middle East and Southeast Asia.
The role of pure Islamic banks will also become important by comparison with banks that deliver products just through Islamic windows at their existing branch networks.
“There is no truly fully fledged Islamic bank (that stretches) across international markets or even regional,” Nazim said.—Newswire