Islamic Banking set for 2007 boom

3 January 2007

Forecasts have suggested that Islamic Banking will continue its stellar rate of growth in 2007 as it becomes increasingly globalized.

The Islamic finance sector is currently enjoying estimated year-on-year growth in value terms of between 15 and 20 per cent.

However, in terms of balance sheets, deposits, branch numbers and assets under management in selective individual Islamic financial institutions (IFIs), growth is believed to be closer to between 25 and 40 per cent.

Islamic finance products such as Sukuk issuance and syndicated Murabaha facilities are now being provided for major firms such as Saudi Aramco, SABIC, Emirates, Qatar Gas 7 Petroleum Company, Alba and Dubal.

New markets for Islamic finance are also expected to emerge during 2007 to challenge the GCC Utilities and Malaysia as the leading players.

These include Indonesia, the most populous Muslim country in the world with more than 210 million people.

Indonesia is currently in the process of launching its first Sukuk issuance, while other nations such as Singapore also entertain aspirations of becoming the International Islamic Capital Markets center.

Meanwhile, the involvement of leading international banking conglomerates is making Islamic banking an increasingly globalized industry.

Banking groups such as HSBC, Citigroup, BNP Paribas, Deutsche Bank and Credit Suisse are all expected to use their marketing expertise and global reach to bring Islamic banking to new markets in 2007.

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