The GCC Islamic banking profit pool crossed US$12bn for the first time in 2014, found an EY report, which expects the sector to continue to grow amid regional economic uncertainty.
A press conference was held in Manama, Bahrain on Sunday to highlight key strategic insights from the EY World Islamic Banking Competitiveness Report 2015-2016.
The World Islamic Banking Conference (WIBC) and EY hosted the press conference, held exactly one month ahead of the 22nd annual WIBC.
The report has for several years been a key feature at the annual WIBC, which is globally renowned for being, among other things, a platform for cutting-edge thought leadership and intelligence for the past 22 years.
The full year's report will be developed by EY's Global Islamic Banking Centre and exclusively launched at WIBC 2015 on December 2.
Speaking at the press conference, Ashar Nazim, partner, global Islamic finance leader, EY, said, "The key findings of the EY World Islamic Banking Competitiveness Report 2015-2016 provide some groundbreaking revelations which will help shape the future of Islamic banks. Innovations in technology and digitalisation call for transformation of customers' banking experience across channels and all touch points and this transformation can help banks anticipate the changing needs of customer."
According to the report, nine core markets are currently the growth engines for the global Islamic finance industry. The report identifies a group of 40 banks across these nine core markets that are systemically important to the future progress of the industry. Out of the 40 banks, over 50 per cent have an equity base of US$1bn or more.
"The growth of the Islamic banking industry in the GCC, specifically in Saudi Arabia, in the past few years can be attributed to the increased public sector spending on the back of oil revenues. It will be interesting to see how banks are affected as governments draw their reserves from the banking sector to narrow the gap on budget deficits due to the drop in the global oil price," said Muzammil Kasbati, director, global Islamic banking center, EY.
Nazim added, "The hope is that the insights will serve to spur critical discussions among CEOs of the top Islamic banks - not just at the conference, but beyond it, in boardrooms and other decision-making areas where we hope to have the most impact."
The UAE's Islamic banking sector in particular has been gaining momentum backed by its innovation and growing digital footprint, thus putting it on par with Malaysia in terms of global market share.
Alongside Nazim at the press conference was Dr Sayd Farook, vice chairman and CEO of Middle East Global Advisors, the conveners of WIBC during its 22-year history.
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