logo
Global Islamic finance assets to surpass $7.5 trillion by 2028

Global Islamic finance assets to surpass $7.5 trillion by 2028

Khaleej Times20-05-2025

Global Islamic finance assets will reach $7.5 trillion by 2028, up from $5.5 trillion in 2024, reflecting the rapid expansion and growing relevance of Shariah-compliant finance in global markets, a report showed on Monday.
Standard Chartered unveiled today its comprehensive report on Islamic banking titled 'Islamic Banking for Financial Institutions: Unlocking Growth Amidst Global Shifts.'
In 2024, the Islamic finance industry surpassed a major milestone, reaching $5 trillion in global assets. This represents a 12 per cent rise from 2023 and a 43 per cent increase from 2020. Islamic banking is the largest contributor to the Islamic finance industry and remains the engine of growth, accounting for over 70 per cent of total Islamic finance assets. Islamic Banking assets are expected to grow from $4 trillion in 2024 to $5.2 trillion by 2028, the report said.
In the early years of Islamic finance, adoption was limited to a handful of markets. Now, a network of over 1,980 Islamic financial institutions deliver Islamic finance products and solutions across more than 90 markets worldwide. Yet despite this expansive market reach, 80% of industry assets remain concentrated in five markets: Iran, Saudi Arabia, Malaysia, the UAE and Kuwait. 'The diversification of assets outside of these markets will depend on how the broader community responds to challenges and seizes opportunities in the coming years. Such challenges and opportunities will be both internal to the industry, and at a regional and global socioeconomic level,' the report said.
Meanwhile, the sukuk market is set to rise from $971 billion to nearly $1.5 trillion over the same period. Sukuk issuance remains concentrated in the Gulf Cooperation Council (GCC), Southeast Asia, Türkiye, and Pakistan. However, we have seen Egypt, the Philippines, and Kenya emerge with more corporate and sovereign issues in recent years. Sukuk has increasingly been attracting a wider range of buyers, proving popular with non-Muslim investors, which has helped to narrow a notable gap in demand and supply. Sukuk is expected to form a more prominent portion of assets in the Islamic finance industry in the future, as demand for Shariah-compliant financial instruments grows.
Khurram Hilal, CEO, Group Islamic Banking, Standard Chartered said: 'Islamic finance is entering a new era that is defined by scale, sustainability, and strategic integration. A 36 per cent projected increase in assets reflects the sector's strong fundamentals and global appetite for ethical and inclusive finance. At Standard Chartered, we are proud to support this evolution through tailored, Shariah-compliant solutions in over 25 markets.'
The report notes persistent challenges in the sector. The ambitions of both Islamic financial institutions and governments to drive the industry further cannot be fully realised without various key developments, particularly in the standardisation of regulatory and legal frameworks, and the wider availability of Islamic risk management and liquidity tools. 'This inflection point brings multiple opportunities. The financial institutions that lean quickly into innovation and emerging trends will be likely to secure first-mover advantages. There is also significant opportunity to be seized by deepening alignment with sustainability, ESG, and ethical finance,' the report said.
Khurram concluded: 'Fostering innovation, strengthened market connectivity, and an elevated focus on sustainability will unlock the greatest opportunities in the future of Islamic finance. We aim to play a pivotal role in this future, collaborating, adapting, and delivering value to our clients and communities globally.'

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

UAE President, Pakistani Prime Minister pledge closer ties
UAE President, Pakistani Prime Minister pledge closer ties

TAG 91.1

time4 hours ago

  • TAG 91.1

UAE President, Pakistani Prime Minister pledge closer ties

UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan has held talks with Pakistan's Prime Minister Muhammad Shehbaz Sharif, who is on a working visit to the country. The meeting took place at Qasr Al Shati in Abu Dhabi, where the two leaders exchanged Eid Al-Adha greetings and well wishes for continued prosperity in both nations and peace across the Muslim world. Talks focused on strengthening bilateral ties, especially in the areas of economic cooperation, investment and development sectors. Both leaders reaffirmed their commitment to expanding their strategic partnership in line with their shared national goals. They also discussed regional and international developments, underlining the importance of supporting efforts to promote peace and stability globally. Sharif praised the UAE's diplomatic leadership and expressed his appreciation for the country's continued support to Pakistan, including development initiatives that have had a strong impact on the ground. Earlier in the day, the Pakistani Prime Minister was welcomed at Al Bateen Airport in Abu Dhabi by His Highness Sheikh Tahnoon bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi and National Security Adviser, along with a number of senior officials. #WamNews — WAM English (@WAMNEWS_ENG) June 12, 2025

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)-Supported Nakkaş-Başakşehir Motorway Wins TXF Social Infrastructure Deal of the Year 2024
The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)-Supported Nakkaş-Başakşehir Motorway Wins TXF Social Infrastructure Deal of the Year 2024

Zawya

time5 hours ago

  • Zawya

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)-Supported Nakkaş-Başakşehir Motorway Wins TXF Social Infrastructure Deal of the Year 2024

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) ( a Shariah-compliant multilateral insurer and member of the Islamic Development Bank (IsDB) Group, is proud to announce that the Nakkaş-Başakşehir Motorway Project in Türkiye has been named TXF's Social Infrastructure Deal of the Year 2024, awarded during the TXF Global Awards Ceremony held on 11 June 2025. This landmark project involves EUR 1.044 billion in non-recourse financing for the development of a 35-kilometer greenfield motorway in Istanbul Province—the final section of the Northern Marmara Motorway, a 450-kilometer corridor connecting Türkiye's Asian and European regions. The public-private partnership is expected to significantly reduce traffic congestion, improve trade logistics, and cut commute times by up to 40 minutes. The project aligns with multiple UN Sustainable Development Goals (SDGs), notably SDG 8 (Decent Work), SDG 9 (Infrastructure), SDG 11 (Sustainable Cities), and SDG 17 (Partnerships), by creating jobs, modernizing transport infrastructure, and fostering international cooperation. ICIEC played a pivotal role in the financial close by offering a comprehensive risk mitigation solution, including a EUR 74 million Non-Honoring of Sovereign Financial Obligations (NHSFO) policy to Standard Chartered and Deutsche Bank, and Equity Investment Insurance to Korean investors. 'This award reflects the strength of our partnership with the Government of Türkiye, our member institutions, and the private sector,' said Dr. Khalid Khalafalla, CEO of ICIEC. 'We are particularly proud to have supported this project alongside other Export Credit Agencies and Multilateral Development Banks—most notably our parent institution, the Islamic Development Bank, and our sister entity, the Islamic Corporation for the Development of the Private Sector. Together, we leveraged synergies to mobilize Islamic finance and de-risk strategic infrastructure. Congratulations to all parties involved in delivering a project with lasting developmental impact.' This transaction exemplifies ICIEC's mission to provide innovative risk mitigation solutions that enable impactful trade and infrastructure investment across its 50 member states. Distributed by APO Group on behalf of Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). Media Contact: Email: ICIEC-Communication@ About The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC): ICIEC commenced operations in 1994 to strengthen economic relations between OIC Member States and promote intra-OIC trade and investments by providing risk mitigation tools and financial solutions. The Corporation is uniquely the only Islamic multilateral insurer in the world. It has led from the front in delivering a comprehensive suite of solutions to companies and parties in its 50 Member States. ICIEC, for the 17 th consecutive year, maintained an "Aa3" insurance financial strength credit rating from Moody's, ranking the Corporation among the top of the Credit and Political Risk Insurance (CPRI) Industry. Additionally, ICIEC has been assigned a First-Time 'AA-' long-term Issuer Credit Rating by S&P with Stable Outlook. ICIEC's resilience is underpinned by its sound underwriting, reinsurance, and risk management policies. Cumulatively, ICIEC has insured more than USD 121 billion in trade and investment. ICIEC activities are directed to several sectors - energy, manufacturing, infrastructure, healthcare, and agriculture. For more information: visit:

UAE emerges as resilient FDI hub amid GCC slowdown
UAE emerges as resilient FDI hub amid GCC slowdown

Khaleej Times

time5 hours ago

  • Khaleej Times

UAE emerges as resilient FDI hub amid GCC slowdown

Foreign Direct Investment (FDI) flows into the GCC region are expected to experience a slowdown in 2025 following a decade of sustained growth, but the UAE is expected to buck the trend and remain a regional bright spot. The tempered outlook reflects a confluence of global uncertainties — including evolving US trade policies, declining oil prices, and a more measured pace in the execution of GCC economic diversification projects, according to a new analysis by S&P Global Market Intelligence. The GCC, led by key economies such as the UAE and Saudi Arabia, has historically been a magnet for FDI, attracting capital with its resource-rich economies, stable currencies, and increasingly business-friendly regulatory environments. However, S&P's latest forecast underscores that geopolitical tensions, global economic adjustments, and sectoral realignments will moderate growth prospects over the coming year. Despite this overall cautionary outlook, the UAE is expected to buck the trend and remain a regional bright spot. Recent data from the United Nations Conference on Trade and Development (Unctad) indicates that the UAE was the second-largest recipient of FDI in the Middle East in 2023, garnering over $23 billion, up by more than 28 per cent year-on-year. The Emirates has leveraged its strategic location, progressive reforms, and focus on high-tech and green investments to stay ahead of its peers in the FDI race. S&P Global analysts suggest that the ongoing strategic competition between the US and China will continue to play out in the Mena region, offering opportunities for countries to attract capital from both economic giants. This rivalry is likely to result in a steady stream of bilateral deals, although no immediate shifts in strategy are expected despite high-profile visits and investment pledges. One mitigating factor that could cushion the regional slowdown is the recent weakness in the US dollar, which effectively lowers the cost of investment for non-dollar investors — especially from Europe, China, and India. Since most GCC currencies are pegged to the dollar, the depreciation enhances the external competitiveness of their economies. This stands in contrast to non-GCC nations like Morocco and Tunisia, whose appreciating currencies have begun to erode their investment appeal. Crucially, the nature of FDI inflows into the GCC has shifted decisively in recent years. Once dominated by the hydrocarbons sector, investments are increasingly targeting renewable energy, logistics, infrastructure, tourism, and advanced construction. For instance, the UAE has unveiled ambitious initiatives such as the Dubai Clean Energy Strategy 2050 and Masdar City, both aimed at boosting sustainability and clean-tech innovation. Abu Dhabi's ADIO (Abu Dhabi Investment Office) has also expanded its outreach to high-growth sectors like AgTech and advanced manufacturing. Beyond clean energy, the UAE continues to draw global technology firms, supported by its free zones, talent-friendly visa reforms, and digital infrastructure. In 2024, the UAE launched a new Unified Investment Platform, streamlining licensing and approvals across its emirates, further bolstering its attractiveness to international investors. Nevertheless, the broader regional picture remains mixed. Lower oil prices, driven by softening global demand and rising Opec production, have compressed the foreign exchange reserves of major oil exporters. This not only limits their ability to invest outwardly in the wider Mena region but also reduces fiscal room for further domestic diversification spending. S&P Global notes that while GCC countries will likely resort to increased sovereign borrowing to keep diversification efforts on track, the net effect on global FDI flows will remain negative in the near term. The ripple effects of US tariffs and trade tensions are already manifesting in investor sentiment, with risk-averse capital reallocations away from emerging markets. The UAE, however, continues to strengthen its resilience. In 2023, it signed comprehensive economic partnership agreements (CEPAs) with India, Indonesia, and Türkiye, expanding its trade horizons and enhancing its investment inflows. Additionally, its liberalized 100 per cent foreign ownership laws and golden visa program have been instrumental in positioning the Emirates as a regional headquarters for multinationals. According to analysts, GCC states like Saudi Arabia are pushing ahead with giga-projects under their Vision 2030 umbrella — most notably Neom and The Line — though timelines remain uncertain given the capital-intensive nature of these undertakings and rising global financing costs. In contrast, non-GCC Mena countries may face deeper challenges. While countries like Egypt, Morocco, and Tunisia continue to attract sector-specific FDI in tourism and renewables, structural issues — currency volatility, political uncertainty.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store