September 19, 2024
Islamic finance industry has room to grow, experts say #IndustryFinance

Islamic finance industry has room to grow, experts say #IndustryFinance

CashNews.co

Photo for illustration purposes only.

Photo for illustration purposes only.

KUALA LUMPUR – There is still room to grow for Malaysia’s Islamic finance industry, said experts.

The Malaysia International Islamic Financial Centre (MIFC) Leadership Council chairman Tan Sri Azman Mokhtar highlighted that Islamic banking system assets accounted for 45.6 per cent of total banking assets at the end of 2023.

He projected that this figure would likely exceed 50 per cent within the next year or two.

“As for the capital market, 64 per cent, or about RM3.9 trillion, is already comprised of Islamic instruments such as sukuk and equity. About 45.6 per cent of total assets are already shariah-compliant and are expected to rise above 50 per cent.

“The largest bank, Maybank, already has 69 per cent of its total assets shariah-compliant,” Azman told reporters on the sidelines of the Invest Shariah Conference 2024 today.

Azman pointed to substantial opportunities for further expansion in the Islamic finance industry.

“The Islamic financial system has posted a compound annual growth rate of more than 11 per cent over the past 20 to 30 years. Global Islamic financial assets are estimated at approximately US$4.5 trillion, but this figure could be higher if waqf and zakat are included.

“Some projections indicate that this number will grow at a double-digit rate, reaching US$6.7 trillion by the end of this decade, if not sooner,” he added.

Azman also advocated for the listing of Islamic financial institutions on Bursa Malaysia, noting that such moves would enhance transparency for investors.

Earlier, Azman participated in a panel discussion titled “Maqasid al-Shariah Ecosystem in the Financial World: Are We There Yet?” alongside Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.

On the topic of listing Islamic financial institutions, Abdul Wahid said that some, like Bank Muamalat, are already listed on Bursa Malaysia.

“People are watching Bank Muamalat. It is just a matter of convincing their shareholders, which is the right thing to do.

“Sometimes people look for the right timing, but I have always believed that when you take a sizeable entity for listing, one of the benefits is not just access to capital but also the transparency that will drive better performance,” he added. – BERNAMA