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Only a few years ago, Islamic finance was riding the crest of a wave. 2012 was the biggest year on record for sukuk issuances, with $137bn raised: the overall outlook for the industry was promising.
But the picture has changed considerably over the last two years as growth in the Islamic finance industry has slowed in tandem with the drop in the oil price.
Islamic finance remains concentrated primarily in oil-exporting countries: the six GCC countries, along with Malaysia and Iran, account for more than 80% of the industry’s assets.
Global Islamic banks grew their assets by 12% in 2014 but this fell to 7% in 2015, according to a report published by S&P Global earlier this month (see chart 1). S&P Global predicts this slowdown will persist in 2016 and 2017, with growth stabilizing at around 5%. (CONTINUED - 2162 WORDS)