THE Islamic Financial Services Board’s (IFSB) Islamic Financial Services Industry (IFSI) Stability Report 2019 stated the global IFSI grew 6.9% year-on-year (YoY) in 2018, and was estimated to be worth US$2.19 trillion (RM9.11 trillion) in the second quarter of 2018.
The Islamic banking sector retained its market dominance in the global IFSI, accounting for 72% of the total value of IFSI assets.
This was at the same time that the domestic market for Islamic banks in the banking industry increased in at least 19 countries, remained constant in six and declined in 11 jurisdictions among the 36 jurisdictions covered in the report.
The growth of the Islamic banking sector’s performance, however, moderated to 0.9% last year, compared to 4.3% in 2017, largely owing to the depreciation of local currencies against the US dollar, the report noted.
This was especially in select emerging economies with a significant Islamic banking presence.
At the end of 2018, the Islamic capital market accounted for 27% of global IFSI assets following a stronger performance, the report said.
This was due to sovereign and multilateral sukuk issuances in key Islamic finance markets to support budgetary expenditures and market debuts for sovereign issuances, including green sovereign sukuk, to finance eco-friendly environment projects.
The global takaful industry’s market share in the global IFSI was unchanged at 1.3%. Global takaful contributions grew 4.3% YoY in 2017. This brought its six-year compound average growth rate to almost 6.9%. At the end of 2017, an estimated 306 takaful institutions, including retakaful and takaful windows, offered takaful products in at least 45 countries globally.
In the report, IFSB secretary general Dr Bello Lawal Danbatta said the global IFSI is well positioned to maintain its positive growth trajectory after experiencing asset increases across all three of its main component markets.