Ernst & Young, one of the Big 4 companies in consulting and finance industry, published the “World Islamic Banking Competitiveness Report 2016” based on publicly available data from 15 participation banking markets. The report reviews performance of the participation banking system.
- Participation banking assets grew strongly in 2014 with GCC gaining above average growth rate.
- Saudi Arabia and Malaysia are the respective leading markets in GCC and Asia Pacific.
- Approximately 93% of international Participation banking assets are based out of nine core markets, while QISMUT share stands at 80%.
- Saudi Arabia continues to dominate the growth share of the market with strong comeback by Kuwait and Qatar. Bahrain is also steadily gaining market share over traditional banks.
- Saudi Arabia, Qatar and Pakistan are enjoying double digit median banking growth (2010–14).
- 17 out of 20 top banks by capitalization are based in QISMUT
- Combined profitability of the top 20 Participation banks has increased during the year by US$1b to cross US$7b in 2014, growing with a CAGR of 14% (2010-2014). This resulted in healthy growth of ROE, which has positively contributed towards increasing shareholders’ equity (22 banks have crossed the equity landmark of US$1b).
- QISMUT and other core markets are to drive the future growth of the industry with Turkey expected to recover from the current temporary setback.
- Participation banking continues to drive high growth over traditional banks and capturing market share in all key markets with the exception of Turkey.