Assets invested in line with Islamic law or Shari'ah are expected to reach 1.8 trillion U.S. dollars by 2013 globally, up 38.5 percent year on year, according to Ernst & Young's World Islamic Banking Competitiveness Report 2013 released Monday.
The report said that the top 20 Islamic banks have registered a growth of 16 percent per annum in the last 3 years. Saudi Arabia emerged as the largest market for Islamic assets, with an estimated 207 billion dollars in 2011, was ranked first by the report. The kingdom is followed by Malaysia, ranked 106 billion dollars Shari'ah-compliant assets while the UAE ranked third with total assets of 75 billion U. S. dollars.
The top 20 Islamic banks hold 57 percent of the total global Islamic banking assets and are concentrated in the seven core markets for Islamic banking which include Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar, Malaysia and Turkey, said Ashar Nazim, partner of the Global Islamic Banking Center of Excellence at global consultancy and corporate audit firm Ernst & Young.
New promising Islamic finance markets were Egypt and Libya, said the report.
Islamic finance does not allow banks to operate with interest, but with profit and loss-sharing models whereas clients and banks become partners, rather than capital takers and lenders. In addition, shares of companies conducting un-Islamic businesses like weapons, pornography, pork meat production or producing and selling alcoholics are banned from any Islamic fund or financial index.