Islamic finance assets globally reached an estimated US$1.46 trillion in 2012 and will touch US$2 trillion mark by 2014, according to a report released by TheCityUK’s UK Islamic Finance Secretariat (UKIFS).
The growth of Islamic finance comes despite of slowdown in the global economy and pressure on conventional banking in western countries.
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The report also predicts that the industry is set to grow significantly in the years ahead.
The Muslim population of 1.6 billion accounts for around a quarter of the global population, but Shariah compliant assets make up only around 1% of the world’s financial assets, showing a wide margin for growth.
Even so, competition is fierce, with average management fees worldwide for Sharia compliant assets down from 1.5% to 1.0% over the past six years, according to the report.
Among different western regions, London serves as evolving global market with over 20 UK-based banks that provides Islamic finance services, of which six are fully Sharia compliant, whose assets account for only 1% of the world’s financial assets.
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By GlobalDataTheCityUK CEO, Chris Cummings, said institutions in the UK have been providing Islamic financial services for 30 years.
"Our report once again shows that the UK continues to maintain its position as the leading Western provider of Islamic finance. This has been acknowledged by the World Islamic Economic Forum hosting their 9th forum in London in 2013, the first time this major international conference has been held outside Asia," Cummings added.
"We look forward to continuing our work with Government to encourage inward investment via Islamic finance and to extend the UK’s advantage as the leading western hub for Islamic finance."
