Financial Outlook of the OIC Member Countries 2017
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3.3 ISLAMIC BANKING
Islamic banking sector which has the largest market share of the Islamic finance industry has
grown significantly since the first known experiment started in the Egyptian village of Mit
Ghamr in 1963. Islamic banking assets valued at USD 1.49 trillion in 2016 and it represents
approximately 79% of the industry’s total assets.
Between 2012-2016, the banking assets increased steadily as shown in the figure below.
However, in 2016 and 2015 the US Dollar values of Islamic banking assets in several countries
were affected by exchange rate fluctuations. Especially national currencies of Iran, Malaysia,
Nigeria and Turkey depreciated by more than 10% against the US Dollar in 2015, with an
average decline of 19.2% against the US Dollar.
Figure 28: Islamic Banking Assets (2012 1H-2016 1H)
Source: IFSB
In terms of global shares, Iran has the largest market share with accounting for 33% of the
global Islamic banking industry in the first half of 2016. Iran is followed by Saudi Arabia and
Malaysia with the market shares of 20.6% and 9.3% respectively. Among the Muslim countries,
the market share of GCC countries have the highest share compared to others. In first half of
2016, the top 10 Islamic banking jurisdictions in terms of asset size account for 91.8% of the
global Islamic banking industry. According to this concentration ratio, the stability of the
Islamic financial system as well as the further development and sustainable growth of the
industry is highly dependent on the soundness and resilience of Islamic banking operations in
these particular countries.
Figure 29: Shares of Global Islamic Banking Assets (1H2016) (%)
Source: IFSB
0
500
1000
1500
2000
2012 2013 2014 2015 2016
Asia GCC Mena (ex-GCC) Africa (ex-North Africa) Others
0
5
10
15
20
25
30
35