Improving Banking Supervisory Mechanisms
In the OIC Member Countries
72
In Figure 49, we present the current leverage ratios of the selected OIC member countries. We
observe that almost all countries have a leverage ratio higher than 5%, which is clearly higher
than the 3% minimum and indicates that Islamic banking in the selected OIC countries will not
have significant difficulty in adopting the leverage ratio requirement of Basel III. Additionally,
Figure 50 shows the loan-to-deposit ratio for the selected OIC member countries, where
almost all of the Islamic banks have a high loan to deposit ratio. This can be seen as a positive
aspect for this group of banks since they can obtain the most reliable liability source, which is
generally not the case for conventional or investment banks.
Figure 49: Islamic Banking Loan to Deposit
Source: KFHR
Figure 50: Islamic Banking Off Balance Sheet/Total Asset
Source: KFHR
0
1
2
3
4
5
6
7
8
UAE MALAYSIA SAUDI ARABIA TURKEY PAKISTAN INDONESIA
Islamic Banking Loan/Deposit
2008
2009
2010
2011
2012
2013
0
0,2
0,4
0,6
0,8
1
1,2
UAE MALAYSIA SAUDI ARABIA TURKEY PAKISTAN INDONESIA
Islamic Banking Off Balance Sheet/Total Asset
2008
2009
2010
2011
2012
2013