Qatar's Islamic Finance Assets Grew 11 Pct in Past 5 Years, Report Finds

Doha, January 09 (QNA) - Qatar Financial Centre (QFC), in collaboration with Thomson Reuters and Islamic Research and Training Institute (IRTI), launched on Tuesday a report on Islamic financing in the State of Qatar titled "Expanding Horizons," providing detailed analysis and key insights on the evolution of the Islamic finance industry in Qatar and looking at recent developments across the Islamic finance industry and the broader economy. The report, which was launched during the opening session of the 4th Doha Islamic Finance Conference (IFC Doha), said that the Islamic finance industry is a vital part of Qatar's financial system, with the sector's assets growing at a compound annual growth rate (CAGR) of 11 percent over the last five years. The report is the tenth release in a series of Islamic Finance Country Reports published jointly by Thomson Reuters and IRTI, a member of the Islamic Development Bank Group, aimed at supporting the development of the global Islamic finance industry in Qatar through the provision of information and insights. The report shed the light on Islamic banks, which hold the largest share of Islamic financial assets, worth QR 323 billion in 2016. It notes that Islamic banks have been the key driver of Islamic finance growth in recent years, while Takaful and non-bank financial institutions together accounted for only 2 percent of total Islamic finance assets in 2016. Assets of the non-bank financial sector were valued at QR 3.9 billion. Meanwhile, the Takaful sector in Qatar, valued at a mere QR 2 billion in 2016, has underperformed conventional insurance in terms of market penetration as well as growth. Sukuk represent 15 percent of total Islamic finance assets, with a total of QR 57 billion in outstanding issuances. Sharia-compliant investment funds make up more than half the asset management sector in Qatar, with QR 541 million in assets under management. In this regard, QFC Authority Chief Executive Officer Yousuf Mohamed Al Jaida called for focusing on "attracting businesses and investors that will serve Qatar's goal of diversifying its economy, in line with the Qatar National Vision 2030." "Qatar's geography and the scale of investment programs in its infrastructure development under the National Vision make it an attractive destination for investors, in addition to a competitive local market and a highly developed value chain supporting the needs of investors," Al Jaida added. For his part, HE Sheikh Mohammed bin Hamad bin Jassim Al-Thani, chairman of conference sponsor Barwa Bank, said the Islamic financial industry has been the subject of wide attention of specialists, researchers and supportive scientific institutions in order to develop Islamic finance tools to cope with the digital world and find solutions and opportunities to meet economic needs in line with contemporary methods. He added that Islamic banking has achieved noticeable growth in the recent years, with huge sums of money flowing into the industry, which opened the door for competition with regular banks over seizing the biggest share of investment money in the region. Meanwhile, Dr. Haitham Al Salama, QFC chief economic advisor, said that Islamic finance has shown steady growth for more than a decade, noting that global Islamic assets grew from about $200 billion in 2003 to $2.2 trillion by the end of 2016. Al Salama added that growth is expected to continue to reach $3.7 trillion by 2022, in a compound growth rate of 9.4 percent due to several factors, mainly the rise in traditional investors' demand for Sharia-compliant banking as well as the increasing and facilitating of the access of Muslim communities to Sharia-compliant banking products at an affordable profit rate. He pointed to the potential growth and development of the Islamic finance sector at the local level by building a center of excellence, enhancing coordination in the area of Sharia governance, benefiting more from sukuk and benefiting from the huge growth of the traditional banking sector, which can be channeled into sukuk, asset management, and Sharia-compliant non-banking financing. (QNA)