Islamic financial institutions earn good returns, profit
By GFMG
Its enlarged assets bases in the Middle East, Africa and Asia have earned the Islamic financial institutions (IFIs) good earnings in 2019 with 20 per cent net profit.
Winners of Global Finance’s 2020 Islamic Finance Awards achieved improved financial performance together with a widened product portfolio, enhanced service, technology investment and growth in their banking and market reach.
The Islamic banks recorded increased net profit of 20% in 2019; and their average return on assets was a healthy 1.9%.
Margins remain wider than at conventional banks, supported by a low-cost deposit-funding base. IFIs’ expense bases are efficient, with sound cost-to-income ratios.
Consolidation and mergers within the Islamic financing industry remain a key theme. Early this year, Global Finance’s winner as Best Islamic Project Finance Provider, Dubai Islamic Bank, acquired Noor Bank.
It is expected that consolidation between Islamic banks will continue over the next few years as institutions seek to maintain a competitive position and further rationalize their operating cost base.
The Islamic sukuk (bond) market was stronger in 2019, with global issuance rising 26%; key markets in the Gulf Cooperation Council area and Malaysia were strong.
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