Islamic banks are already on par with the conventional in Malaysia/Bloombergby Bloomberg
The Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) said that Malaysia can expect half of its banking assets to be Islamic by 2030 as the industry’s growth outpaces conventional banking.
Adissadikin Ali, President of AIBIM, said that loans that are Shari’ah compliant are set to increase by 10 per cent to 15 per cent annually over the next five years, outpacing the five to seven per cent growth seen for non-Islamic loans.
“The name of the game in Islamic finance is differentiation, consumers are becoming more familiar with Shari'ah-compliant products and the industry is focusing on values-based financing, which calls for protecting people and the planet, will help spur demand amid growing interest in ethical investing,” said Ali.
According to Bank Negara Malaysia, that proportion has only reached 31 per cent as of 2018, equivalent to MYR 916.7 billion ($224 billion).
Adissadikin Ali, the Chief Executive Officer at RHB Islamic Bank, said that the signs can be seen in the nation’s largest banks, with Malayan Bank’s Islamic loans accounting for 61 per cent of the total and RHB Bank’s ratio rising to 38 per cent, from 26 per cent in 2017.
“Islamic banks are already on par with the conventional in Malaysia, what you see in conventional, you can see in Islamic,” said Adissadikin.