Islamic Banking To Grow By 18 Pct Yoy To US$296.26 Bln By 2019

KUALA LUMPUR, July 1 (Bernama) -- Malaysia's Islamic banking sector is expected to grow at an average rate of 18 per cent year-on-year (yoy) in the next five years to US$296.26 billion by 2019 compared with US$141.77 billion in 2013. The Islamic Research and Training Institute (IRTI) Director-General, Professor Dr Mohamad Azmi Omar, said the target was achievable underpinned by the increase in corporate financing and sukuk issuances. "This projected growth can be achieved if sustained favourable market conditions are met," he said in his speech at the launch of Malaysia Islamic Finance Report 2015 here Tuesday. Mohamad Azmi said Malaysia, a global leader in the Islamic economy, has built its Islamic finance capabilities beyond its domestic market and was playing a key role in providing Islamic finance expertise throughout ASEAN and the Far Eastern countries. Malaysia's Central Bank Deputy Governor, Muhammad Ibrahim, launched the Malaysia Islamic Finance Report 2015 Tuesday. The report projects takaful contributions to grow at an average rate of 18.2 per cent yoy to reach a market share of 18 per cent of total insurance premiums by 2019, amounting to US$5.51 billion, from 10 per cent in 2013 at US$2.02 billion. Malaysia is the world's biggest sukuk market, constituting 67 per cent of global outstanding sukuk. Total Malaysia sukuk issued in 2014 was US$77 billion, representing a fall of 6.5 per cent from of the total sukuk issuance in Malaysia in 2013, largely due to the drop in the value of ringgit, said the report. In ringgit terms, the report said, Malaysian sukuk increased by 1.6 per cent to US$69.78 billion (RM260.87 billion) in 2014 compared with US$68.64 billion (RM256.63 billion) in 2013. (US$1 = RM3.73) CIMB Islamic Bank Bhd Executive Director and Chief Executive Officer Badlisyah Abdul Ghani, said the uptrend was likely to continue this year, led by infrastructure financing. "We have done a lot and we have achieved a lot in the sukuk space or the capital market as a whole, both equity and debt. "In order to maintain and sustain our position as number one in Islamic financial market, we have to do more in banking and takaful space to complement the strength of our Islamic capital market," said Badlisyah. The report said global sukuk issuance level felt short of 2013's despite initial positive outlook and new countries making their debut such as the UK, Hong Kong and South Africa. It also outlined several challenges, including the need for Malaysia to be prepared to face growing and emerging competition from regional and global players that are investing heavily in Islamic finance. The report was done in strategic partnership with CIMB Islamic, Thomson Reuters and the General Council for Islamic Banks and Financial Institutions and IRTI. -- BERNAMA