DUBAI - Islamic financial institutions have made vast progress in recent years, with average year-on-year growth of some 20 percent, the United Arab Emirates (UAE) minister of state for financial and industrial affairs said Sunday.
"A report released by the Islamic Development Bank in Jeddah said Islamic banks would manage 40 to 50 percent of global Islamic savings within the next 10 years," Mohammad Khalfan bin Khirbash told the opening of an International Islamic Forum.
"I see no reason to dispute this and believe it is an accurate reflection of trends we are seeing develop in the sector," he added.
Islamic banking combines modern banking principles with Islamic laws that are against interest payments.
Bin Khirbash, who is also chairman of the Dubai Islamic Bank, said the success of Islamic financial institutions and banks had gone beyond the Gulf region into the international market.
"Now we are seeing even the biggest and most prestigious international banks in the world offering some form of Islamic service in response to the tremendous growth of the sector," he said.
Bin Khirbash said the value of Islamic issues in the Gulf Arab states neared four billion dollars in 2004. "The contribution of non-Islamic institutions to such issues approached 60 percent of the total," he said.
The Bahrain-based General Council of Islamic Banks and Financial Institutions said last year the assets of Islamic banks had grown from 22.5 billion dollars in 1998 to 49.5 billion dollars in 2003.
There are more than 265 Islamic financial institutions in the world with capitalisation in excess of 13 billion dollars and assets under management of over 262 billion dollars, according to figures from the Union of Arab Banks.
Their financial investments exceed 400 billion dollars and deposits are in excess of 202 billion dollars.
More than 600 organisations from 50 countries are attending the three-day forum in Dubai.
03/13/2005 15:16 GMT