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Islamic banking' market share in GCC to hit 30% in medium term - S&P [IntelliNews - Weekly Reports](IntelliNews - Weekly Reports Via Acquire Media NewsEdge) The GCC's Islamic banks market share will likely keep increasing over the next few years, within a supportive operating environment, to reach 30% over the next five to six years from the current 25%, Standard & Poor's said in a statement. Qatar, Saudi Arabia, and the United Arab Emirates offer the "brightest growth opportunities in the GCC, which as a whole is showing robust recovery since the 2008 global financial and economic crisis," S&P underscored. Islamic banks' asset quality metrics, moreover, continue to improve as the banks capitalise on strengthening corporate asset quality in the region. Islamic banks' profits, however, remain dented by strong performance of conventional banks, S&P noted. "The generally solid market positions of many conventional banks will likely prevent Islamic banks from scoring stronger market share gains," the ratings agency said. S&P also noted that as both Islamic and conventional banks operate under favourable economic conditions in the GCC and they imply similar lending concentrations, Islamic banks' profitability will thus remain largely stable and continue to progressively converge with that of conventional banks. S&P forecasts that total credit stock in the GCC banking system will increase by around 10% annually in 2014 and 2015 as banks benefit from the region's strong economic growth prospects, recovering corporate asset quality, and ample financing opportunities. Islamic banks will reportedly continue to grow faster in the next couple of years than their conventional peers. Islamic banks in Qatar and Saudi Arabia will likely grow the fastest as domestic credit will increase the most, according to S&P. The GCC region boasts one of the world's largest Islamic banking markets and enjoys healthy performance metrics, S&P noted. The governments support to the sector should reportedly help Islamic banks keep boosting their market share. The operating environment in the GCC over the next two years will also continue to underpin Islamic banks' business profiles and credit quality. (c) 2014 Emerging Markets Direct Media Holdings LLC Provided by SyndiGate Media Inc. (Syndigate.info). |