HE Dr. Kairat Kelimbetov, Governor, Astana International Financial Centre and Dr. Bello Lawal Danbatta, Secretary-General, IslamicFinancial Services Board launched the report in Kazakhstan.
HE Dr. Kairat Kelimbetov, the Governor of the Astana International Financial Centre (AIFC) officially launched the sixth edition of the Islamic Financial Services Industry (IFSI) Stability Report 2018 at the Astana Islamic Economy Forum on 4 July 2018, in conjunction with the Astana Finance Days on 3 – 5 July 2018 in Astana, Kazakhstan.
The IFSB’s IFSI Stability Report 2018 provides an assessment of key developments and illuminates the status of resilience of various sectors of the global Islamic finance services industry, comprising Islamic banking, Takaful, Sukuk, Islamic funds and equity markets – while highlighting current and emerging challenges to its stability. This is the sixth edition of IFSB IFSI Stability Report, which has been released annually since 2013. Overtime, it has become a benchmark publication on growth, development and stability assessment of the Islamic financial services industry.
Following the launch, the Secretary-General of the IFSB, Dr. Bello Lawal Danbatta highlighted some of the key findings of the 2018 Report, particularly the rising domestic systemic significance of Islamic finance in many key jurisdictions, and in this respect, noted the importance of developing strong legal and regulatory frameworks for effective regulation and supervision in Islamic finance jurisdictions and strengthening its long-term resilience.
The report found that the global IFSI has returned to a robust growth of 8.3 per cent, following two years of growth stagnation. In addition, the IFSI surpassed the $2 trillion mark as of the end of 2017. The growth of the industry in 2017 was actively driven by all three sectors of the IFSI, but with a significant contribution by the performance of the Islamic capital markets boosted by Sukuk issuances from sovereign and multilateral institutions. Improvements were seen in profitability and asset quality of the global Islamic banking sector, with ROA and ROE at their best levels in the last five years and the broader industry non-performing financing continuing to improve. Liquidity conditions have continued to deteriorate, although there is heterogeneity in this trend between countries. While Islamic capital markets marked a strong performance in 2017 on the back of sovereign Sukuk issuances, some underlying weaknesses persisted from the previous year, including those in the corporate Sukuk market. The Takaful sector, given its nascent size, continues to face challenges in the operating environment as a result of stiff competition from larger and more established insurance companies.