Group Chief Financial Officer at Kuwait Finance House (KFH), Shadi Zahran said that in the last decade, the global Islamic financial services industry (IFSI) has achieved double digit annual growth and the future of Islamic financial services institutions look promising with strong growth potential mainly in emerging markets.
Zahran’s statement was made during his participation as a Guest Speaker in Moody’s Investors Services webinar themed “Global Islamic Financial Institutions Outlook” – How Islamic FIs’ growth and financial performance compare with conventional peers.
He added that during COVID -19 Pandemic, both conventional and Islamic banks focused on preserving asset quality, protecting capital and maintaining liquidity rather than business expansion which negatively impacted credit growth and revenues. However, based on the reported results of Islamic banks it was noted that most Islamic Banks managed to weather the pandemic better than the conventional banks. Technological innovation and digitization to drive operational efficiency and customer penetration besides leveraging on natural alignment between Islamic Sharia and ESG principles can help accelerate growth of IFSI.
With regards to Takaful and Asset Under Management AUM industry, Zahran explained that although these constitute a very small proportion of IFSI, however these are on the rise due to growing demand for Sharia compliant takaful and investments.
Responding to a question on growth potential of Islamic Banking in Turkey, Zahran pointed out that Islamic banks in Turkey represent only 7% of total banking sector and Turkey economy is real economy and well diversified with huge SMEs businesses. The growth was always double digit and the potential for Islamic Banks in Turkey is expected to maintain same positive trend. He also highlighted importance of digital banking and how it has contributed to KFH Turkey especially during COVID-19.
Moreover, Zahran shared, during the webinar, his views and thoughts on outlook of Islamic financial institutions including banking, asset management and takaful, how COVID-19 pandemic has affected Islamic Financial Institutions compared to conventional banks, growth prospects for Islamic and conventional asset managers and performance of takaful companies and impact of new regulations and digitalization on the industry.
KFH’s participation in Moody’s webinar and similar events underlines its role and commitment to contributing and enriching international economic and financial conferences, in addition to promoting Islamic financial services, as well as viewing the latest economic developments and discussing the current landscape of Islamic banking and its future trends and the challenges of the pandemic with analysts and industry experts.