Resilience of Islamic Banking in Malaysia

Post courtesy TalkBack in Deloitte’s Islamic Finance Knowledge Centre
Written by: David Vicary

Mushtaq Parker, in last week’s Arab News, published an excellent article on the above topic. He outlined how increasing profitability had allowed Islamic Banking institutions to provide very competitive returns to their depositors, thereby allowing them to continue to attract deposits. More than half of these deposits are based on the concept of profit-sharing and loss bearing.

Total deposits and financing are now in excess of 22% of total banking assets, which exceeds the target set in the Financial Sector Master plan of 20% of market share by the end of 2010. Not a bad effort at all considering that the industry has only been going since 1983, with the creation of Bank Islam. Indeed, Malaysia remains the global leader for sukuk issuance, capturing 66% of the total sukuk outstanding at the end of 2010 and included the issuance of 4 foreign currency denominated sukuk during 2010.

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2 thoughts on “Resilience of Islamic Banking in Malaysia

  1. Joy, thank you for sharing this feature as it reflects upoon the thoughtful and productive growth plan that Malaysian banks have adopted.


    1. Hi Michael,

      Here’s what David had to say with regards to your comments:
      “Many thanks for your constructive comments. It will be interesting to see, in coming months, how determined the GCC is to follow Malaysia’s lead”


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