While both Islamic and conventional lenders around the world experienced a post-Covid-19 boost in 2021, their trajectories in 2022 bifurcated significantly. While the global banking sector as a whole saw a contraction in total assets and profits, the lenders represented in The Banker’s Top Islamic Financial Institutions 2023 experienced a double-digit increase in sharia-compliant assets, with profitability also on the rise.
The disparity between Islamic and conventional asset growth is largely accounted for by the strength of the US dollar versus local currencies throughout much of the world in 2022; this was a problem avoided by banks in Islamic finance’s Gulf Co-operation Council (GCC) heartland, where states’ currency pegs to the greenback kept growth high in dollar terms.
