The year 2014 was a defining one for Islamic finance. For the first time since The Banker's Top Islamic Financial Institutions survey began nine years ago, the industry’s total assets moved into negative growth territory. After years of double-digit growth from the 2007 rankings to year end 2013 (with a compound annual growth rate [CAGR] of 15.73%) and single-digit growth in the 2014 ranking of 9.81%, in the 2015 ranking total banking assets fell 8.48%.
That said, the Islamic finance market still commands an asset CAGR of 12.68% across the nine years of The Banker rankings. And an in-depth analysis of Islamic finance over the past year reveals that this decline can be attributed to a consolidation in some markets, new regulatory changes, market saturation in highly banked economies and the exchange rate differential of several local currencies.
