Perhaps the biggest questions facing the Islamic finance industry are: can the ever-increasing rate of growth be sustained? And will all sharia-compliant institutions be viable?
Like the complex nature of Islamic finance, the answer to these questions is equally complex, as national economies fluctuate with numerous variables beyond the controls of the banking sector. However, one thing is clear: barring any significant downturn in the Middle East markets, strong growth in the industry is likely to continue. At the microeconomic level, the viability of individual institutions is also unknown as the competitive boundaries are also in the process of redefinition. The market for Islamic banking has begun to consolidate in several markets as key urban centres reach a saturation point, as seen by the recent merger between Emirates Bank and the National Bank of Dubai.
