By the end of March 2024, the value of transactions in Egypt’s Islamic banking sector reached EGP 701 billion ($14.51 billion), a 28.8 percent annual increase. The latest report from the Egyptian Islamic Finance Association (EIFA) also reveals that the value of deposits in Islamic banks rose 23.5 percent from $8.56 billion in March 2023 to $10.56 billion in March 2024.
Meanwhile, Islamic financing saw a 33.8 percent increase to $11.92 billion, amounting to 5.4 percent of Egypt’s total loan portfolio across all banks.
Islamic banking’s market share
The EIFA report reveals that Egypt’s banking sector hosts 14 banks licensed by the Central Bank of Egypt (CBE) to offer Islamic financial products. In addition, 11 banks have both Islamic banking branches alongside traditional ones.
By the end of March 2024, the number of Islamic bank branches grew to 264 serving around four million customers. Therefore, Islamic banking now constitutes 5 percent of the overall banking sector in Egypt.
Top Islamic banks in Egypt
Notably, a previous quarterly report from EIFA reveals that the volume of sukuk issuance in Egypt amounted to $1.71 billion by the end of 2023. The report also highlighted the Islamic banking sector’s top performers, which include Faisal Islamic Bank of Egypt with a market share of 31 percent and a turnover volume of $4.49 billion.
In second place comes Abu Dhabi Islamic Bank with a turnover of $3.93 billion and a market share of 17.1 percent. Banque Misr’s Islamic branches ranked third, taking 19 percent of the market with a turnover of $2.75 billion. Following closely came Al Baraka Bank in 4th place with 16.1 percent of the market at a turnover of $2.34 billion. Finally, United Bank of Egypt ranks 5th with a turnover of $330 million and a market share of 2.2 percent.
Global Islamic banking sector’s outlook
Growth in the Islamic banking sector is not particular to Egypt alone. According to data from the Al Huda Center of Islamic Banking and Economics, global Islamic banking assets are set to reach $5 trillion by 2025.
Another report by the Islamic Corporation for the Development of the Private Sector (ICD) and the London Stock Exchange Group (LSEG) reveals that the Islamic banking sector’s assets reached a record $4.5 trillion in 2022, an 11 percent annual increase. Global ESG sukuk reached a record $8.4 billion in 2022, with Islamic ESG funds amounting to $6.6 billion in value outstanding.
S&P Global also expects sukuk issuances to hover between $160 billion and $170 billion in 2024, furthering the industry’s asset growth in 2024. The sukuk market has also started 2024 strong, with total issuance reaching $46.8 billion by March 31, 2024, compared to $38.2 billion at the end of March 2023.
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