MALAYSIA RANKS SECOND IN ISLAMIC BANKING MARKET SHARE GROWTH FROM 2000-2024 - STANCHART

KUALA LUMPUR, Nov 26 (Bernama) -- Malaysia recorded a 48 per cent growth in Islamic banking market share between 2000 and 2024, placing the country second only to Saudi Arabia globally, according to a report by Standard Chartered (StanChart).

Islamic banking has evolved from a niche offering to a mainstream financial segment, spanning more than 80 countries and assets exceeding US$5 trillion (US$1=RM4.13), the banking group said in a statement today in conjunction with the release of the report titled “Islamic Banking for Corporates: Broadening Horizons”.

“Yet, ambiguities around what Islamic finance is – its principles, structures, and market dynamics – pose challenges for corporate leaders seeking to engage with or invest in this space, with 65 per cent of corporates indicating interest in Shariah-compliant solutions having no prior background or exposure to Islamic banking,” it added.

StanChart said the report identifies a lack of product familiarity as a key factor restricting corporates from accessing US$5.5 trillion in global Islamic finance assets, which is projected to reach US$7.5 trillion by 2028.

It noted the number of corporate sukuk issuers has nearly doubled since 2020, driving a 38 per cent increase in issuance volumes to US$58.8 billion in 2024.

“Digital innovation is further accelerating this momentum. Tokenised sukuk, blockchain-based settlements, and artificial intelligence-enabled Shariah-compliance tools are set to transform how capital is raised and managed, while reducing issuance costs and improving cross-border governance.

“Regionally, Malaysia is leading in efforts to integrate digital assets into Islamic finance with initiatives like the Digital Asset Innovation Hub and the Malaysia Blockchain Infrastructure,” said Stanchart.

Meanwhile, Standard Chartered Saadiq Malaysia chief executive officer Bilal Parvaiz said Islamic finance has evolved into one of the world’s fastest-growing sources of capital and is being positioned as a mainstream tool to mobilise capital and drive private sector growth.

“The Malaysian government’s strategic focus to build on the nation’s position as a global leader in Islamic finance and environmental, social and governance (ESG) will further enhance access to green and sustainable funding solutions including sukuk to support corporates with their global expansion plans.

“The knowledge gap among corporates on Islamic banking, therefore, represents an exciting opportunity for the Islamic banks,” he said.

-- BERNAMA