Islamic banking has seen remarkable growth in recent decades, establishing itself as a significant player in the global financial sector. Rooted in Sharia law, Islamic banks offer financial services that adhere to the ethical and moral principles of Islam, setting them apart from conventional banks, and their influence extends beyond Muslim-majority countries to Western markets, reflecting their growing global influence.
2023 has been a strong year for Islamic financial institutions, as they have leveraged investments in technology and digital capabilities to drive growth and customer acquisition. Advances in digital banking have helped keep costs under control, and have led to an increase in customer flow from conventional banks to Shariah-compliant institutions, particularly among younger generations seeking halal financing for their businesses and lives. Retail banking remains the cornerstone of most Islamic financial institutions, but many are working to enhance their commercial banking offerings.
Islamic banks’ balance sheets rose by about 8% last year, slightly lower than the previous year’s growth but still higher than conventional banks’ asset growth. The overall health of Islamic banks remains very good, with non-performing loans at about 3%, according to Global Finance magazine.
The total assets of the top 100 Islamic banks amounted to $1.57 trillion, net financing $1 trillion, deposits $1.15 trillion, and net profits reached $24.4 billion. The ranking includes 45 Asian Islamic banks, 42 Islamic banks from the Middle East, 9 European Islamic banks, and 4 African Islamic banks, according to the Tab Insights platform.
An analysis of the performance of the top 10 Islamic banks reveals a diverse geographical representation, with Saudi Arabia, the UAE, Qatar, Kuwait and Malaysia hosting the most prominent players. Middle Eastern banks hold a dominant 71.6% share of the assets of the world’s top 100 Islamic banks, significantly outpacing their Asian counterparts’ 24.3% share, the source said.
The global Islamic finance industry’s total assets continue on an upward growth trajectory, with Standard & Poor’s Global Ratings expecting high growth in 2024 and 2025 after 8% growth in 2023, according to S&P Global.
Top 10 Islamic Banks in the World in 2024
In this report, we will present to you the top 10 Islamic banks in the world in 2024, according to Global Finance Magazine.
1) Kuwait Finance House
Kuwait Finance House (KFH) has been named the world’s best Islamic financial institution by Global Finance magazine, thanks to its innovation in Islamic finance, wide geographical presence and strong financial operations.
KFH is the second largest Islamic bank in the world, serving customers in the Middle East, Asia and Europe through wide distribution channels. It has branches and subsidiaries in Kuwait, Turkey, Egypt, Bahrain, Iraq, Malaysia, the United Kingdom and Germany.
Its total assets reached $124 billion at the end of 2023, as net profit jumped to $2.2 billion from $1.4 billion, with a return on average assets of 1.8%.
KFH maintains its leading position in the field of Islamic corporate banking services. Last year, the group successfully led and arranged Sukuk issuances worth more than $4 billion for a diverse group of issuer clients, including sovereign and corporate issuances across multiple sectors and geographies.
2) Al Rajhi Bank
It is the largest Islamic bank in the world with assets of $216 billion, equivalent to 21.8% of the total assets of banks in Saudi Arabia, and equity of $28 billion. It has branches and subsidiaries in Jordan, Malaysia and Kuwait in addition to its large base in Saudi Arabia. The bank’s corporate and SME financing portfolio increased in 2023 by 20.7% and 22.8% respectively.
Al Rajhi Bank is a pioneer in providing Islamic banking services to individuals, offering extensive expertise in banking services for individuals that are compatible with Islamic Sharia.
It was awarded the Best Islamic Retail Bank award based on its strong performance in retail banking and innovation in its operations.
Al Rajhi dominates the retail finance market in Saudi Arabia with a 41% share, and manages more than 800 million transactions and the largest share of monthly remittances.
3) My Bank
It is the best Islamic bank for SMEs and the best Islamic trade finance provider. It is the largest bank in East Asia by total assets, amounting to more than $67 billion. This Malaysian bank has succeeded in establishing itself as a vital global channel for Shariah-compliant operations in Malaysia, China, Singapore, Indonesia and Brunei.
Malaysia’s Bank Mai Islamic has introduced a “halal ecosystem” for SMEs, through a values-driven digital platform.
It supports business growth, through Islamic supply chain solutions that meet the needs of key customers as well as their suppliers and buyers.
The bank launched the Digital Supplier Financing Program in the fall to facilitate access to financing for suppliers in the ecosystem and promote business growth abroad. As a result, Maybank’s SME financing has seen strong growth over the past few years.
4) CIMB Bank
It is the Islamic banking arm of the CIMB Group, which focuses its operations on the ASEAN region. CIMB Malaysia is the leading Islamic bank in global Sukuk and local currency bonds in the Association of Southeast Asian Nations, with a market share of about 13% in global Sukuk and a market share of 28% in Ringgit (Malaysian local currency) Sukuk.
Last year, it successfully launched the largest US dollar-denominated sukuk issuance by an Asian country, and achieved the narrowest spreads on 5- and 10-year bonds issued by an Asian country for the second year in a row.
Notable issues in which he played a significant role include a $2 billion global sukuk for Indonesia which included a $1 billion green tranche, a $750 million sukuk issued by Khazanah Nasional which was oversubscribed 6 times, and a RM1.5 billion state-guaranteed sukuk for Johor, the first ever state-guaranteed transaction.
5) Abu Dhabi Islamic Bank
Abu Dhabi Islamic Bank has assets of $53 billion in 2024 according to Forbes. It is one of the leading banks in the UAE and one of the largest Islamic banks in the world in terms of assets. The bank currently serves more than 1.3 million customers through a balanced offering that combines a highly personalized customer experience with world-class digital banking services.
Abu Dhabi Islamic Bank has one of the largest distribution networks in the country and internationally, and has a presence in 6 strategic markets: Egypt, Saudi Arabia, the United Kingdom, Qatar, Sudan and Iraq.
It is the best Islamic bank in the field of environmental, social and institutional governance according to the Global Finance classification. As one of the leading Islamic financial institutions in the world, the bank has continued to play a crucial role in promoting sustainable finance in the Arabian Gulf region, facilitating approximately $1.5 billion in sustainable projects in 2023.
6) Sidra Capital
Innovation is happening at a rapid pace in Islamic finance, driving growth and development in this global market. Investment management firms need to continually evolve their products and services to stay ahead of the competition and attract new capital. One of the most prominent companies that proved this last year was Saudi Arabia-based global asset manager Sidra Capital, which was described as the “Most Innovative Islamic Fund Manager” for 2024.
Sidra Capital has launched a series of new ventures in 2023, including its first company, Sidra Asian Opportunities in Singapore. This new company focuses on facilitating cross-border commodity supply chains through fully-funded irrevocable letters of credit, specifically targeting the high demand for solid fuels from selected Indonesian producers.
Last year, it acquired the Eurocap industrial and commercial park in northern France, a property adjacent to the Eurotunnel railway station and comprising 23 buildings on 130 acres, offering a wide range of property options for tenants. It also acquired London Square, an office building in Guildford, UK, for just over £40m.
7) GFH Financial Bank
GFH Financial Group, formerly known as Gulf Finance House, is the best Islamic investment bank according to Global Finance magazine. The Bahrain-based group is distinguished by its product development and offering, having recorded a series of successful deals in 2023, including the launch of the regional healthcare platform Healian.
GFH has significantly expanded its global presence over the past year, and its acquisition of Big Sky Asset Management, a leading US healthcare real estate firm, underscores the group’s focus on attractive global markets.
Big Sky represents the third international asset management company acquired by GFH in recent years, following Roebuck Asset Management and SQ Asset Management, which benefit from strong opportunities in European logistics and US student housing respectively.
GFH also partnered last year with UK-based investment management firm Equitex to invest in Aurora Infrastructure, which operates two major electricity grids in Finland. The group also co-invested in Sabre Power, a profitable, high-growth electrical infrastructure services company based in Houston, USA.
8) Dukhan Islamic Bank Qatar
It is the best private Islamic bank for the year 2024 according to the Global Finance magazine classification, and its total assets amount to 114.2 billion Qatari riyals ($31.33 billion) as of June 30, 2024.
The bank emerged as a result of the successful merger between Barwa Bank and Qatar International Bank in 2019, and emerged as one of the largest Sharia-compliant banking institutions in the country, benefiting from the combined expertise and synergy of two leading financial players under one institution.
Dukhan Bank’s private banking offering focuses on innovative, customer-centric services backed by powerful technology across a comprehensive portfolio of financing, banking and investment products and services for high net worth individuals.
Dukhan Bank is focusing on enhanced digital transformation in particular to attract an older and younger generation of customers.
The bank’s wealth management assets grew by 17% last year, helping to increase its market share.
9) Boubyan Bank
Focuses on retail banking and technology, increasing its market share compared to conventional and Islamic banks in Kuwait, by focusing on creating innovative digital products and services for its customers.
Widely regarded as an innovator with a strong brand and excellent customer service, it has established itself as a leader in catering to the under-30 demographic, helping the $27 billion company grow net income 44% to $254 million last year.
Boubyan Bank is distinguished by its broad commitment to corporate social responsibility, and social initiatives include youth development, developing women-focused products, and integrating social KPIs into employee performance evaluations. The bank is active in humanitarian and charitable causes, including initiatives such as the “Noor Boubyan” campaign, which has succeeded in restoring the eyesight of thousands in several African countries.
10) Kuwaiti Turkish to participate
It is the largest Islamic bank in Turkey with assets of $24 billion, and operates throughout the country, supported by a relatively large branch network.
It has an office in Bahrain that acts as a bridge between Turkey and the GCC countries, and it also runs an Islamic bank in Germany called KT Bank.
Net profit increased by 37% in 2023 to $1.3 billion.
