Moody’s Ratings has projected that the profitability of Islamic banks in Gulf Cooperation Council (GCC) countries will remain strong over the next 12 to 18 months, outperforming its commercial counterparts.
In its latest report, Moody’s attributed this continued strong profitability to robust commercial activity, spurred by government initiatives to diversify economies across the GCC.
Moreover, the report highlighted the growing demand for Sharia-compliant products, which is set to lead banks to maintain strong capital and liquidity. Additionally, the report anticipates further growth through mergers aimed at enhancing revenue generation and reducing costs.
Badis Shubailat, Assistant Vice President and Analyst at Moody’s, stated that sustained economic growth, government commitment to bolstering the Islamic finance sector, and the rising demand for Sharia-compliant products will continue to propel the growth of Islamic finance in the GCC, outpacing conventional banking.
