Mixed signals for Islamic finance in Bahrain

Manama

Islamic finance in Bahrain is having good representation among bank assets, according to Khalid Ferdous Howladar, Global Head-Islamic Finance, Moody’s. He added that 45 per cent of bank assets in Bahrain is served by either standalone Islamic Banks in Bahrain or the Islamic Banking division of regular banks, he added.

Twenty-five pc of the assets is served by standalone Islamic Banks and 15 - 20 pc of the assets by the Islamic finance division of retail banks, he told DT News during the Moody’s Media roundtable held recently at the Bahrain Bourse.

He warned Bahrain Islamic finance sector has suffered reversals in recent times due to their higher exposure to real estate and proprietary investments, in contrast to a more stable period enjoyed by their counterparts in other countries.

Howladar expressed happiness over the recent introduction of a Central Sharia Board in the Kingdom. This will solve one of the major dampener of growth for Islamic finance, namely the different Shari authorities approving the banking and finance products, he added.

“Islamic Finance itself is more complex to understand than the traditional models. And on top of it, the different views among Sharia experts have been creating roadblocks for the sector’s development,” the Moody’s Global Head added.

Moody’s added that globally the assets of Islamic financial institutions are growing at a faster pace than the conventional banks’ assets, albeit from a low base.