He Central Bank of the United Arab Emirates (CBUAE) has issued the UAE Islamic Finance Report 2023 highlighting the sustainable Islamic finance efforts of Islamic Financial Institutions (IFIs) across the UAE. The report coincides with that of the UAE Year of Sustainability and its recent celebration of COP28.
The report analyzes the performance of various Islamic finance sectors, initiatives and activities globally and locally, with a specific focus on sustainability. The report also provides an overview of the Shari’ah legislative, regulatory and governance landscape, in addition to an assessment of the sustainability strategies adopted by IFIs, as well as the opportunities and challenges they face.
In the opening message of the report, Khaled Mohamed Balama, Governor of CBUAE, emphasized that the development of the Islamic financial sector is critical to the sustainable growth of the UAE and the achievement of sustainable development goals, in line with the vision of the country’s leaders.
He also noted that the Islamic banking sector has become an integral part of the UAE financial industry, and will account for 23 percent of total banking assets within the UAE in 2022, equivalent to AED 845 billion. Meanwhile, Islamic windows, in addition to the takaful market and sukuk issuances, account for 25 percent of total Islamic banking assets in the UAE, equivalent to AED 214 billion.
“Islamic banks play a crucial role in developing and providing sustainable finance and meeting the sustainability objectives of the broader financial sector, in accordance with the UAE’s regulatory, supervisory and risk management directives. “This is further reinforced by the issuance of the Guiding Principles on Sustainability in Islamic Financial Institutions by the Higher Shari’ah Authority.”
“We will continue our efforts to support the development of the Islamic and sustainable finance sectors in the UAE to enhance their stature and share within the broader industry.”
The report also presents key statistics and indicators on the UAE’s Islamic financial landscape. Chief among them is the presence of eight independent Islamic banks, 16 Islamic banking windows of conventional banks and nine Islamic finance companies operating in the UAE.
The report also highlights the presence of 10 takaful insurance companies with total gross written contributions amounting to AED 4 billion in 2022, while the value of sukuk outstanding stood at AED 217 billion in the first half of 2023.
News source: Emirates News Agency