The traditional system of Islamic finance based on the principles of Sharia emerged as recently as in the 1970s. From being a concept popular only in the countries with Muslim-majority population, such as the Middle East and Malaysia in the 1980s and the 1990s, Islamic finance has expanded significantly in size and presence over the past decade. More particularly for the GCC region, a variety of factors have contributed in the growth of Islamic finance industry like growing GDP, improving economic environment, increasing oil prices, rising middle class society, the perception of Islamic finance being a relatively ‘risk-averse’ system and most importantly increased awareness of the concept of Islamic Finance. In this report we provide details about the size and growth of the GCC Islamic finance industry along with Global Islamic Finance Industry. The report includes performance of key GCC Islamic finance institutions. The report provides details of GCC region wise split, trends and outlook for individual segments of GCC Islamic Finance like Islamic Banking, Sukuk, Takaful and Islamic Mutual Funds. The report also discusses some other types of GCC Islamic Finance Products, growth drivers for GCC Islamic Finance, regulatory framework and challenges for GCC Islamic finance. For Full report, visit: http://www.e-marmore.com/offerstores/gcc-islamic-finance/66/1/2067/

1. Markaz Sector Reports 2013
GCC Islamic Finance
An industry growing beyond niche
Research Highlights:
Analyzing the Islamic Finance Industry with focus Islamic
Banking, Sukuk (Islamic Bonds), Islamic Mutual Funds and
Takaful (Islamic Insurance) domains, discussing the growth
drivers, regulations, challenges and future outlook for the
industry

2. MARKAZ SECTOR RESEARCH
GCC Islamic Finance - October 2013
Kuwait Financial Centre K.P.S.C “Markaz” 2
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3. MARKAZ SECTOR RESEARCH
GCC Islamic Finance - October 2013
Kuwait Financial Centre K.P.S.C “Markaz” 3
Table of Contents
1. Executive Summary................................................................................... 6
2. Overview of Islamic Finance ..................................................................... 8
Principles of Islamic Finance .............................................................................. 8
Benefits and critics of Islamic Finance ...............................................................10
Tax regulation for Islamic Financial Transactions................................................11
3. Industry size and growth ........................................................................ 13
Growth of Islamic Finance globally....................................................................13
Growth and Size of Islamic Finance Industry in the GCC .....................................16
4. Performance of Key Islamic Finance Institutions in the GCC .................. 18
Islamic Banks..................................................................................................18
Islamic Insurance Companies ...........................................................................21
Islamic Investment Firms .................................................................................23
5. Trends and Potential for Islamic Banking ............................................... 26
Introduction....................................................................................................26
Size of Islamic Banking ....................................................................................26
Challenges for Islamic Banking .........................................................................28
Outlook for Islamic Banking..............................................................................29
6. Trends and Potential for Sukuk............................................................... 32
Introduction....................................................................................................32
Size of Sukuk Issuance.....................................................................................32
Challenges ......................................................................................................35
Outlook ..........................................................................................................36
7. Trends and Potential for Takaful (Insurance) ......................................... 37
Size................................................................................................................38
Challenges ......................................................................................................39
Outlook ..........................................................................................................40

4. MARKAZ SECTOR RESEARCH
GCC Islamic Finance - October 2013
Kuwait Financial Centre K.P.S.C “Markaz” 4
8. Islamic Mutual Funds .............................................................................. 42
Structure ........................................................................................................42
Size................................................................................................................42
Challenges ......................................................................................................44
Outlook ..........................................................................................................45
9. Other Islamic Finance Products .............................................................. 46
Sharia compliant project finance .......................................................................46
Islamic Real-Estate Financing ...........................................................................48
Sharia compliant consumer credit options..........................................................50
10. Growth Drivers for the GCC Islamic Finance ........................................... 52
11. Regulatory Framework for Islamic Financial Institutions in the GCC ..... 57
12. Challenges for Islamic Finance in the GCC ............................................. 64
13. Opportunities in Islamic finance ............................................................. 70
14. Appendix ................................................................................................. 72

5. MARKAZ SECTOR RESEARCH
GCC Islamic Finance - October 2013
Kuwait Financial Centre K.P.S.C “Markaz” 5
Tables and Charts
Tables Charts
3.1
Distribution of Islamic assets by country and sector (USD
Bn), 2011
2.1 Basic Principles of Islamic Finance
4.1 Performance of Key Islamic Banks in the GCC 3.1 Growth in size of global Islamic assets by sector (USD bn)
4.2 Performance of Key Islamic Insurance Companies in the GCC 3.2 Distribution of global Islamic assets, 2011
4.3 Performance of Key Islamic Investment Firms in the GCC 3.3 Global Islamic Finance assets by sector, 2012
6.1 Region Wise Sukuk Issuances in the GCC Market (in USD Bn) 3.4 GCC Islamic Finance Industry growth by sector (in USD bn)
6.2
Region Wise Sukuk Issuances in the GCC Market (Number of
Issues per region)
3.5 Share of Islamic Finance Industry in the GCC, 2011
7.2
Region Wise Expected Growth of Takaful Insurance
Premiums in the GCC (in USD Mn)
3.6
Composition of the Islamic Finance Industry in the GCC (in
2011)
8.1
GCC Islamic Funds Number of Funds by Mandate Coverage
and Asset Class, 2011
5.1 Overview of Profit Mechanism in Islamic Banking
8.2
GCC Islamic Funds AUM by Mandate Coverage and Asset
Class, 2011
5.2
Comparison of the Islamic Banking Industry in the GCC and the
World (in USD Bn)
14.1 Growth Rate Matrix based on Co-relation values 5.3
Region wise split of Islamic Banking Assets in the GCC (2012)
(USD Bn)
14.2 Growth Rate Matrix based on Co-relation values 5.4
Expected Growth of the Islamic Banking Industry in the GCC (in
USD Bn)
14.3 Differences between Conventional and Islamic Banking 5.5 Banking Asset Outgrowth
14.4 Classification of banks 5.6 Cost Income Ratio
14.5 List of Islamic Banks in GCC 6.1 Structure of Ijarah Sukuk
14.6 List of insurance Companies in GCC 6.2 Sukuk Issuances across GCC and World (in USD Bn)
14.7 List of Investment Firms in GCC 6.3 Split up of Global Outstanding Sukuk Market
6.4
Expected Growth of the Sukuk Issuances in the GCC (in USD
Bn)
7.1
Simplified form of Takaful based on Mudharabah and Wakalah
Models
7.2
Expected Growth of Takaful Insurance Premiums in the GCC (in
USD Bn)
8.1
Global Assets under Management (AUM) of Islamic Funds (in
BUSD)
9.1 Structure of Islamic REITs
10.1 Market-share of foreign banks in the GCC (as % of total assets)
10.2 GDP growths by Country
11.1
Corporate Governance Structure for Islamic Financial
Institutions
12.1 Average Size of Assets (2010, USD Bn)
12.2 Stock Market Capitalization in Trillion USD
12.3 Top 20 Scholars based on Overall Positions

6. MARKAZ SECTOR RESEARCH
GCC Islamic Finance - October 2013
Kuwait Financial Centre K.P.S.C “Markaz” 6
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