K Ramanathan

KUALA LUMPUR: Globally, the Islamic banking sector is expected to outperform conventional banks in the medium-term, said Central Bank of Bahrain executive director for banking supervision Khalid Hamad.

He said Islamic banking is emerging from a period of profit stagnation that was due mainly to the global economic uncertainties of the past decade despite its growing market.

“For years, many Islamic banks have witnessed doubledigit growth rates, surpassing their conventional peers. However, the political as well as economic instability have dragged most of the small Islamic banks especially in the Gulf Cooperation Council (GCC) to struggle,” he told The Malaysian Reserve during the 20th World Islamic Banking Conference held in Bahrain yesterday.

Khalid said the Islamic banking sector is expected to surpass the growth of conventional banks driven by the variety of Islamic products to be introduced in the market.

He said Malaysia is playing a significant role in boosting the Islamic banking sector not only in the Asean region, but also on a global scale.

“Malaysia has always been our best partner in promoting Islamic banking. In fact, Malaysia is a member in our International Islamic Finance Market organisation which is designed to construct and develop regulatory framework and standards for sector,” he said.

Among the Malaysian banks that have a strong foothold in Bahrain are Malayan Banking Bhd and CIMB Bank Bhd.

This content is provided by FMT content provider The Malaysian Reserve