Islamic Banking Assets to Reach $7.5 Trillion by 2028 Amid Rising Global Demand
Growing Demand for Shariah-Compliant Solutions
As the global interest in Shariah-compliant financial solutions escalates, a significant gap remains in corporate familiarity with Islamic banking practices. A notable 65% of corporations exploring these options report a lack of prior exposure to Islamic banking, highlighting a crucial barrier to entry.
This knowledge deficiency is recognized as a primary obstacle that prevents businesses from tapping into the estimated $5.5 trillion in global Islamic finance assets. The market is projected to grow to $7.5 trillion by 2028, underscoring the urgency for corporates to bridge this gap.
Corporate Participation in Islamic Finance
The corporate sector’s involvement in Sukuk, an Islamic financial certificate akin to bonds, has nearly doubled since 2020. This has catalyzed a 38% rise in Sukuk issuance volumes, reaching $58.8 billion in 2024.
Khurram Hilal, CEO of Group Islamic Banking at a leading financial institution, emphasized that “Islamic banking has evolved into one of the world’s fastest-growing sources of capital”, yet, the pace of awareness among corporations has not matched this growth. Companies that enhance their capability in Islamic finance can access specialized capital pools that are rich in assets, benefit from preferential pricing in high-demand markets, and earn incentives from governments in developing regions. Furthermore, a strong focus on ESG (Environmental, Social, and Governance) investments presents additional opportunities.
ESG Alignment and Technological Advancements
The alignment of Islamic finance principles with ESG frameworks is becoming increasingly prominent. Both approaches prioritize transparency, fairness, and environmental stewardship. In 2024, sustainable Sukuk was oversubscribed by 4.3 times their issuance value, compared to 3.1 times for conventional Sukuk, indicating a robust demand for financial products that meet both Shariah-compliance and sustainability standards.
Emerging technologies are also transforming the Islamic finance landscape. Advancements such as tokenized Sukuk, blockchain settlements, and AI-driven Shariah compliance tools are reducing issuance costs and improving transparency across borders. These innovations also enhance governance and training frameworks within the sector.
Islamic Banking’s Role in Global Trade
The growing influence of Islamic banking extends to financing the $5.7 trillion South–South trade corridor, which connects regions including the Gulf Cooperation Council (GCC), Southeast Asia, South Asia, and Africa. This corridor now represents nearly a quarter of global trade, indicating Islamic finance’s expanding role in facilitating international commerce.
Opportunities Within the Halal Economy
The Halal economy itself presents a staggering $2.2 trillion opportunity as corporates increasingly turn to Islamic trade finance and supply-chain solutions. Innovative products like Halal360 from leading banks are gaining traction, providing comprehensive solutions tailored to this market segment.
Operating a global Islamic banking franchise across more than 30 markets, the institution has successfully arranged over $200 billion in Islamic financing. This encompasses a diverse array of solutions including Sukuk, structured trade, and sustainable financing options.
Khurram Hilal remarked, “Islamic finance is now a strategic conversation in boardrooms,” emphasizing the institution’s role in connecting corporate interests with the necessary expertise. This enables global corporations to implement practical and cross-border Shariah-compliant banking solutions that align with their strategic objectives.
Published on 1762266446 • Category: Banking & Finance,News,Islamic banking,Islamic Finance,Standard Chartered,Standard Chartered Bank
