Asia-Pacific Islamic banks can expect steady expansion and broadly stable asset quality in the next few years, according to S&P Global Ratings.
“We expect financing growth to remain favorable for Islamic banks in Asia-Pacific over the next few years,” said S&P Global Ratings credit analyst Nikita Anand. “That’s thanks to stable economic conditions in the core Islamic banking markets of Malaysia and Indonesia.”
It said Malaysia would remain the biggest Islamic banking market in Asia-Pacific, with about two-thirds of the sector’s total assets of about $400 billion.
“The launch of new Islamic banks in Malaysia and other Asia-Pacific markets this year could improve access to financial services for underserved regions and segments, such as small businesses,” said Anand.