Menu

Search

Menu

Search

Fitch: Islamic Finance in Malaysia: An Evolved Sector

Malaysia is leading the global Islamic finance industry in terms of regulation, standardisation and sukuk issuance, representing more than half of issuance worldwide in 2015, Fitch Ratings says in a new report.

Malaysia's Islamic bank financing reached MYR390bn as of end-2015, equal to 27% of its banking-system loans (2014: 25.0%). Islamic financing expanded 16.2% in 2015 (conventional banking system: 5.2%), and has had a compound annual growth rate (CAGR) of 18.2% since 2011, against conventional banks' average of 7.0%. Islamic finance adheres to banking rules as laid out by the sharia, or Islamic law, and includes tenets such as prohibiting usury.

The Malaysian Islamic banking system's impaired loan ratio remained stable at 1.2% in 2015 (conventional banking system: 1.7%), while the segment's provision coverage (impairment reserves as a proportion of gross loans) remained lower than that for conventional banks. The Islamic banking system's Core Equity Tier 1 (CET1) and Tier 1 ratios were broadly comparable with that of the aggregate banking system.

Fitch sees the implementation of the Islamic Financial Services Act 2013 (IFSA 2013) as a key development that enhances the regulatory and supervisory framework of Malaysia's Islamic financial industry, adding transparency and clarity on issues.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

2019-03-18 07:01:54
0m
2019-03-18 07:01:36
0m
2019-03-18 07:01:09
0m
2019-03-18 07:00:56
0m

March 19 07:00 UTC Released

CHTrade

Actual

3125 Mln CH

Forecast

Previous

3043 Mln CH

March 19 00:30 UTC Released

AUHome Price Index*

Actual

-2.4 %

Forecast

-2 %

Previous

-1.5 %

January 31 00:00 UTC 594536594536m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 594536594536m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 606356606356m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 594536594536m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 606356606356m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 594536594536m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 594536594536m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 594536594536m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.