Qatar’s Islamic Finance Assets Reach QR656bn in 2023, Reports Bait Al Mashura

Islamic finance assets in Qatar experienced significant growth in 2023, rising by 3.3% year-on-year to reach QR656 billion, according to a recent report by Bait Al Mashura, a leading Shariah-compliant financial consultancy. This remarkable increase highlights the robust expansion of Qatar’s Islamic financial sector, which encompasses various components such as Islamic banks, takaful (Islamic insurance) companies, Islamic finance firms, and investment companies.

Islamic Banks Lead the Growth

Islamic banks in Qatar were the primary drivers of this growth, accounting for a substantial 87.6% of the total Islamic finance assets. Their assets grew by 3.6% to QR563.7 billion, with financing seeing a modest increase of 0.6% to QR382.7 billion. This steady growth underscores the resilience and stability of Islamic banking in Qatar.

“The continuous expansion and accelerated development of the Islamic finance sector, particularly in new ecosystems, hold several promising prospects for future growth,” noted Prof. Khalid bin Ibrahim al-Sulaiti, vice-chairman of Bait Al Mashura.

Sukuk and Other Islamic Finance Products

Sukuk, the Islamic equivalent of bonds, also saw significant growth. The value of sukuk issued by Islamic banks surged by an impressive 86.6% to QR4.2 billion. Additionally, sukuk issued by the Qatar Central Bank increased by 42.8% year-on-year, reaching QR7.7 billion. These figures reflect the increasing appeal of sukuk as a preferred investment vehicle within the Islamic finance framework.

Performance of Takaful and Finance Companies

The takaful sector, representing Islamic insurance, faced some challenges in 2023. The total assets of takaful insurers fell by 5.9% to QR4.2 billion, and policyholders’ assets decreased by 3.6% to QR2.2 billion. However, insurance subscriptions saw a positive increase of 8.8%, amounting to over QR1.4 billion.

Islamic finance companies witnessed a slight increase in assets by 0.8%, totaling QR2.5 billion. Financing provided by these companies grew by 4.8% to QR1.8 billion, while their revenues rose by 7.7% to QR241.8 million.

Islamic Investment Companies and Funds

Islamic investment companies in Qatar also reported growth. The assets of these companies increased by 2.7% to QR522.3 million, although their revenues dropped by 33.5% to QR41.4 million, resulting in profits of QR5.9 million for the year.

Islamic investment funds saw their assets surpass QR942 million, marking a 4.1% increase. The performance of these funds varied throughout the year, reflecting the dynamic nature of the investment landscape.

Stock Market Performance

In the Qatar Stock Exchange (QSE), the Al Rayan Islamic Index recorded a 3.76% increase. The performance of shares in listed Islamic finance companies fluctuated, with some experiencing gains of up to 29%, while others saw declines of up to 16%.

Macroeconomic Impact

At the macroeconomic level, Qatar’s economy returned to its typical growth trajectory in 2023, buoyed by modern infrastructure and a thriving tourism sector. The Qatari economy grew by an estimated 1.8%, supported by the expansion of the North Field, which led to a financial surplus and enhanced services across various sectors, including logistics, industry, trade, and finance.

The robust growth of Islamic finance assets in Qatar underscores the sector’s vital role in the nation’s economic landscape. As Islamic banking and finance continue to evolve and expand, Qatar is well-positioned to leverage these developments for sustained economic prosperity.