Qatari Islamic finance assets up 20% to QR629bn in 2021

June 28, 2022

Doha: Islamic finance assets in Qatar grew by 20 percent to QR629bn ($172bn) in 2021, with Islamic banks accounting for 87 percent of these assets, followed by Islamic Sukuk (11.6 percent), Takaful insurance companies (0.8 percent), and the remaining share distributed to investment funds and other Islamic financial institutions, according to the Islamic Finance Report 2021.

Bait Al Mashura Financial Consulting Company released its fifth annual report on Islamic finance in Qatar, which discusses the results of the activities of Islamic financial institutions for the year 2021.

The report noted that the rise in Islamic finance assets in Qatar last year was mainly a result of the increase in the size of Islamic banks’ assets after the successful merger between Masraf Al Rayan and Al Khaliji.

In the Islamic banking sector, the assets of Qatari Islamic banks grew by 12.6 percent to QR507.4bn. Deposits with Islamic banks jumped by 17.5 percent; the private sector deposits represented 54 percent and financings increased by 8.7 percent, directed more towards the government sectors, real estate, and personal finance. Revenues of Islamic banks also rose by 2.6 percent, with profits amounting to approximately QR7.5bn, with a growth rate of 10.7 percent.

In the Takaful insurance sector, the assets of insurance policyholders stood at QR2.3bn, with a growth rate of 4.4 percent, while insurance contributions reached QR1.4bn, an increase of 7.4 percent. Insurance surpluses amounted to about QR113m.

Meanwhile, assets in Islamic finance companies amounted to QR2.5bn, showing a decline of 3.6 percent, with finance decreased by 8 percent. Revenues reached QR220m, showing a decrease of 9.2 percent. Finance and investment constitute 96 percent of the total revenues.

The results of Islamic finance companies’ business varied between achieving total profits exceeding QR117m and incurring losses amounting to approximately QR7m.

In the field of Islamic Sukuk, and with the resumption of the Qatar Central Bank (QCB) issuing government Sukuk, the issued Sukuk (government and Islamic bank Sukuk) amounted to QR10.38bn, with a growth rate of 30.2 percent, of which government Sukuk constituted 73.7 percent of the total issued Sukuk.

According to the available data on Islamic investment funds, the assets of these funds amounted to QR862m, with a growth rate of 5.8 percent, and their performance was uneven during 2021.

On the Qatar Stock Exchange, Al Rayan Islamic Index achieved a positive performance, closing at a rise of 10.48 percent. Qatari Islamic finance companies achieved a positive performance in 2021, with annual collective gains for Islamic shares ranging between 1.8 percent and 89.7 percent.

According to Dr. Khalid bin Ibrahim Al Sulaiti (pictured), Vice-Chairman of the Board of Directors of Bait Al Mashura Finance Consultations, there is high demand for Qatari Islamic finance products and services locally and globally.

He added: “We, at Bait Al Mashura, are proud to be an active member in the process of Islamic finance in Qatar and the world, which is witnessing a remarkable increase in demand for its services and products, as we are keen to provide knowledge and professional support to the Islamic financial industry to serve our local community, and all researchers and those interested in the Islamic finance sector in Qatar”.

Al Sulaiti also stressed that Islamic finance emerged as a corrective and developmental idea that addresses the issue of money and its development within the framework of a good Shariah environment.

He added that the Islamic Finance Report in Qatar 2021 showed that with the emergence of COVID-19, escalation of inflation, and the continuation of some of the repercussions of the pandemic, economic recovery varied among world countries. In Qatar, the taken preventive and economic measures, as well as the spread of vaccines among residents, and the improvement in demand for oil and gas all led to a rapid recovery and the resumption of economic growth in the economic sectors.

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