Southeast Asia’s (SEA) USD290 billion Islamic banking market is poised to grow at a compound annual growth rate of about eight per cent over the next three years, led by Malaysia, Indonesia and Brunei Darussalam.
Brunei Darussalam accounts for four per cent of Southeast Asia’s Islamic banking assets, the third highest in SEA, according to the rating agency, S&P Global Ratings in its recent report titled Growing Belief In Southeast Asia’s USD290 Billion Islamic Banking Market.
The rating agency said Islamic financial institutions in the Sultanate constitute about half of the total financial system assets in the hydrocarbon-dominated economy of the country.
They expect the performance of these institutions to mirror that of the broader banking system and anticipate overall bank credit growth at three to five per cent in the next 12 to 18 months.
The bulk of the expansion is likely to come from wholesale customers as the government looks to boost the economy and support local firms through contracts from government-linked companies, foreign direct investment projects, the oil and gas sector, and infrastructure development. Retail activity could remain constrained by regulations on the total debt service ratio and the saturated market.
Source: Borneo Bulletin
June 17, 2022
