In Focus
ISLAMIC BANKING | Staff Reporter, Malaysia
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Islamic financing growing stronger in Malaysia

Malaysia’s Islamic banks accounted for 24.2% of Malaysia’s total banking industry assets during the first seven months of 2012.

The government reported that Islamic banks accounted for 24.2% or US$22.8 billion of the country's total banking assets as at end-July, up from 23.7% at the end of 2011.

Islamic banks' deposits amounted to US$119 billion at the end of July, increasing their share of total deposits to 26% from 25.8% at the end of last year. Total assets grew at a faster rate of 21% from January to July compared to 15.4% in the same period last year.

Islamic financing accounted for 26.6% of total loans at the end of July, compared with 25.9% at the end of 2011. Loans to households accounted for over two-thirds of loans made through Islamic financing.

Islamic financing is expected to account for 40% of total financing by 2020 due to more participation and more diverse offerings under the financial sector blueprint prepared by the central bank.

The Islamic capital market consisting of equities compliant to sharia or Islamic law improved its share of total trade volume to 66.8% from 59.1% last year.

The government said the Islamic capital market has contributed significantly to the development of the overall capital market and remains an important alternative source for the raising of capital.

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