(MENAFN- The Peninsula) Doha: Turkey's Islamic banking assets are set to double within 10 years from a low level as government initiatives drive growth in the sector, Moody's Investors Service said in a report published yesterday.
Turkey's Islamic finance sector currently is smaller than other large Muslim countries, and its slow start means it has ample room to expand. The sector represented just over 5.8 percent of banking assets at the end of September 2019, compared to Malaysia (33 percent) and Middle Eastern countries (in the range of 15 to 77 percent).
The Turkish government founded three new state-owned Islamic banks from 2015 to 2019, broadening access and increasing competition.
In addition, a state-funded $2.6bn International Financial Centre in Istanbul (IIFC) scheduled to open in 2023 will be a new catalyst for growth. It is intended to establish Istanbul as global centre for finance, and development of Islamic finance is a key pillar of the IIFC strategic plan.
Islamic banking is also benefitting from evolving regulation and supervision. Turkey's stock market operator, Borsa Istanbul, launched trading in sukuk (Islamic bonds) in August 2018, deepening the country's Islamic capital market activities.
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