Everyone in UAE is aware of Islamic Banking, which works on the basis of Sharia-compliant. Islamic banking is well known for providing a business loan, where the customer need not pay any interest on the loan received instead pay some profits gained on the business. Several banks in the UAE provides Islamic Finance. This basically deals with the profits gained on the loans provided. According to a report, there were very few cases of Islamic banks experiencing loss. There are currently 20+ banks in the UAE which are providing Islamic finance services.
Top banks in UAE providing Islamic banking services
Dubai Islamic Bank
Dubai Islamic bank provides the best Islamic services. It is the first Islamic bank to open a ladies only branch with exclusive facilities for ladies under Johara Ladies.
Abu Dhabi Islamic Bank
Abu Dhabi Islamic bank provides vast services in UAE with several branches all around. It is known for providing best cards and services to the “New to UAE” employees.
RAKBank
RAKBank provides commercial banking services along with the Islamic banking services in the UAE. It provides exclusive cards, accounts, and other financial services for the Islamic banking users.
Standard Chartered Bank
Standard Chartered Bank is an international bank providing its service in UAE. Not only commercial banking services, it also provides best Islamic banking facilities.
Emirates Islamic Bank
Emirates Islamic bank provides commercial and retail banking facilities along with the Islamic banking services.
Islamic Fixed Deposits
Islamic banking provides fixed deposits also, Unlike conventional banking, the depositor will not get a standard profit on the investment made, the profit rates depends on the profits earned by the bank. So the profit rates are not constant, it keeps fluctuating. About 60% of UAE’s economy depends on the Islamic finance industry.
Latest updates on Islamic banking sector
According to the official reports by S&P Global Ratings, it is stated that by the end of 2016 Islamic finance was left with the assets of $2 trillion. Due to the decrease in the oil prices in 2017, there was a drop in the profits of Islamic finance. The authorities suggested that Islamic banks didn’t experience a huge loss. 2016 was the year with highest profits to date.
Experts suggest that the Islamic banking sector won’t experience any loss in far future because there are several other large-scale companies that are the clients of the Islamic banking industry. And those companies are likely to show good returns which will be helpful for the Islamic finance industry even though their contribution to the industry is less.
Since the initial days, Islamic banking sector never experienced any bad loss and is always performing great. Financial advisors suggest that there would be a growth in the assets of the Islamic finance industry after early 2018. Currently, the banks providing Islamic finance have reduced their lending business and are being selective about the customers it is providing money to.
In 2022, the UAE was recognized as one of the top three Islamic economies worldwide for the third year running. The 2023 IFDI ranked the UAE fourth globally in Islamic financial markets by assets.
According to CBUAE data from September 2024, Islamic banks represent about 22% of the total banking credit, with investments reaching AED152.3 billion by the end of Q3 2024.
Fitch Ratings anticipates that Islamic banks in the UAE will outpace conventional banks in growth over the medium term.
A CBUAE study revealed that 79% of Islamic banks in the UAE have sustainability strategies, with 74% of these approved at the board level. All Islamic banks reported having established sustainability strategies, while some conventional banks with Islamic windows are still developing theirs.
The UAE has also seen considerable growth in the Sukuk market, driven by the Federal Government’s introduction of dirham-denominated Islamic Treasury Sukuk, fostering greater participation across the sector.
The UAE debt capital markets are projected to exceed US$300 billion by the close of 2024, fueled by the nation’s targeted efforts to draw in both regional and global investors.
Fitch Ratings reports that the UAE holds 6.6% of the global sukuk market, securing the fourth position worldwide across all currencies.
S&P Global Ratings anticipates continued robust expansion in the UAE’s Islamic Finance sector, buoyed by the strong non-oil economic performance.
COP28 in the UAE underscored the compatibility of Islamic finance principles with sustainability, demonstrating the sector’s capacity to foster sustainable development, which is expected to further stimulate the expansion of Islamic finance going forward.
As a premier global hub for sukuk issuances, Nasdaq Dubai reported a total value of sukuk listings reaching US$98.9 billion in December 2024.
Nikitha is a Senior Analyst at MyMoneySouq.com. She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.
Nikitha is a Senior Analyst at MyMoneySouq.com. She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.
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