KUWAIT, May 24 (KUNA) -- The Islamic banks in Turkey form 5.2 percent of
banking assets and will reach 10 percent by 2018, since those banks surpass
the rest of the banking sector and have steady financing growth over 20
percent per year, a specialized economic report showed Friday.
"During 2012, the total assets of the Islamic banks grew by 25.2 percent
y-o-y to reach TRY70.3bln. As at end-March 2013, total assets of Islamic banks
stood at TRY74.7bln, representing 6.3 percent ytd growth (industry growth: 4.2
percent ytd)," reads the report.
Data also showed that the Islamic banking assets accounted for 5.2 percent
of all banking assets in Turkey as at end-March 2013, up from 5.1 percent at
Moreover, the KFH expected that the Islamic banks' total assets are
expected to reach 10.0 percent of the Turkish banking system's total by 2018.
"In comparison, conventional banking assets expanded by 4.2 percent ytd, as
at end-March 2013 (2012: 11.4 percent y-o-y), to TRY1.3tln from TRY1.25tln, as
at end-2012. The Central bank's database shows that the Islamic banking assets
growth had consistently exceeded that of conventional banking assets growth,"
added the report.
The report pointed out that the KFH-Turkey is first in deposits, not to
mention factors that spark further growth during the coming period; especially
that the Islamic banks are highly demanded and offer a wide array of products.
The Turkish banking sector has three kinds of banks, which are the
commercial, development, and investment banks; in addition to Islamic banks
that do not deal with interest.
The limited existence of the Islamic banks guarantees its ability to
continue to grow significantly during the coming years.
The KFH report underlined that continuous measures and initiatives taken by
the Turkish government will drive the Islamic banking sector to new heights in
the longer term.
"By 2018, Turkey is expected to witness its Islamic bank's total assets
reaching 10 percent of the overall banking sector's total assets (March 2013:
"In general, we remain optimistic on the potential of the Islamic banking
in Turkey, given the following: low penetration of Islamic banking in Turkey;
encouraging demographics and a large Muslim population (99 percent) will
continue to support the demand for Shariah-compliant products and investments
in Turkey; and Turkey's bid to strengthen relationships with countries in the
Middle East will contribute to the growth of Islamic finance in the country."
KUNA 241916 May 13NNNN