Islamic finance in Egyptian market exceeds $19.38bln in 1H 2023: El-Beltagy

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Mohamed El-Beltagy, President of the Egyptian Islamic Finance Association, has said that the Islamic finance in the Egyptian market exceeded EGP 600bn in the first half (1H) of this year, of which EGP 562bn provided by banks, and the rest EGP 60bn was Sukuk issuances.

El-Beltagy added in a report issued Tuesday, that the volume of Islamic banking accounts for 5% of the Egyptian banking market, as it increased by about EGP 120bn in June 2023, with a growth rate of 27% over June 2022.

He added that the Egyptian market includes three Islamic banks, which are Faisal Islamic Bank of Egypt, Al Baraka Bank Egypt, and Abu Dhabi Islamic Bank, in addition to 11 Islamic branches of normal banks, serving about 3.5 million customers.

He said that the number of Islamic branches reached 256 in June 2023, an increase of 11 branches over 2022, pointing out that these branches represent 5.1% of the total branches in the banking sector as a whole, taking into account that there are conventional banks that have an Islamic financing license and provide this service. in all its branches.

According to El-Beltagy, Faisal Islamic Bank of Egypt occupies the first position in the Islamic banking market in Egypt, with a turnover of EGP 170bn, with a share of 30.1%, while Abu Dhabi Islamic Bank came in second place with a turnover of EGP 137.6bn with a share of 24.5%. Banque Misr for Islamic Transactions ranked third with a turnover of EGP 118bn and a share of 21%. Al Baraka Bank came in fourth place with a turnover of EGP 93.8bn and a share of 16.7%. The United Bank came in fifth place with a turnover of EGP 14.4bn and a share of 2.6%.

He pointed out that the volume of Islamic deposits recorded at the end of June 2023 about EGP 425bn, equivalent to about 6% of the total deposits in the Egyptian banking sector, an increase of EGP 64bn, and a growth rate of 18% from June 2022, while the volume of financing in Islamic formulas amounted to about EGP 450.6bn, equivalent to about 5% of the total loan portfolio in the banking sector, an increase of EGP 102bn and a growth rate of 29.3%.

According to El-Beltagy, the Egyptian market witnessed the development of many Islamic banking products that meet the needs of customers, which exceed 65 products and banking services, stressing that the market still needs to develop and innovate many products that are compatible with Islamic law, whether for the individual or corporate sector and the small and medium enterprises sector.

He pointed out that developing and qualifying human resources capable of providing these Islamic products to customers is one of the most important challenges in the Egyptian market, which is what the Egyptian Islamic Finance Association is working on, by offering a professional master’s degree in Islamic finance issued by the General Council for Islamic Banks and Financial Institutions, and the certificates of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), in addition to specialized professional certificates and programs to develop skills and increase knowledge of employees of Islamic banks.

The Central Bank of Egypt had issued instructions to Islamic banks in Egypt and banks that have Islamic branches, to have a Sharia board, and for there to be an independent financial center for those branches, and independent departments to supervise the implementation of Islamic products in those banks.