WORLD - REPORTS - A.T. Kearney analysis suggests it's time for Islamic banks to tackle slowing growth rates and eroding profitability

www.ameinfo.com - Traditionally, Islamic banks have outperformed their conventional peers in most markets. However, a closer look suggests the market dynamics are changing, demonstrating a new trend. Two key indicators are cause for reflection: slowing growth rates and eroding profitability, according to A.T. Kearney, a global management consultancy. Declining growth rates are occurring in key geographies including KSA, Bahrain and the UAE, where growth rates have dropped to between 3% and 8% from double-digit figures. In parallel cost income ratios are increasing in most markets, putting pressure on profitability.

Up until now, Islamic banks have typically emulated the conventional bank offer, but the eroding profitability trend suggests it is now time for a new approach. A.T. Kearney says to sustain profitable growth a more sophisticated leveraging of the Islamic Banking potential is required.  (source)

WORLD - REPORTS - A.T.Kearney : the future of Islamic banking

www.atkearney.com - The Future of Islamic Banking

Declining growth rates and eroding profitability suggest it is time to better leverage the Islamic banking potential. In order to do this, Islamic banks should revisit their strategic positioning and improve their operational efficiency.
For years, many Islamic banks have witnessed double-digit growth rates, surpassing their conventional peers. At first glance, all seems well for the Islamic banking industry. There is ample room for growth as Islamic banking rarely exceeds a third of total market share, even in the Gulf Cooperation Council (GCC) countries and Malaysia. Several potential markets with large Muslim populations remain largely untapped, such as India and the Commonwealth of Independent States countries, made up of the former Soviet republics. In addition, overall banking penetration in many of the industry's core markets is still low. For example, GCC countries have not yet achieved the banking penetration levels of countries such as France or the United Kingdom. At the same time, several new markets have opened up for Islamic banking, with even more on the horizon (see sidebar: A Market Overview). (download link report here) (source)