Growth of Egypt’s Islamic Banking Sector in 2024: A 68% Surge

Egypt’s Islamic banking sector grew by 68% in 2024, reaching LE 1.14 trillion and accounting for 5% of the total banking market. Islamic deposits totaled LE 738 billion while Sharia-compliant financing reached LE 807 billion. The sector saw innovations in financial products and a rise in licensed banks, expanding the number of Islamic banking branches and enhancing services offered to nearly 4 million customers.

In 2024, Egypt’s Islamic banking sector experienced significant growth, reaching LE 1.14 trillion, which constitutes 5 percent of the overall banking market. This marked an increase of LE 412 billion from December 2023, corresponding to a remarkable 68 percent growth rate, as indicated by Mohamed El-Beltagy, Chairperson of the Egyptian Islamic Finance Association.

By December 2024, Islamic deposits amounted to LE 738 billion, representing 7.3 percent of total banking sector deposits. This reflected a rise of LE 290 billion and a growth rate of 65 percent compared to the previous year. Additionally, Sharia-compliant financing reached LE 807 billion, making up 6 percent of the total loan portfolio, signifying a growth of 64 percent over 2023 with an increase of LE 314 billion.

The development of Sharia-compliant financial instruments continued in Egypt, with over 65 products available, including savings plans and investment products. Despite these advancements, El-Beltagy underscored the necessity for further innovation in Islamic financial solutions across various sectors, including individual, corporate, public sector, and SME banking.

According to the Central Bank of Egypt, 15 banks were licensed to offer Sharia-compliant banking services by 2024. Among these, four banks operated exclusively on Islamic finance principles, including Faisal Islamic Bank of Egypt, Al Baraka Bank Egypt, Abu Dhabi Islamic Bank – Egypt, and Kuwait Finance House. Additionally, 11 conventional banks provided Islamic banking services through specialized branches.

The number of Islamic banking branches in Egypt grew to 311, an increase of 51 branches from the previous year, serving nearly 4 million customers. Some conventional banks with Islamic finance licenses offered services across their entire branch networks. Nasser Social Bank continued to offer a range of Islamic financial products in accordance with Sharia law.

ADIB emerged as the leader in Egypt’s Islamic banking sector, with a total business volume of LE 258 billion, capturing 24.5 percent of the market and experiencing a 62 percent growth rate from 2023. Faisal Islamic Bank of Egypt followed closely with LE 240 billion and a 23.6 percent market share, while Banque Misr’s Islamic Transactions Unit ranked third with LE 195 billion.

The Islamic financial sector also witnessed expansion in the Sukuk market, with total issuances reaching LE 100 billion in 2024. This encompassed both sovereign and corporate Sukuk, indicating heightened investor interest in Sharia-compliant financial instruments. Growth was further noted in related sectors, including 17 Islamic investment funds, seven Takaful insurance companies, and two real estate financing firms operating under Sharia principles. Additionally, microfinance and consumer finance companies began integrating Islamic financial products into their services.

In conclusion, the Islamic banking sector in Egypt has demonstrated remarkable growth, with notable increases in deposits and financing. The sector has expanded its range of products and services while leading banks have significantly increased their market presence. The development of the Sukuk market and the growth of related sectors highlight the burgeoning interest in Sharia-compliant finance, pointing towards a promising future for Islamic banking in Egypt.

Original Source: www.egypttoday.com