Low oil prices have helped to slow asset growth in the Islamic finance sector to roughly 5% this year, according to a new prediction.
Growth is expected to be much less rapid than in 2014, when Islamic assets rose 12%, according to the figures from ratings agency S&P Global Ratings.
Mohamed Damak, senior director and global head of Islamic finance, said an environment in which a barrel of Brent crude costs about $50 creates problems for financial institutions in the oil-exporting countries.
“There is little wonder then that Islamic finance will be negatively impacted as a result,” he said.
Governments and their related entities make up as much as 40% of the deposit base in banks in the Gulf region, he said, and the inflow largely depends on oil prices.
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