The Egyptian Islamic Finance Association (EIFA) revealed that the volume of Islamic banking in the Egyptian market increased to EGP 544bn in March 2023, an increase of EGP 110bn, with a growth rate of 25%, compared to March 2022.
According to a recent report by the association, Islamic banking accounts for about 5% of the size of the Egyptian banking sector as a whole.
The EIFA clarified that Faisal Islamic Bank of Egypt occupies the first position in the Islamic banking market in Egypt, with a turnover amounting to EGP 169.2bn, accounting for 31.1% of the volume of the Islamic banking industry in the Egyptian market as a whole.
It indicated that the business of Abu Dhabi Islamic Bank (ADIB) Egypt is developing rapidly during the current period, as the bank occupies the second position with a volume of EGP 124.3bn, with a share of 23% of the market size, and a growth rate over the previous year of 33.3%, thus achieving the highest growth rate among Islamic banks in Egypt.
Banque Misr for Islamic Transactions came in third place, with a turnover of EGP 110bn, with a share of 21.1%, with a growth rate of 23%, while Al Baraka Bank Egypt came in fourth place, with a turnover of EGP 93.3bn, with a share of 17.4%. The United Bank is in fifth place with a turnover of EGP 14bn, with a share of 3%.
According to the EIFA, the volume of deposits compatible with the provisions of Islamic law amounted to EGP 413.3bn, an increase of EGP 34bn, with a growth rate of 28.5% compared to March 2022, pointing out that these deposits represent about 6% of the total volume of deposits in the Egyptian banking sector as a whole.
On the other hand, the volume of financing compatible with the provisions of Islamic law amounted to EGP 430.6bn, an increase of EGP 88bn, with a growth rate of 25.7%. This type of financing represents 5% of the total volume of financing in the Egyptian banking sector.
According to the EIFA, the Egyptian banking market includes 14 banks that have a license to offer Islamic products from the Central Bank of Egypt, of which 3 are fully Islamic banks, which are Faisal Islamic Bank of Egypt, Al Baraka Bank of Egypt and Abu Dhabi Islamic Bank – Egypt, in addition to 11 banks that have Islamic branches in addition to the traditional branches.
The number of Islamic branches in Egyptian banks reaches 254, representing 5.2% of the total number of branches in the Egyptian banking market, and provides services to about 3 million customers.
According to the EIFA, the volume of the Islamic banking industry worldwide reaches $3.6trn by the end of March 2023, and it is expected, according to international reports issued in this regard, to reach about $4trn by the end of the year.
In a related context, the EIFA indicated that following the issuance of the corporate sukuk law and its executive regulations at the end of 2018, 6 sukuk worth EGP 12.8bn were issued until the end of March 2023, pointing out that 3 issuances of new sukuk are currently being studied in the Egyptian market.
It added that the state’s sovereign sukuk law was also issued and its executive regulations approved, and the first state sukuk was issued on 21 February 2023, at a value of $1.5bn, equivalent to EGP 46bn, according to a benefit lease contract.
The EIFA explained that there are 17 investment funds, 11 Takaful insurance companies in the Egyptian market, two consumer finance companies, the same for real estate financing, and the same for microfinance, all of which operate in accordance with Islamic Sharia rules.