* Global Islamic assets hit $1.3 tln in 2011
* Islamic funds reached $58 bln, a new high
* Islamic assets represent 1 pct of global market
By Anjuli Davies
LONDON, March 29 Islamic financial assets around
the world hit $1.3 trillion in 2011, a 150 percent increase over
five years as the industry expands into new country's beyond
core markets in the Middle East and Malaysia, a report on
Developed markets in Malaysia, Iran and the Gulf remain
fertile ground for future growth, but considerable potential
also exists for expansion as more countries look to cultivate
Islamic banking operations, including Australia, Azerbaijan,
Nigeria and Russia, the report by lobby group TheCityUK's UK
Islamic Finance Secretariat (UKIFS) said.
The figures were based on UKIFS growth estimates projected
on end-2010 figures from a survey of the top 500 Islamic
Financial Institutions conducted by The Banker publication.
"Considerable potential exists for expansion of the industry
worldwide, although appropriate legal and regulatory structures
are crucial for its development in individual countries," the
Morocco is also looking to launch its first fully-fledged
Islamic bank in 2013, Reuters reported on Monday
A lack of global standardisation among Islamic institutions
has been one of the main challenges for the Islamic finance
industry. While regulatory bodies such as AAOIFI in Bahrain and
IFSB in Malaysia have attempted to provide standards for
sharia-compliant transactions, they are guidelines rather than
The long-term impact of the Arab spring uprisings as new
countries open up to Islamic finance remains to be seen and any
further spread of political unrest could negatively affect
prospects in some Middle Eastern countries, the report said.
Egypt, for instance, has raised the possibility of issuing a
sovereign sukuk (Islamic bond), while Tunisia has set up a
working group that will study how to develop Islamic finance in
Sukuk issuance globally increased 62 percent to $84 billion
in 2011, with Malaysia accounting for two thirds of that.
Islamic funds under management reached a high of $58 billion
in 2010, with the available pool about 10 times larger at over
$500 billion, the report found. Fierce competition, though, has
driven down management fees worldwide from 1.5 percent in 2006
to 1 percent in 2011.
The new figures are higher than those predicted by Ernst and
Young in a report in November, in which the consultancy
estimated Islamic finance assets could climb 33 percent from
2010 levels to $1.1 trillion by the end of 2012.
Islamic assets represent only around 1 percent of the global
UKIFS is a wholly-owned subsidiary of TheCITYUK, a lobby
group composed of members across the financial services sector,
including lawyers, bankers and asset managers.