A recent report by the Egyptian Islamic Finance Association (EIFA) highlights the robust performance of Islamic banking in Egypt. In June 2024, the turnover of Islamic banking reached EGP 737bn, marking a substantial increase of EGP 175bn compared to June 2023. This impressive growth represents a 31.1% year-on-year expansion.
Market Share:
Islamic banking now constitutes 4% of the overall Egyptian banking market.
The Egyptian market includes 14 banks licensed by the Central Bank of Egypt (CBE) to offer Islamic financial products.
Among these, three banks operate exclusively as Islamic banks: Faisal Islamic Bank of Egypt, Al Baraka Bank Egypt, and Abu Dhabi Islamic Bank Egypt. Additionally, 11 other banks have Islamic branches alongside their traditional ones.
Branch Network:
The number of Islamic branches has grown to 265, with an increase of nine branches compared to June 2023.
These branches serve approximately 4 million customers.
Some traditional banks also hold Islamic financing licenses and offer Sharia-compliant services across all branches. Nasser Social Bank is one such example.
Top Performers:
Faisal Islamic Bank of Egypt leads the pack with a turnover of EGP 215bn, capturing a 29.3% market share.
Abu Dhabi Islamic Bank – Egypt follows closely in second place, with a turnover of EGP 209bn (28.3% market share).
Banque Misr’s Islamic branches rank third, contributing EGP 140bn (19% market share).
Al Baraka Bank secures fourth place with a turnover of EGP 124bn (16.9% market share).
The United Bank rounds out the top five, with a turnover of EGP 16bn (2.2% market share).
Deposits and Financing:
Islamic deposits reached EGP 561bn in June 2024, reflecting a 32% growth compared to June 2023. These deposits constitute approximately 6.2% of the total deposit volume in the Egyptian market.
Financing compatible with Islamic Sharia principles stands at EGP 602bn, representing a significant increase of EGP 152bn (33.7%). This amount corresponds to 5% of the total loan portfolio across all banks.
Microfinance Services:
Several companies have obtained licenses from the Financial Regulatory Authority (FRA) to provide microfinance services under Sharia.
“Maksab” is the first company to receive such a licence.
Abu Dhabi Islamic Bank has also established a microfinance company adhering to Sharia controls.
“Aman” operates six branches dedicated to providing Sharia-compliant microfinance services.
Sharia-compliant Financing
Many companies offering Sharia-compliant financing have obtained licenses from regulatory authorities, including Bedayati and Irada. These companies are also exploring the issuance of sukuk (Islamic bonds) to fund their clients under Sharia principles.
Global Outlook:
As of March 2024, the global Islamic banking industry’s assets reached approximately $4.6trn, according to international reports.
Projections indicate that in 2027, the industry’s assets will grow to $6.6trn.
Worldwide, there are currently 1,871 Islamic financial institutions contributing to this growth.
