Turkey's Islamic banking assets expected to double in 10 years - Moody's

With just over 5.8% of banking assets at the end of September, Turkey's Islamic finance sector is currently smaller than other large Muslim countries, such as Malaysia, whose banking assets amounted to 33% in the period under review, Moody's Investors Service said on Monday.

Evolving regulation and supervision, as well as plans to equalise tax treatment for equivalent financial activities of commercial and Islamic finance institutions are expected to contribute to the expansion of the sector. A planned state-funded $2.6 billion (2.36 billion euro) International Financial Centre in Istanbul (IIFC) scheduled to open in 2023 will also foster growth, according to the credit rating agency.

Underlying the previous developments in the sector, Moody's Investors Service noted that Turkey established three new state-owned Islamic banks from 2015 to 2019. On top of that, Borsa Istanbul launched trading in Islamic bonds, called sukuk, in August 2018.

($ = 0.90776 euro)