Doha, Qatar: Islamic banks experienced significant growth in financing last year, particularly in the services and general trading sectors which saw an increase of 15.8 percent and 10.6 percent respectively.

Consumption sector finance increased by 8 percent, however, the real estate and industry sectors experienced a decline of (17.1 percent) and (16.2 percent), annual report on Islamic Finance in Qatar 2023 has revealed.

The financing of Islamic banks accounted for 30 percent of the total financing of the banking sector in last year and during the period 2019-2023 the compound annual growth rate of total financing in Islamic banks was 5.8 percent compared to 3.8 percent in conventional commercial banks.

According to quarterly data issued by Qatar Central Bank, financing provided by Islamic banks in 2023 amounted QR382.7bn, recording an insignificant increase of 0.6 percent compared to 2022, while credit facilities to conventional commercial banks increased by 3.4 percent.

As for the contribution of Islamic banks in financing various sectors in 2023, the report stated, “we find that the consumer sector represented the largest sector financed by Islamic banks, as it acquired 62 percent of the total financing of commercial banks (Islamic and conventional), followed by the real estate sector by 42 percent, the construction sector 40 percent, and the industry sector 36 percent.”

It is also noted that most of the financing of Islamic banks is directed towards the local market, at a rate of 96 percent of their total financing, compared to 95 percent of the financing of traditional commercial banks, directed towards the local market.

Upon making a comparing among the net financings of the four Islamic banks in the year 2023, and according to the financial data of those banks, “we find that with the increase in QIIB finance by 4.2 percent, QIB by 2.6 percent, and Dukhan Bank by 2.5 percent.

Masraf Al Rayan finance decreased by 8.2 percent compared to the year 2022,” it added.

During the five-year period 2019-2023, the compound annual growth rate of net financing in Islamic banks in Qatar during the period reached 4.4 percent.

The highest compound growth rate was for Dukhan Bank at a rate of 8.4 percent, followed by Masraf Al Rayan at a rate of 7.7 percent, and QIB at 1.5 percent.

Islamic banks achieved revenues amounting to QR30.3bn in 2023 with a growth rate of 30.6 percent compared to 2022.

Revenues of financing and investment activities constituted 91.7 percent of the total revenues.

Revenues of financing and investment activities were the highest drive of such growth by 34.2 percent. Provisions decreased by 23.3 percent compared to 2022.

In last year four Islamic banks achieved profits attributable to shareholders of approximately QR8.2bn compared to QR7.7bn in 2022, with a growth rate of 7.1 percent.

The growth rate in QIIB reached 8.3 percent, in Masraf Al Rayan 8 percent, QIB 7.5 percent, and in Dukhan Bank 3.9 percent compared to 2022.

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