Egypt’s Islamic Banking Sector Grows to EGP 1.14 Trillion by 2024

In 2024, Egypt’s Islamic banking sector surged to EGP 1.14 trillion, reflecting a 68% growth and contributing 5% to the overall banking market. With 15 banks licensed for Islamic services, including four fully Islamic banks, the sector’s reach has expanded significantly, alongside the introduction of numerous Sharia-compliant financial products. The sector is poised for further growth and innovation, bolstering financial inclusion and economic development.

In 2024, the Islamic banking sector in Egypt has ascended to EGP 1.14 trillion, signifying about 5% of the total banking market. This is an increase of EGP 412 billion compared to December 2023, showcasing a remarkable growth rate of 68%. As reported by Mohamed El-Beltagy, Chairperson of the Egyptian Islamic Finance Association, this growth reflects a robust trend in Islamic finance within the country.

Currently, Egypt’s banking landscape comprises 15 banks authorized by the Central Bank of Egypt to provide Islamic banking services. Out of these, four banks entirely adhere to Islamic finance guidelines: Faisal Islamic Bank of Egypt, Al Baraka Bank Egypt, Abu Dhabi Islamic Bank – Egypt (ADIB), and Kuwait Finance House, the latter having recently acquired Ahli United Bank. Additionally, 11 conventional banks also offer dedicated Islamic banking services through specialized branches.

The number of Islamic banking branches in Egypt reached 311, marking an increase of 51 branches from the previous year, and serving nearly 4 million customers. Several conventional banks with Islamic licenses extend Sharia-compliant services throughout their entire branch networks. The Nasser Social Bank, a government institution, is committed to providing various Islamic financial products in accordance with Sharia law.

ADIB continues to lead as the foremost Islamic bank in Egypt, with a total business volume of EGP 258 billion, capturing 24.5% of the market and experiencing a notable growth rate of 62% since 2023. Faisal Islamic Bank comes in second, reporting EGP 240 billion in business volume, while Banque Misr’s Islamic Transactions Unit takes third place with EGP 195 billion. Al Baraka Bank and United Bank follow, marking significant contributions to the sector.

Islamic deposits in Egypt reached EGP 738 billion in December 2024, representing 7.3% of the total banking sector deposits. This figure reflects an increase of EGP 290 billion, signifying a 65% growth from the previous year. Furthermore, Sharia-compliant financing increased to EGP 807 billion, accounting for 6% of the total loan portfolio, with a growth rate of 64% over the previous year.

The Egyptian market is witnessing the continued development of Islamic banking products, with over 65 Sharia-compliant financial instruments now available, encompassing savings plans, financing structures, and investment products. Despite the sector’s growth, El-Beltagy has underscored the necessity for further innovation in Islamic financial solutions across individual, corporate, public sector, and SME banking.

The Islamic banking sector in Egypt is experiencing significant growth and expansion, highlighted by an increase in market share and a variety of available products. The rise in Islamic banking branches and assets signals a positive trajectory for financial inclusion and economic development in the country. Continued innovation within this sector is crucial for catering to the diverse financial needs of clients, thereby enhancing the overall stability and appeal of Islamic finance in Egypt.

Original Source: www.dailynewsegypt.com