The document discusses whether Islamic finance can go global. It notes that global Islamic assets reached $1.7 trillion in 2013, but are still limited geographically, with around 90% located in just 7 countries. Many countries lack infrastructure to support Islamic finance. However, some non-Muslim countries like the UK, South Africa, Luxembourg and Hong Kong have begun developing their Islamic finance markets through sukuk issuances. For Islamic finance to truly globalize, the document argues it needs to address misconceptions about the system, restrictive regulations and laws in many countries, a lack of support from Islamic nations, and other challenges around liquidity management and standardization.

1. Can Islamic Finance go global … Truth or Dare?
International Conference on International Studies (ICIS 2014)
Raja Teh Maimunah
MD/CEO
Hong Leong Islamic Bank Berhad
1 December 2014

2. 2
Islamic Finance on the uptrend
USD1.7 trillion in 2013
Source: World Islamic Banking Competitiveness Report 2013-2014, Ernst & Young
Source: World Islamic Banking Competitiveness Report 2013-2014, Ernst & Young
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3. 3
However …
Global Islamic Assets USD1.7 trillion
in 2013^
Source: ^ World Islamic Banking Competitiveness Report 2013-2014, Ernst & Young
We have a long way to go …
World 20 Largest Banks by Total Assets 2013* RankBankCountryTotal assets US$ trillion** 1Industrial & Commercial Bank of China (ICBC)China3.182HSBC HoldingsUK2.763China Construction Bank CorporationChina2.604BNP ParibasFrance2.595Mitsubishi UFJ Financial GroupJapan2.516JPMorgan Chase & CoUS2.487Agricultural Bank of ChinaChina2.478Bank of ChinaChina2.449Credit Agricole GroupFrance2.3510Barclays PLCUK2.2711Deutsche BankGermany2.2512Bank of AmericaUS2.1513Japan Post BankJapan1.9714Citigroup IncUS1.8915Societe GeneraleFrance1.7416Mizuho Financial GroupJapan1.7117Royal Bank of Scotland GroupUK1.7018Banco SantanderSpain1.6119Sumitomo Mitsui Financial GroupJapan1.5720Groupe BPCEFrance1.57Notes: * Latest financial reports ranging from mid-2013 to mid-2014** Exchange rates based on 31 March 2014Source: http://www.relbanks.comGlobal Islamic Total Banking Assets of USD1.7 trillion

4. 4
Limited Coverage by Geography
Source: Islamic Finance in OIC Member Countries, OIC Outlook Series May 2012
OIC Countries by largest Shariah Compliant Assets (USD billion), 2011
Approx 90% of total IF assets sits in only 7 countries

5. 5
… and lacking infrastructure in most
Weak or no infrastructure
Some infrastructure
Relatively developed infrastructure
Source: World Islamic Banking Competitiveness Report 2011-2012, Ernst & Young

6. 6
Development in Non-Muslim Countries
United Kingdom
Issue Date :25 June 2014
Amount :GBP200 million
Type: SukukIjara
South Africa
Issue Date :17 September 2014
Amount :USD500 million
Type: SukukIjara
More traction seen in
Non-Muslim countries?
Image courtesy of David Castillo Dominiciat FreeDigitalPhotos.net
Luxembourg
Issue Date :1 October 2014
Amount :EURO 200 million
Type: SukukIjara
Hong Kong
Issue Date :11 September 2014 Amount :USD1 billion
Type: SukukIjara

7. 7
The truth …
Image courtesy of David Castillo Dominiciat FreeDigitalPhotos.net
Misconception of IF
Restrictive Legal, Regulatory & Tax Framework
Lack of drive & support by Islamic countries
Dearth of Liquidity Management tools
Challenge in decoupling from conventional banking prudential framework
Dominance of conventional banking liquidity
Education on Ribaamongst Muslims
Standardisationof contract documents

8. 8
The dare?
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