Islamic finance assets in Qatar grew at a rate of 20 percent in 2021 to reach QR629 billion ($172 billion), an annual report on Islamic finance in Qatar has revealed.
Islamic banks accounted for 87 percent of these assets, it added. Islamic Sukuk accounted for 11.6 percent and Takaful insurance companies 0.8 percent. The remaining share is distributed to investment funds and other Islamic financial institutions, the report said.
It should be noted that the rise in Islamic finance assets in Qatar in 2021 is mainly a result of the increase in the size of Islamic banks’ assets after the successful merger between Masraf Al Rayan and Gulf Commercial Bank (Khaleej).
The report, prepared by Bait Al-Mashura Financial Consulting Company, discusses the results of the activities of Islamic financial institutions for the year 2021. It also provides a clear overview of the performance of Islamic finance institutions and the financial and economic sector in Qatar, aiming to provide a knowledge base for institutions, researchers, and those interested in the local Islamic finance sector. The report views the results for the year 2021 with a cumulative study for five years (2017-2021).
In the Islamic banking sector, it said, the assets of Islamic banks grew in 2021 by 12.6 percent to reach QR507.4 billion, deposits with Islamic banks jumped by 17.5 percent, the private sector deposits represented 54 percent, and financings increased by 8.7 percent, directed more towards the government sectors, real estate and personal finance. The revenues of Islamic banks increased by 2.6 percent and their profits amounted to approximately QR7.5 billion, with a growth rate of 10.7 percent.
In the Takaful insurance sector, the assets of insurance policyholders amounted to QR2.3 billion, with a growth rate of 4.4 percent, and insurance contributions amounted to QR1.4 billion, an increase of 7.4 percent, and insurance surpluses amounted to about QR113 million.
In Islamic finance companies, their assets amounted to QR2.5 billion, declining by 3.6 percent, their finance decreased by 8 percent, and their revenues amounted to QR220 million, a decrease of 9.2 percent. Finance and investment are 96 percent of these total revenues. The results of Islamic finance companies’ business varied between achieving total profits exceeding QR117 million and incurring losses amounting to approximately QR7 million.
In the field of Islamic Sukuk, and with the resumption of the Qatar Central Bank issuing government Sukuk, the issued Sukuk (government and Islamic bank Sukuk) amounted to QR10.38 billion, with a growth rate of 30.2 percent, of which government Sukuk constituted 73.7 percent of the total issued Sukuk. According to the available data on Islamic investment funds, the assets of these funds amounted to QR862 million, with a growth rate of 5.8 percent and their performance was uneven during the year 2021.
On the Qatar Stock Exchange, Al Rayan Islamic Index achieved a positive performance, closing at a rise of 10.48 percent, and the shares of all Islamic finance companies achieved a positive performance, and their shares rose during the year 2021 by rates ranging between 1.8 percent and 89.7 percent).
The Islamic financial sector in Qatar varies into four main sectors: Islamic banks, Takaful insurance companies, Islamic finance companies and Islamic investment companies, in addition to Islamic financing products represented by Sukuk, investment funds and Islamic indices. These institutions operating in these financial sectors are subject to the direct supervision of the Qatar Central Bank. In addition to the presence of some financial institutions that practice Islamic finance activities within the framework of the Qatar Financial Center.
The banking sector in Qatar includes four Islamic banks out of a total of 16 banks, including four conventional local commercial banks, a specialized bank (Qatar Development Bank), and seven branches of conventional foreign banks, in addition to the presence of a representative office for a foreign bank.
Qatari Islamic banks operate through a network of internal and external branches of more than 64 branches. These Islamic banks account for more than a quarter of the market share of the banking sector in Qatar. Three of these banks are classified among the ten largest Islamic banks in the world regarding assets, where Qatar Islamic Bank( QIB) is still the fourth largest Islamic bank. As noted in the year 2021, the rise in the assets of MasrafAl Rayan increased from the seventh rank to being the fifth largest Islamic bank, in addition to the entry of Dukhan Bank for the first time among the ten largest Islamic banks, being the eighth largest Islamic bank in terms of assets globally.
The Qatar Central Bank includes under its oversight umbrella several insurance companies, including five independent takaful insurance companies: Qatar Islamic Insurance Company, AlKhaleej Takaful Insurance, Damaan Islamic Insurance Company – Beema, General Takaful Company,an affiliate of Qatar General Insurance & Reinsurance Company (QGIRCO), and Doha Takaful Company, a subsidiary of Doha Insurance Group. Five national conventional insurance companies, four branches of foreign conventional insurance companies, and representatives of four conventional insurance companies are also operating in this sector.
Also, three Islamic finance companies operate under the umbrella of the Qatar Central Bank, along with two investment companies and five Islamic investment funds: Al Bait Al Mali Fund, Al Rayan GCC Fund (A), Al Rayan GCC Fund (Q), Tfi Securities Fund, and Al Rayan Qatar ETF. These funds operate inside and outside the State of Qatar, in addition to the QE Al Rayan Islamic Index, which is one of the indicators of the total return as it reflects the price performance in addition to the revenues obtained from reinvesting the dividends of listed companies.
Dr. Khalid bin Ibrahim Al-Sulaiti, Vice Chairman of the Board of Directors of Bait Al-Mashura Finance Consultations, said, the Islamic Finance Report in Qatar monitors the performance of Islamic financial institutions in Qatar, including Islamic banks, Takaful insurance companies, and Islamic finance and investment companies.
Moreover, he added, the report views the performance of Islamic financial products represented in investment funds and Islamic Sukuk and tracks the movement of the Islamic financial market.
“We, at Bait Al-Mashura, are proud to be an active member in the process of Islamic finance in Qatar and the world, which is witnessing a remarkable increase in demand for its services and products, as we are keen to provide knowledge and professional support to the Islamic financial industry to serve our local community, and all researchers and those interested in the Islamic finance sector in Qatar.”
Sulaiti stressed that the success of the institutional performance is preceded by belief in the idea and sacrifice for its realization, and Islamic finance emerged as a corrective and developmental idea that addresses the issue of money and its development within the framework of a good shariah environment that achieves the purposes and objectives. Therefore, it was incumbent upon all Islamic finance institutions, workers and researchers not to omit the teleological purposes of the great idea to achieve the development and well-being of the individual and society.