The Middle East, Europe and Africa markets are expected to see consolidation of smaller Islamic banks with weaker franchises, rating agency Fitch said.
Fitch Ratings also rated ‘neutral’ outlook for EMEA Islamic banks in 2025, saying Islamic banks are expected to maintain solid liquidity, adequate capital buffers, and stable asset quality.
Consolidation will continue to shape the market in Europe, the Middle East and Africa (EMEA) next year, particularly when it comes to smaller Islamic banks with weaker franchises, said Redmond Ramsdale, head of Middle East Bank Ratings and Islamic Banking, Fitch Ratings, Trade Arabia reported.
Sound profitability should continue despite lower rates, which will remain restrictive in many markets, he said.
In the GCC, Jordan, Iraq and Turkey, Islamic financial institutions’ market share of sector assets was 9 per cent–85 per cent, with growth likely to outpace conventional banks in 2025.
Ramsdale said that Sharia-sensitivity, awareness and confidence are higher in these markets, with supportive regulation and the segment being long-established.
In some EMEA markets with lower market shares, governments have strategies to promote the sector, while in others it could grow organically as banking penetration in general rises, he said.
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