Thomson Reuters has announced further findings from its collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB), on the eve of the World Islamic Banking Conference in Bahrain.
The ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI) measures five key components – quantitative development, governance, social responsibility, knowledge and awareness – which are adjusted for the relative size of each country. Based on this analysis, the IFDI has found that Bahrain is the second most developed Islamic finance sector, after Malaysia, with total Islamic finance assets of $47 billion. The UAE coming in as the third most developed Islamic finance country.
Bahrain had the second most developed Islamic finance knowledge landscape, with 23 institutions offering degrees and courses in Islamic finance. In terms of research, the Kingdom had 17 research papers on Islamic finance published in the last three years, of which 12 were peer reviewed. Bahrain also performed well in terms of governance, with a comprehensive regulatory framework covering all aspects of the Islamic finance industry. This was supplemented with strong Sharia governance, with the largest number of Islamic finance scholars (53) based in the Kingdom.
The Islamic finance industry in Bahrain also performed well in corporate governance and corporate social responsibility disclosures. In terms of awareness, Bahrain had five seminars and five conferences related to Islamic finance in 2012, and 551 news articles on the subject.
Russell Haworth, Managing Director, Middle East & North Africa, Thomson Reuters, said, “This indicator, the first of its kind for the Islamic Economy, will provide companies with much needed unbiased and reliable multi-dimensional analysis regarding the development of the Islamic finance industry. The development of Islamic finance infrastructure will be a key driver for the establishment of the Islamic finance industry.”
Khaled Al-Aboodi, Chief Executive Officer, Islamic Corporation for the Development of the Private Sector, said, “Today’s findings are a perfect example as to how and why the IFDI can identify the critical growth components of the Islamic Finance industry. Bahrain sits at the forefront as a leading Islamic finance hub. However, our research help the country identify areas of improvement, and monitor their progress over time to ensure that they maintain their position as a leading Islamic finance hub.”
Dr Sayd Farook, Global Head of Islamic Capital Markets for Thomson Reuters, said, “Unlike most commentaries on Islamic finance that simply focus on assets and performance, the IFDI provides equal importance to all aspects of the industry when assessing its depth and development. Our initial research indicates that Bahrain is one of the leaders in the Islamic finance industry, identifying their development in each category. This research will enable policy makers and practitioner to compare themselves with their peers and prioritise areas that require development to ensure they retain their leadership position. Thomson Reuters is committed to leading the charge in information and analysis to support the global Islamic finance industry, with Bahrain continuing to be a key country of focus.”
The IFDI, which was officially launched at the Global Islamic Economy Summit in Dubai last week, aims to expand the scope of Thomson Reuters’ universe of Islamic finance content, research and news analysis and to develop an unbiased multi-dimensional barometer for the development of the Islamic finance industry.