UAE targets AED2.56t in Islamic banking assets by ’31

The UAE’s newly approved Islamic finance and halal strategy is expected to significantly accelerate the growth of the sector, with targets to more than double Islamic banking assets to AED2.56 trillion ($697.5 billion) by 2031 from AED986 billion ($268.4 billion), Fitch Ratings reported.

The strategy also aims to increase local sukuk issuances to AED660 billion ($179.8 billion) and boost international sukuk listings in the UAE to AED395 billion ($107.5 billion).

A committee chaired by the governor of the Central Bank of the UAE (CBUAE) will oversee the strategy’s implementation. While full details are yet to be disclosed, Fitch anticipates further expansion underpinned by strong demand and continued regulatory support.

According to Fitch Ratings, Islamic banks in the UAE have consistently outperformed conventional peers in asset growth and accounted for over 17 per cent of total banking system assets as of January 2025. The broader Islamic finance industry was valued at more than $285 billion at the end of Q1 2025. Sukuk issuance rose 28 per cent year-on-year to $6.5 billion in the first four months of 2025.

Fitch rates $28 billion in UAE sukuk, with 92.1 per cent classified as investment grade. It also assigns ratings to five investment-grade Islamic banks in the country. The UAE ranks as the fourth-largest global sukuk market and remains one of the leading US dollar ESG sukuk issuers among emerging markets.

Attribution: Amwal Al Ghad English
Subediting: M. S. Salama