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The IFSB issued the Tenth Edition of its Annual Flagship Publication: The Islamic Financial Services Industry (IFSI) Stability Report 2022

Date posted: 19 August 2022

19 August 2022, Kuala Lumpur, MALAYSIA – The Islamic Financial Services Board (IFSB) officially launched the Islamic Financial Services Industry (IFSI) Stability Report 2022. The IFSI Report 2022 was launched by the Deputy Governor of Central Bank of Nigeria (CBN) H.E. Dr Kingsley Obiora on behalf of the CBN Governor and Deputy Chairman of the IFSB Council 2022 – H.E. Godwin Emefiele, the Vice President Operations - IsDB, Dr Mansur Muhtar, the Chairman of Jaiz Bank PLC - Umar Mutallab and the Managing Director/CEO of Jaiz Bank PLC - Hassan Usman at Abuja International Conference Centre on 15 August 2022 and it was attended by over 950 participants including ministers, state governors, international dignitaries, Shari’ah Scholars, and other global industry stakeholders.

Since its maiden edition in 2013 and now entering into its 10th year of publication, the report has over the years become a benchmark publication for the IFSB and numerous other stakeholders for tracking the growth, development, and stability assessment of the Islamic financial services industry.

The IFSB Secretary-General, Dr. Bello Lawal Danbatta stated that “the IFSI Stability Report 2022 takes place at a time when the global financial system is gradually recovering from the impact of the COVID-19 pandemic despite the emergence of new mutations of the virus. In addition, new financial stability risks have also arisen from events such as the Russia–Ukraine conflict which has intensified pre-existing inflation concerns due to soaring oil and commodity prices, and disruptions in global supply chains.” He stated further that “notwithstanding, the total worth of the IFSI had increased to an estimated USD 3.06 trillion in 2021 and that, the IFSI sustained its growth momentum recording a growth rate of 11.3% year-on-year (y-o-y) based on significant improvement across the three segments of the IFSI, especially in Islamic banking and the Islamic Capital Market.”

Key highlights of the IFSI Report 2022 include:

• The Islamic banking segment retained its dominance and accounted for 68.7% of the global IFSI assets in 2021. The segment registered a y-o-y growth of 6.5% in assets, 8.1% in financing, and 7.3% in deposits in 2021. The number of systemically important jurisdictions also increased to 15.
• The ICM sector as at end of 2021 accounted for 30.5% of the global IFSI assets on the back of a positive performance due to the sovereign and multilateral ṣukūk issuances in key Islamic finance markets to support fiscal financing and eco-friendly environment projects.
• Islamic funds also recorded a moderate growth of 6.0% in terms of the total value of Assets under Management (AuM), while the Islamic equity indices experienced similar movements to the conventional market, but again outperformed their conventional counterparts in 2021. 
• The share of the global takāful industry in the global IFSI declined marginally to 0.8%. However, global takāful contributions grew by 4.8% (y-o-y and in nominal terms) in 2020, with a 10-year (2011–20) compound average growth rate of 4.7%. 
• Notwithstanding the potential downside risks and the lower global economic growth projection, the global IFSI is expected to remain resilient. This is based on the limited direct exposure of many Islamic finance jurisdictions to the impact of the Russia–Ukraine conflict, gradual recovery, and reopening of economies, an accelerated digital transformation process, and the improved financial soundness and resilience performance recorded in 2021. 

The IFSI Stability Report 2022 is available for download from the IFSB website, www.ifsb.org.