Doha, Sep. 9 (SANA) Qatar’s Islamic banking sector continues to expand, supported by the strength of the banking system, regulatory development, digital transformation and growing interest in sukuk and sustainable finance, according to a report by Qatar News Agency (QNA) on Wednesday.

Qatar Central Bank’s Financial Stability Report 2025 showed total banking-sector assets rose 5.1 percent in 2025. The capital adequacy ratio increased to 19.9 percent from 19.6 percent in 2024, while the Common Equity Tier 1 ratio rose to 15.7 percent from 15.2 percent. The nonperforming loan ratio declined to 3.4 percent from 3.6 percent.

A Bait al-Mashura Financial Consultations report said total Islamic finance assets in Qatar reached about QR718.5 billion in 2025, up from QR682.3 billion in 2024. Islamic banks accounted for 85.8 percent, or QR616.5 billion, up 5.3 percent, representing about 28 percent of total banking-sector assets.

Islamic banks’ domestic assets reached QR554.3 billion, while deposits rose 7.5 percent to QR364.4 billion. Financing increased 4.2 percent to QR418.3 billion, representing about 29 percent of total banking-sector financing.

The banks accounted for 63 percent of consumer financing, 44 percent of real estate financing, 42 percent of contracting financing and 34 percent of industrial financing. About 96 percent of their financing was directed to the domestic market.

Abdul Basit al-Shaibei, QIIB CEO, quoted by QNA, said the sector’s growth is supported by Qatar’s strong economic environment, financial innovation and investment in digital infrastructure. Digital transformation, he added, has improved efficiency, reduced costs and enhanced customer experience.

Al-Shaibei also highlighted the growth potential of the sukuk market, citing QIIB’s $700 million sukuk issuance in 2012, which attracted more than $5 billion in subscriptions, and its $500 million Oryx sustainable sukuk listed in London, which attracted demand exceeding eight times the issue size.

Khalid bin Ibrahim al-Sulaiti, deputy chairman of Bait al-Mashura Financial Consultations, quoted by QNA, said digital transformation has become a key driver of Islamic banking growth. Islamic fintech has exceeded $198 billion in market value and is projected to reach $341 billion by 2029, with an annual compound growth rate of 11.5 percent.

Al-Sulaiti also highlighted Qatar’s sustainable sukuk market, noting that issuances had exceeded QR20 billion and that the first quarter of 2026 saw the listing of the first green sukuk on the Qatar Stock Exchange, a QR500 million issuance by al-Rayan Bank.

He identified global economic risks, funding-cost volatility, competition from conventional banks and the need to align digital transformation with regulatory and Sharia requirements among the sector’s main challenges.

Despite these challenges, al-Sulaiti expects Islamic banking in Qatar to continue growing over the next five years, driven by private-sector financing, renewable energy, green projects, innovation and economic diversification.

Islamic finance in Qatar also includes takaful insurance, finance and investment companies and investment funds. Islamic financing accounted for 78.8 percent of the assets of licensed finance companies at the end of 2025, up from 74.2 percent a year earlier.

The figures point to a broader expansion of Qatar’s Islamic finance industry into digital banking, artificial intelligence, sustainable sukuk and financing for projects linked to economic diversification and a sustainable, knowledge-based economy.

H.H