The Islamic finance sector had a mixed record of growth in assets and a steep decline in profits during the global credit crisis last year compared to 2008, according to a McKinsey and Company study issued last week in Bahrain.
Obtained exclusively by Gulf News, the authors of the report titled Global Competitiveness Landscape of Islamic Finance, showed that while profitability of all banks declined, the fall has been steeper for Islamic banks, largely due to higher provisions and lower investment income.
Higher investment losses are partly due to banks' greater exposure to risky assets such as real estate.
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