IDB's assets are estimated at US$ 17 billion. Operational assets are estimated at $ 10 billion. Last year's loans ratio was about 13 percent, totaling $ 7.9 billion.
These include project finance and trade operations. We expect that the bank's operations will grow by 15 percent this year. The bank decided to increase its annual total operations by 30 percent, during the period 2009-11, in order to help member states to weather the effects of the world financial crisis.
Starting from 2013, the bank's financing went back to its earlier growth rates, estimated at 15 percent.
In addition to the above, insurance commitments issued by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) until the end of 2012 are estimated at $ 17 billion.
The global crisis led to an increase of the financing activity in the member states. As a result of the crisis, the global credit squeeze and recession made many countries turn to the bank more than ever to seek help in their development projects.
The annual growth rate of financing operations was increased from 15 percent in 2009 to 30 percent by the end of 2011. Thus the growth in the bank's operations during these three years was 90 percent.
Although IDB is an international development institution that complies with the Shariah rules in all its transactions, the bank's annual earnings were around 5 percent. We do not distribute dividends. We allocate them to the various operations and to shore up the bank's reserves. The bank's profits in 2012 were $ 175 million, with an expected growth rate similar to the previous years.
Islamic banking is a fast-growing global industry. This is due to the integration with the real activity. There are now around 300 Islamic banks all over the globe. In addition, Islamic banking windows in international European banks stand now at 30, and are expected to rise.
It is to be noted that Islamic banking is not confined to Muslim communities. Many social sectors participate in it.
Islamic banking now can boast a solid infrastructure and this will surely help it to push forward in international banking operations. I believe now is the right time to invigorate the industry to transform the quality of its products and services in order to better serve the world's aspirations for safer and more creative banking.
We need to increase intra-country trade among Islamic nations. This is a strategic objective and a necessity imposed by the global economic developments.
The volume of intra-country trade is 18 percent, which is not enough to warrant the establishment of a common Islamic market. That project is a dream we want to come true. It would facilitate our adaption to a globalized economy and our response to the external challenges in commerce, productivity, and technology. It would also increase our competitiveness in international markets and help achieve social and economic growth in Islamic nations.
(Arab News / 21 May 2013)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com