Participation banking is the name given to Islamic banks mainly in Turkey[1][2][3][4] as well as MENA region and in other pan-Islamiccountries. Beginning of the era 2000, while participation banks reach only 2%of the net assets, in 2010 the rate increased up to 4,3%. As a result of the momentum of high growth in the last 5 years, the rate increased up to 6, 1% with 90,7 billion TL asset in the third quarter of 2013. Although, regarding the profit margins of the participation banks, Malaysia, Indonesia and Gulf countries have more than 50% of the market share, it is stated that Turkey has more potential in growth.
Also, Turkey, Pakistan, Bangladesh and Indonesia stand as the leading countries among the participation banks.[5] Saudi Arabia, the UAE and Malaysia are the three largest participation banking markets, in terms of assets.[6] Iran has 36% of the worldwide assets of the participation banks, Malaysia has 17%, Saudi Arabia has 14% and Turkey has 3,1% of the market share. According to EY’s ‘Banking in emerging markets’ report, the assets of global participation banking reached US$930b in 2015, with growth rates declining across all regions compared to previous years.[6]
List of participation banks
- Ziraat Participation Bank
- Vakıf Participation Bank
- Turkey Finance Participation Bank
- Albaraka Türk Participation Bank
- Kuwait Turk Participation Bank
Defunct
- Asia Participation Bank (Est. 1996, closed in 2016)
References
- ^“What is Participation Banking”. IGI global. Retrieved 24 May 2018.
- ^“Performance comparison of Islamic (participation) banks and commercial banks in Turkish banking sector”. Emerald Insight. Retrieved 24 May 2018.
- ^“Megabank project to support Turkey’s aim to increase share in participation banking”. Daily Sabah. Retrieved 24 May 2018.
- ^“STABILITY OF THE PARTICIPATION BANKING SECTOR AGAINST THE ECONOMIC CRISIS IN TURKEY”. ecojournals.com. Retrieved 24 May 2018.
- ^“Participation Banking in Turkey – Deloitte”. Deloitte. Retrieved 24 May 2018.
- ^ Jump up to:ab “Global participation banking assets reached US$930 billion in 2015”. Ernst & Young. Retrieved 24 May 2018.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.