The MoU was signed by H.E. Khaled Mohamed Balama, Governor of the Central Bank of the UAE, and Dr. Eli M. Remolona, Jr., Governor of the Bangko Sentral ng Pilipinas. The document outlines collaboration between the two central banks in key fintech areas, including open finance and digital assets, in addition to cooperation in the development of the Islamic banking and finance industry.

“Under the MoU, both authorities will work to enable seamless cross-border payment transactions by integrating their instant payment platforms and considering the future option of the interlinking of national card switches and financial messaging systems. This initiative aims to streamline transaction processing and settlement, as well as enhance interoperability and improve operational efficiency. Additionally, it includes the exchange of expertise in developing central bank digital currency (CBDC) platforms for individuals and institutions,” the memorandum stated.

H.E. Khaled Mohamed Balama, during the occasion, said, “This agreement marks a significant step toward building a more connected and innovative financial ecosystem between the UAE and the Philippines. By leveraging advanced payment technologies and sharing expertise, we are laying the foundation for a new era of seamless integration and sustainable, innovation-led economic growth.”

Dr. Eli M. Remolona, Jr., Governor of the Bangko Sentral ng Pilipinas, added, “This partnership supports the BSP’s push to digitalise payments and make cross-border transactions more efficient. For Filipinos in the UAE, especially our overseas Filipino workers, this means better remittance channels and more efficient financial services for their families back home. We also see strong opportunities to collaborate in Islamic banking and finance as we work toward a sound and inclusive financial ecosystem.”

While the UAE has consolidated its position as an established name in the Islamic banking space, the Philippines has been steadily opening up the sector to its domestic economy. In February 2026, BSP streamlined the prudential regulatory guidelines for industry expansion.

Under the revised rules, conventional banks that meet the capitalisation requirements of their specific banking category are eligible to operate an IBU (Islamic Banking Unit), encouraging broader participation from conventional banks across all categories.

The BSP has also removed the requirement for IBUs to maintain a separate capital pool, thereby reducing the financial barriers for institutions entering the Sharia-compliant finance market.

To assist new entrants, the BSP has also brought a three-year observation period, which will start from the domestic financial institutions commencing their Islamic banking operations.

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According to Qatar Central Bank’s data, the Sukuk’s maturity periods varied as follows: QR1.5 billion (an addition to an existing issuance) with a maturity date of January 16, 2029, and a yield of 4.5%, and QR1.5 billion (an addition to an existing issuance) with a maturity date of August 24, 2030, and a yield of 4.5%.

In a post on X (formerly Twitter), the bank clarified that total bids for the Sukuk reached approximately QR8 billion. The central financial institution also unveiled support measures for banks in response to Iranian attacks that severely weakened the Gulf’s third-largest economy.

The central bank will now offer unlimited local currency repurchase facilities against eligible securities held by local banks in order to ensure deep liquidity in the local market. This new facility offers maturities of up to three months, enabling Qatari banks to manage cash flow with greater certainty amid the ongoing volatility.

The industry’s senior executives, while interacting with The Banker, also said that Qatar Central Bank would reduce the reserve requirement on deposits from 4.5% to 3.5%, releasing further liquidity into the system. The central bank has been quizzing lenders about their liquidity in past weeks.

Qatar’s economy has been among the worst affected by the ongoing Middle East conflict. An attack from Iran on the Gulf country’s Ras Laffan liquefied natural gas (LNG) production hub knocked out 17% of the nation’s energy export capacity, in addition to creating an estimated annual revenue loss worth USD 20 billion, which may span for the next three to five years.

However, Qatar Central Bank has been proactive in ensuring the banking and finance industry doesn’t feel the heat. It has already permitted banks to offer borrowers the option to defer loan principal and interest payments for a period of up to three months, in accordance with lenders’ existing internal policies and supervisory guidance.

Analysis from S&P Global Ratings projected Qatar and Bahrain as the most vulnerable in the Gulf region to external outflows of foreign and local funding. However, for Qatar, the government has a proven record of supporting both the Islamic banking and the wider finance sector.

“Liquidity continues to be strong, capital levels significantly exceed regulatory requirements, and provisioning provides strong coverage against credit risk. Banks continue to hold substantial liquidity in both domestic and foreign currency, and resources are sufficient to meet customer demand, support normal market activity, and meet any short-term funding pressures under stressed conditions,” QCB said while reacting to the S&P report.

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Fitch assesses liquidity using Bloomberg’s Liquidity Assessment (LQA) scores, which indicate security-level liquidity. The ratio can range from one to 100, with 100 signifying the highest liquidity. Generally, a score of 100 is assigned to securities with the lowest liquidation costs within an asset class, while securities with the highest costs get a score of one.

According to Fitch, LQA is a data-driven model that produces a daily security-specific liquidity surface that captures the relationship between volume, cost, and time.

“The LQA decline for investment-grade sukuk has been less severe than for speculative-grade sukuk on average,” the agency stated further.

“While LQA scores have declined in most GCC debt capital markets since the Iran war’s beginning, as well as for sukuk issuers in Turkey, Egypt and Indonesia. On the other hand, many rated Malaysian, Omani, and supranational sukuk have shown resilience in their LQA scores,” Fitch noted.

“Sukuk in the ‘BB’ and ‘B’ categories have the lowest LQA scores among all Fitch-rated sukuk globally on average, with the steepest liquidity fall compared to other rating categories since the war began. Sukuk in the ‘F1sf’, ‘AAA’, ‘BBB’, ‘AA’, and ‘A’ categories held the highest liquidity of all rated sukuk, but also faced declines, except ‘F1sf’,” it stated.

Sector-wise, corporates, infrastructure and project-finance sukuk had the lowest LQA scores among all rated sukuk globally, with the steepest liquidity falls. Asset-backed, supranational and sovereign sukuk, in contrast, maintained the highest liquidity levels, except asset-backed sukuk, whose scores increased.

“Fitch also analysed liquidity for 52 comparable sukuk and bonds from the same issuers. Liquidity was broadly similar in 50% of cases, sukuk were less liquid than bonds in 31%, and more liquid in 19%. GCC US dollar sukuk and GCC US dollar bonds have displayed broadly similar liquidity trends, with both declining since the war began. The average LQA score for GCC US dollar sukuk fell to 45 on 23 March from 56 at the end of 2025. The average score for GCC US dollar bonds dropped to 48 from 53 in the same timeframe,” the ratings agency remarked.

“About 64% of Fitch-rated sukuk had an LQA score above 50 on 23rd March, down from 82% in January 2025 (excluding local ratings and sukuk without an LQA score). Investment-grade sukuk are generally more liquid, with an average score of 65 as of March 23 (January 2026: 73), compared to 33 for speculative-grade sukuk (January 2026: 48). Historically, GCC DCMs have rebounded fairly quickly when tensions eased following previous Middle East geopolitical episodes, but the impact this time will depend on the scale and duration of the war,” it concluded.

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Commercial Islamic banks operate as normal market-based financial institutions. However, their operational framework, compliant with Sharia principles, sets these entities apart from the non-Islamic segment. These values prohibit the interest payment, also known as riba, and outlaw purely speculative transactions.

Besides these contractual obligations, Islamic banks finance the same needs (SMEs, trade, housing, equipment and imports) as their conventional counterparts. Financing gets structured around contracts anchored in the real economy, such as Murabaha (cost-plus financing that avoids interest-based lending), Ijara (leasing arrangement), or Musharaka (risk- and profit-sharing partnership).

Also, Islamic banking is gaining prominence in Africa. UAE-based Dubai Islamic Bank (DIB) made the first move in 2022. Through its subsidiary “DIB Bank Kenya,” the venture announced the opening of a branch in Nairobi’s business district to strengthen SME financing and facilitate trade flows between Kenya and the UAE. DIB’s strategy has been to capitalize on the East African country’s growing economic hubs.

In Egypt, Abu Dhabi Islamic Bank (ADIB) has taken a different approach, by consolidating its longer-established and deeply rooted presence further. ADIB’s growing prominence in Egypt also makes the North African major a key entry point for other Gulf-based commercial Islamic financial entities, which combine elements such as retail banking, corporate financing and capital market operations in their product offerings.

However, alongside the expansion of Gulf banks, there is also evidence of a less obvious but equally significant phenomenon: the development of African players to dominate the sharia-compliant market while using the Gulf as a springboard to raise their profile.

Nyla Bank, a Ghanaian fintech described as a pan-African digital Islamic bank project, was selected as a semi-finalist in the Milken Motsepe Prize in FinTech in 2024 and is set to make a presentation at the Middle East and Africa summit organised by the Milken Institute in Abu Dhabi. This, therefore, also suggests that the sector’s development is being driven by African players with ties to the Gulf.

Apart from physical networks, some transactions evidence the increasing incorporation of commercial Islamic banks into African financing circuits, especially regarding syndicated murabaha operations and capital markets interventions. The aforementioned operations evidence a gradual, though targeted, level of integration into African economies. The commercial dimension is complemented by the second pillar of Islamic finance in Africa: development institutions.

Discussing Islamic banking’s growth in Africa, Saudi Arabia is also playing an important role. Jeddah-based Islamic Development Bank has now emerged as a dominant force for multilateral Islamic financing on the continent. Its operations focus on public projects, trade finance and risk mitigation, going well beyond traditional banking activities.

Meanwhile, Kuwait has largely concentrated its Islamic banking activities in North Africa, with Egypt emerging as the primary hub. Kuwait Finance House also enhanced its presence in 2025 by changing the name of Ahli United Bank Egypt to “KFH Egypt.” KFH Egypt is an entity that is fully sharia-compliant and has a considerable branch network. This is in addition to capital markets; an example is the issuance of sovereign sukuk with the involvement of KFH.

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Net Interest Income from Conventional Banking and Net Income from Islamic Financing stood at RO 413.01 million for the year ended December 31, 2025, compared to RO 397.70 million for the same period in 2024, an increase of 3.8%. Non-interest income, on the other hand, was RO 174.18 million for the year ended December 31, 2025, as compared to RO 145.00 million for the same period in 2024, an increase of 20.1% due to Bank Muscat’s growth in business volumes and higher investment income.

Operating expenses for the year were RO 222.88 million, compared to RO 209.26 million for the same period in 2023, reflecting an increase of 6.5%. Net impairment losses on financial assets were RO 60.97 million as against the 2024 tally of RO 64.41 million.

Bank Muscat’s net loans and advances, including Islamic financing receivables, increased by 4.8% to RO 10,731 million as against RO 10,237 million as at December 31, 2024. Customer deposits, including “Islamic Customer Deposits”, increased by 6.7% to RO 10,430 million as against the 2024 tally of RO 9,777 million.

The full results for the year ended December 31, 2025, along with the complete set of unaudited financial statements, will be released following the approval of the Board of Directors of the Bank at its meeting scheduled later in January 2026.

Bank Muscat’s gains also coincide with the latest numbers emerging from the Gulf country’s banking sector. By the end of November 2025, credit provided by conventional commercial financial institutions saw an increase of 8.5%, indicating a robust growth in banking activities. Credit to the private sector rose by 5.8%, reaching RO 21.9 billion during the same timeframe.

In terms of investments, the Gulf country’s conventional commercial banks recorded a 7.4% rise in total investments in securities, amounting to approximately RO 6.4 billion by the end of November 2025. Investments in government development bonds experienced a 9.5% year-on-year increase, totalling RO 2.2 billion. Investments in foreign securities, on the other hand, dropped by 4.4%, settling at RO 2.3 billion over the same period.

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Mobilink Bank inaugurated its first dedicated Islamic banking branch in December in Karachi, the South Asian country’s economic hub. A second Islamic banking branch is scheduled to commence operations in Peshawar in the coming weeks, followed by a phased rollout of Islamic banking services across the nation.

During the occasion, Aamir Ibrahim, Chairman of the Mobilink Bank Supervisory Board, said, “With the launch of Islamic banking at Mobilink Bank, we are reinforcing our commitment to inclusive, customer-centric financial services. The continued growth of Islamic banking in Pakistan reflects strong demand and significant potential, which we are proud to address through solutions that empower individuals and businesses.”

Mobilink Bank received its Islamic Banking licence from the State Bank of Pakistan in 2025 itself.

The launch of Mobilink’s Islamic banking services supports the venture’s strategy to broaden financial choice and inclusion for individuals, micro-entrepreneurs, and small businesses across Pakistan. Mobilink Bank’s Islamic banking portfolio will also offer Shariah-compliant deposit and financing products designed to meet daily financial needs, apart from supporting business growth.

“Expanding into Islamic banking allows us to directly respond to the needs of a large segment of Pakistan’s population. By offering transparent, faith-aligned products through both physical branches and digital channels, we are increasing access to formal financial services across the country,” noted Haaris Mahmood Chaudhary, President and CEO of Mobilink Bank.

According to the State Bank of Pakistan’s “Islamic Banking Bulletin” for the period ending September 2025, assets reached approximately PKR 12.7 trillion (around USD 44 billion), accounting for 21.6% of total banking sector assets. Islamic banking deposits represented 26.5% of total deposits across the South Asian nation. On a year-on-year basis, Islamic banking assets and deposits grew by 28.3% and 29.7%, respectively, underscoring the sector’s strong momentum and rising adoption ratio among customers.

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The Central Bank of Oman’s data revealed that the segment currently represents 19.2% of Oman’s total banking assets. The amount of money given by Islamic banks increased by 14.2% to about 7 billion rials.

Furthermore, by the end of December, deposits at Islamic banks and windows had increased by 21.3% to almost 60.7 billion rials.

According to CBO, the Islamic banking sector in Oman has been steadily growing, which is indicative of the growing demand for financial services that adhere to Shariah and its role in the nation’s banking sector.

The banking sector in Oman offers both traditional and Islamic banking services. Both independent financial institutions and special branches of traditional banks—which may be domestic or foreign organisations with Omani licenses—offer Islamic banking.

The CBO released initial guidelines in May 2011 to establish Islamic banking in the Sultanate. This framework allows traditional financial institutions to coexist with fully functional Islamic banks and Islamic windows.

A Royal Decree amending the Banking Law in December 2012 formally established the initiative by requiring Islamic banks and windows to create their own Shariah supervisory boards.

Additionally, it permitted the establishment of a central High Shariah Supervisory Authority by the CBO. In response to these developments, CBO released the Islamic Banking Regulatory Framework and rules pertaining to the Hawala Settlement and Safeguard Account in December 2012.

This programme promoted financial inclusion, economic diversification, and responsible financial practices, all of which were in line with Oman’s overarching economic strategy. Since its establishment, Islamic banking in Oman has been instrumental in furthering Oman Vision 2040’s goals.

“This sector has played a vital role in augmenting national savings and investment, contributing to the development of a more diversified investment base and availability of a wider range of financial products and services for consumers and businesses,” CBO concluded.

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“Let’s Own Tomorrow”: A Bold Vision For An Innovative Future

The bank’s new identity and slogan, “Let’s Own Tomorrow,” reflect Warba’s commitment to providing comprehensive financial solutions that serve a diverse customer base, from individuals and entrepreneurs to investors and large corporations. This identity embodies the bank’s evolution over the years, marked by a transformative shift in digital services that enhances the customer experience and positions Warba as a trusted partner.

Al Sunbula Account 2025: Unique Opportunities And Exceptional Benefits

Warba Bank launched the Al Sunbula Account 2025 Campaign, making it the largest prize account of its kind in Kuwait in terms of both the number of winners and the total prize value distributed. The account offers weekly draws, where 20 customers each win 1,000 Kuwaiti dinars, in addition to six grand prize draws throughout the year, each awarding a lucky winner with 250,000 Kuwaiti dinars.

Royal Banking: Exclusive Banking Services For Premium Customers

To provide a tailored banking experience, the bank introduced Royal Banking, offering a niche account and services to high-net-worth customers. These customers benefit from a dedicated relationship manager who serves their individual needs, as well as advanced digital services and exclusive banking lounges across multiple branches, ensuring they always receive a premium banking experience.

Digital Transformation: Innovation In Customer Service

Warba Bank became the first bank in Kuwait to introduce an AI-powered personal financial advisor, the “Warba Advisor.” This service provides customers with personalised financial advice, leveraging data analysis and machine learning to help them make informed decisions. Additionally, Warba introduced Beyond for small and medium enterprises (SMEs), offering them comprehensive banking solutions, including multi-currency accounts, a payment gateway, and point-of-sale (POS) devices.

Green Financing And Sustainability

Warba Bank issued $500 million in green sustainable Sukuk, becoming the first Islamic bank in Kuwait to launch this type of Sukuk. The funds are directed toward financing eco-friendly projects that support the green economy and sustainable development.

Gold Account: Flexible Investment Options

The bank recently introduced new features to the Gold Account, allowing customers to track historical price changes and make informed investment decisions through the Warba app, which offers a reliable and advanced investment tool.

Global Recognition For Excellence

Warba Bank has earned numerous international awards, including “Most Sustainable Bank in Kuwait 2024,” “Best Islamic Digital Banking Services,” and the “Highest Growth in Credit Card Activation on Digital Wallets” from Mastercard.

Social Responsibility: Investing In The Community

Warba Bank prioritises youth empowerment through initiatives like the Rowad programme, while also supporting environmental sustainability programmes such as carbon footprint reduction, health awareness campaigns, and financial literacy education.

A Promising Vision For 2025

As Warba Bank enters a new phase of growth and expansion, it remains committed to enhancing its investments in technology and digital banking services, in line with its ambitious vision for a brighter future.

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Absa Islamic Banking was recently recognised as the “Best Islamic Banking Window – South Africa” by International Finance for 2024. The team behind the success is seasoned financial services professionals guided by Shaheen Suliman, who has previously held various leadership roles in Balance Sheet Restructuring, Treasury Structuring, and Islamic Banking expansion in Africa. He is a Chartered Accountant and a CIMA Diploma holder in Islamic Finance. Shaheen has received many innovation awards and was recognised as “Upcoming Personality in Global Islamic Finance” at GIFA 2023.

In his recent interview with International Finance, the banking veteran spoke in detail about what sets Absa Islamic Banking apart from its competitors, and giving a sneak peek of future plans.

Excerpts from the interview:

Absa Islamic Banking was honoured as the “Best Islamic Banking Window – South Africa” by International Finance for 2024. What factors do you think contributed to this recognition?

Absa Islamic Banking’s recognition by International Finance is a reflection of our unwavering commitment to being a trusted partner for our clients. We understand that our clients have diverse needs, and we continuously innovate to deliver solutions that put them at the centre of everything we do.

This award highlights the progress we have made in expanding our market presence as a result of our holistic product offering that caters to both the personal and business banking needs of our customers. Our embedded processes and structures are rigorously designed and then certified by an independent Shariah Supervisory Committee.

Earlier this year, Absa Islamic Banking announced its new brand repositioning. Tell us about it.

Our new signature or strapline “Your Story Matters,” signals a shift to meeting our customers with empathy during every stage of their journey. This promise reflects our commitment to delivering an experience that is seamless, intuitive and anticipatory. We believe every story holds significance, regardless of its scale.

That’s why we’re focusing our solutions and services around the needs of people, the planet, businesses and society. We want to be more human-centred whilst being guided by empathy. Our goal is to ensure the stories of our customers, colleagues and communities are not only heard, but also supported with tailored solutions, beyond banking. This also applies to the Absa Islamic Banking offering.

What upcoming features and services can clients look forward to from Absa Islamic Banking?

Our clients can expect continued innovation and a broader range of Shari’ah-compliant products tailored to meet their evolving financial needs. Our segment and sector-based approach ensures that all customers are catered for, and we are constantly exploring ways to improve the customer experience.

Additionally, enhancements to our treasury model have allowed us to offer more competitive and flexible pricing, further enhancing the value we provide to our clients. As always, our client’s financial well-being and Shari’ah-compliance will remain at the core of everything we do.

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IsDB announced in a press release that the United States-based agency has confirmed its short-term issuer rating at Prime-1, the highest classification on offer. The statement also stated that Moody’s has rated IsDB AAA since 2006.

AAA-rated obligations are subject to the lowest level of credit risk and are considered to be of the highest quality, according to the agency. Prime-1 indicates the greatest ability to repay short-term debts.

IsDB, a multilateral development finance institution headquartered in Jeddah, was established in 1973 with a primary concentration on Islamic Finance for infrastructure development.

IsDB further stated that the affirmation is indicative of Moody’s belief that the capital position and asset performance of IsDB will continue to be robust. The bank’s preeminent position as one of the few regular issuers of highly-rated benchmark-size sukuk in the international capital markets, low funding costs, and strong liquidity and funding position all contribute to this expectation.

The financial institution also noted that its robust credit profile is a result of the track record of support from member countries, which has been demonstrated through a series of general capital increases.

In addition, IsDB stated that its leverage ratio is anticipated to remain substantially below the median for AAA-rated multilateral development banks, as a result of the capital increases.

Currently, the financial institution has 57 members, with Saudi Arabia being the largest single shareholder, accounting for 22.5% of the total capital. In the following order, Libya and Indonesia possess a capital share of 9.03% and 7.04%, respectively.

IsDB has been a provider of long-term, sustainable, and ethical financing structures to its member nations to facilitate economic growth and development since its inception.

“IsDB is staunchly dedicated to assisting its member countries in the pursuit of sustainable development and economic growth by means of these strategic initiatives,” the venture stated, adding that these investments not only satisfy immediate requirements but also establish the groundwork for long-term prosperity and resilience.

IsDB allocated USD 165 million in June 2024 for the construction and operationalisation of green, resilient, and sustainable schools in earthquake-prone and earthquake-affected regions of Turkey.

In the same month, it also allocated USD 156.3 million to Turkmenistan for the establishment of three oncology centres and the training of healthcare providers.

Additionally, IsDB allocated USD 47.68 million to Suriname in June to improve the country’s electricity transmission and distribution network.

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