The Saudi Central Bank (SAMA)-licenced financing company recorded total operating income of SAR 424.1 million in 2025, an increase of 59% compared with SAR 267.3 million in 2024.

Net profit after Zakat increased by 73% to SAR 40.3 million, while operating profit before Zakat and expected credit losses reached SAR 99.3 million, representing year-on-year growth of 55%.

The expansion was also reflected in Raya Financing’s balance sheet, with total assets increasing by 56% to SAR 3.09 billion. Its net financing portfolio across finance lease and Murabaha reached approximately SAR 2.86 billion by the end of 2025.

Growth Beyond the Numbers
The performance reflects Raya Financing’s broader strategy to expand its presence across consumer, automotive and SME financing while developing solutions that respond to evolving customer and business needs in the Kingdom.

SME financing and productive assets remain important areas of focus for the company as Saudi Arabia continues to strengthen the contribution of small and medium-sized businesses to the national economy under Vision 2030.

Raya is investing in its digital platforms and operational infrastructure as it works toward more seamless end-to-end digital financing journeys and greater process efficiency.

At the same time, the company continues to evolve its financing propositions to provide greater flexibility and address different customer needs across the financing journey.

Strengthening the Foundation for Expansion
As its financing portfolio grows, Raya Financing has taken steps to strengthen and diversify the funding supporting its expansion.

The company executed portfolio securitisation transactions with major financial institutions, including Saudi National Bank and Gulf International Bank.

Raya has advanced a SAR 500 million multi-issuance Sukuk programme following Board approval and regulatory approvals from SAMA and the Capital Market Authority.

The programme represents another step toward diversifying the company’s long-term funding sources and supporting future portfolio growth.

The company’s continued expansion, financial performance and strategic development come alongside its recognition at the International Finance Awards 2026.

Looking ahead, Raya Financing plans to continue building on its momentum through sustainable growth, product development, digital transformation, and further expansion across key financing segments.

With Saudi Arabia’s financial services sector continuing to evolve, Raya aims to strengthen its role in the market by developing financing solutions that serve individuals and businesses while contributing to the Kingdom’s broader economic ambitions.

Image Credit: Raya Financing

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The UAE’s debt capital market expanded to about USD 320 billion outstanding at the end of June, as borrowers turned increasingly to US dollar funding despite regional volatility, according to Fitch Ratings.

The market grew 3% year on year in the first half of 2026, while US dollar debt issuance reached USD 24 billion, 40% higher than in the second half of the previous year.

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The report, titled “The Islamic Finance Connector Era,” finds that Islamic finance assets grew 13% in 2025 alone, with the sector now spanning close to 100 jurisdictions. Sukuk outstanding stood at USD 1 trillion in 2025, while Islamic banking remains systemically important in 15 countries, according to LSEG analysis based on the Islamic Finance Development Indicator cited in the report.

Standard Chartered argues that the next phase of expansion will be defined less by how much capital is available and more by how effectively institutions can move that capital across borders.

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As per the rating agency’s estimates, the industry was worth about USD 94 billion by the end of the first half of 2026, with Islamic banking accounting for 75% of that total and sukuk outstanding making up a further 22%. Sharia-compliant collective investment undertakings (CIUs) and takaful companies comprised the remainder.

Islamic banks have been gaining ground on their conventional counterparts, now holding around 42% of domestic banking assets, according to Fitch. Growth is being underpinned by strong public demand, a supportive regulatory environment, and broadly stable operating conditions.

“Sukuk’s share of Bahrain’s debt capital market climbed to 37% by the end of the first half of 2026, up from 35% a year earlier. Outstanding sukuk surpassed $20 billion in the period, a 16% annual rise that outstripped growth in conventional bonds. “We forecast government debt, including sukuk, to continue to grow. The net asset value of Bahrain’s sharia-compliant CIUs reached USD 2.5 billion by the end of the first quarter of 2026, up 24.5% year on year,” Fitch said.

The forecast comes even as the broader sukuk market has had a rougher year. Fitch noted separately that global sukuk issuance fell 36% year on year in the first half of 2026 across the GCC, Malaysia, Indonesia, Turkiye and Pakistan, to USD 125 billion, as volatility and rising yields tied to the Iran war weighed on activity. Global sukuk outstanding nonetheless grew 11% to USD 1.1 trillion, with the trajectory for the rest of the year hinging on whether the ceasefire holds.

In Bahrain specifically, Fitch said the Kingdom’s banking system faces limited immediate credit risk from the conflict. The Central Bank of Bahrain has already rolled out a loan deferral and liquidity support program covering all banks in the country.

The sector is also undergoing consolidation, with authorities encouraging mergers to address a market that remains highly concentrated. Fitch said this presents a challenge for both Islamic and conventional lenders, many of which are competing for a limited pool of deposits and lending opportunities in a small domestic economy.

Bahrain continues to host key Islamic finance standard-setting bodies, including the Accounting and Auditing Organization for Islamic Financial Institutions and the International Islamic Financial Market, reinforcing its role as a regional hub even as growth increasingly comes from sukuk issuance rather than balance-sheet expansion alone.

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As per Bashar Al Natoor, managing director and global head of Islamic Finance at Fitch Ratings, the Southeast Asian country has remained a unique “local story” that has successfully buffered itself against external shocks, including geopolitical volatility.

“During the crisis, the Gulf Cooperation Council (GCC) debt markets saw minimal dollar issuances, rising yields, and tighter liquidity, while Malaysia’s market remained resilient with steady foreign investor participation, growing non-sovereign issuance, and innovations like tokenized sukuk, supported by strong ringgit stability and regulatory development. It’s impacted by its own local story,” the senior official told the StarBiz.

Al Natoor expects a resilient debt capital market that will continue to expand as envisioned in Malaysia’s local Capital Market Master Plan (2026 to 2030). Fitch also predicts the nation’s debt capital market (DCM) to expand modestly to reach USD 640 billion outstanding by the 2026-end.

“This growth is anchored by a deep domestic investor base, stable yields, and the ringgit’s performance as one of Asia’s most resilient currencies. Unlike the GCC, where US dollar issuances were scarce during the height of the conflict, activity in the Malaysian market continued almost as normal,” the ratings agency remarked.

“A key trend for the remainder of 2026 is the strategic shift from sovereign to non-sovereign debt. While the Malaysian government is engaging in fiscal consolidation, aiming to reduce federal debt to 60% of GDP by 2030, the private sector is picking up the mantle as well. Non-sovereign issuance rose by 17% year-on-year in the first five months of 2026, accounting for 68% of total DCM activity,” said Bashar, terming the transition a sign of market maturity.

“We expect more non-sovereign to go and issue into the market, and I think that stands out,” he stated, noting that corporate and bank issuers are increasingly defining the market’s trajectory.

“Banks remain the largest non-sovereign contributors, often using sukuk for refinancing and opportunistic funding. The local Islamic banking sector, meanwhile, continues to outpace conventional growth. Islamic banking assets grew by 7% to reach USD 312 billion by the end of 2025, while conventional assets grew by only 4%,” Fitch said further.

Talking about the growth of the Islamic financial ecosystem in Malaysia, the industry now represents 44% of the Southeast Asian country’s total system loans, nearing the Anwar Ibrahim government’s 50% target.

Bashar attributed this success to the most “evolved ecosystem” in the world, which integrates issuers, investors, takaful (Islamic insurance), haj funds, and pension funds like the Employees Provident Fund (EPF) into a cohesive syariah-compliant framework.

“Malaysia has cemented its position as the world’s largest environmental, social, and governance (ESG) sukuk market, holding a 31.6% share of global outstanding ESG sukuk as of mid-2026. ESG-linked debt in the country rose by 44% to USD 20 billion, heavily supported by government tax incentives. Sukuk remains the dominant vehicle for these sustainable investments, accounting for 94% of total ESG debt issuance,” Fitch noted.

Malaysia is also taking a lead role in terms of innovating in the industry. The Southeast Asian nation saw its first tokenized sukuk issuance in the first half of FY 2026. New regulations for private debt will likely further enable this niche.

Bashar, however, warned the use of technology could present a challenge for Malaysia’s Islamic financial ecosystem, as technological advancements are vital for maintaining a competitive edge.

“While the Islamic capital market is domestic-centric, foreign interest remains stable. Foreign holdings of government debt stood at 21.6% at the end of the first quarter of financial year 2026, a high figure compared to other Organization of Islamic Cooperation countries,” he told the StarBiz.

To further attract international capital, particularly from the GCC, the Anwar Ibrahim government plans to launch its first wakalah bi al-khadamat sukuk in 2026. This will bridge the gap between Malaysian and GCC syariah interpretations, potentially opening new inflows of Middle Eastern investments into the Southeast Asian nations.

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It was followed immediately by the UAE Ministry of Finance, which got its inaugural “Sovereign Retail T-Sukuk Programme” successfully launched and listed at the exchange.

The Arab Energy Fund, which shares longstanding engagement with Nasdaq Dubai by contributing heavily to the latter’s Sukuk market, got its Sharia-compliant financial certificate issued under TAEF’s Trust Certificate Issuance Programme through APICORP Sukuk Limited. The Sukuk comprises USD 500 million in trust certificates due in 2031.

The senior unsecured issuance carries a profit rate of 4.686% and was priced at a spread of 70 basis points over SOFR.

Arab Energy Fund’s issuance attracted orders exceeding USD 900 million and was 2x oversubscribed, enabling pricing to tighten from initial guidance. The transaction saw strong and well-diversified demand across geographies and investor types, with high-profile institutions such as central banks, sovereigns, supranational institutions, and agencies (SSAs) taking part in the process, underscoring the strength of TAEF’s credit profile and market positioning.

Stating that “Trust Certificates” are rated Aa2 by Moody’s and AA+ by Fitch, reflecting Arab Energy Fund’s strong credit profile, Vicky Bhatia, the entity’s chief financial officer (CFO), said, “This transaction shows both the strength of our credit profile and our ability to work through difficult market conditions.” Achieving pricing at SOFR+70bps with no new issue premium, despite the challenging market, demonstrates the confidence investors have in the Arab Energy Fund and its mission.”

Hamed Ali, CEO of Nasdaq Dubai and DFM, said, “The Arab Energy Fund’s latest Sukuk listing adds to the depth of Nasdaq Dubai’s Sukuk market and reflects continued activity from supranational issuers in regional debt capital markets. As the Fund’s fourth listing on the exchange, the transaction highlights the role of established issuers in supporting market development and broadening investment opportunities for regional and international investors.”

The latest issuance follows the Arab Energy Fund’s USD 500 million 10-year Sukuk listing earlier this year and forms part of its diversified funding strategy to support sustainable energy development across the Gulf region.

Shifting the focus to the UAE Ministry of Finance’s listing of its inaugural sovereign retail T-Sukuk programme, the event marked the culmination of the Gulf country’s comprehensive strategic effort to broaden its Islamic financial ecosystem, apart from providing innovative sovereign investment instruments that foster a culture of saving and long-term investment across the nation.

“The UAE continues to advance a resilient and inclusive economic model built on a sophisticated financial and legislative infrastructure that aligns with the highest international standards. The listing of the country’s inaugural Sovereign Retail T-Sukuk Program reflects the ministry’s strategic vision to strengthen the efficiency of domestic capital markets and diversify sovereign funding sources, ensuring sustainable financial resources while providing highly secure investment solutions that reinforce the UAE’s long-term financial stability,” said Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs.

The inaugural retail T-Sukuk offering recorded exceptional investor demand, as it exceeded official expectations, with subscription requests reaching AED445 million, achieving an oversubscription of nearly nine times the target issuance size of AED50 million. Responding to the strong investor demand, the ministry has increased the issuance size to AED100 million.

The programme also attracted a broad and diverse base of retail investors, as the latter subscribed up to AED10,000, thereby accounting for 76% of the total subscriber base. At 72%, UAE nationals accounted for the largest share of subscribers.

By generating strong participation from young investors under the age of 25 and women, who together accounted for 45% of the total subscriber base, the “Retail T-Sukuk Program” has become successful in terms of advancing financial inclusion.

“The exceptional investor demand for the inaugural offering, which exceeded expectations and achieved record levels of oversubscription, reflects the growing financial and investment awareness among members of society. It also demonstrates the programme’s success in broadening participation in government investment instruments and advancing financial inclusion by providing secure and trusted investment opportunities for all segments of society,” Al Hussaini added.

“This issuance represents an important strategic instrument for deepening the integration between fiscal policy and the country’s key economic sectors by mobilising national capital and directing it towards initiatives that support comprehensive and sustainable development. The Ministry of Finance remains committed to fostering an enabling environment for financial innovation through close collaboration with the Central Bank of the UAE and the country’s financial markets, further strengthening the UAE’s global competitiveness as a leading and sustainable financial centre offering trusted saving and investment opportunities that meet the aspirations of all segments of society,” he concluded.

The inaugural listed issuance carries significant strategic value, with an initially announced issuance size of AED50 million, which was upsized to AED100 million to capitalise on strong investor demand and broad market participation, and a minimum investment threshold of AED1,000, making sovereign investment opportunities more accessible and enabling broader participation by individual investors.

The “Sovereign Retail T-Sukuk Program” has a two-year tenor, offering a profit rate of 4.30% per annum, with returns distributed every six months. The sukuk, now available for trading on the secondary market through authorised exchange brokers, is also supported by dedicated market makers and liquidity providers to ensure efficient price discovery, enhance market liquidity and facilitate seamless trading.

The filings have further strengthened Nasdaq Dubai’s role as one of the world’s leading international venues for Sukuk and fixed-income listings. The exchange currently hosts over USD 98.6 billion in outstanding Sukuk listings and over USD 141 billion in outstanding debt securities, supporting issuers from across the region and international markets while reinforcing Dubai’s position as a global centre for Islamic finance.

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The Forum brought together distinguished policymakers, regulators, development practitioners, and industry leaders with the goal of exploring how Islamic finance can foster sustainable prosperity and address development challenges across the IsDB’s member countries.

“Aligned with the broader annual meeting’s theme, Regional Integration for Sustainable Prosperity, the Forum examined how countries and institutions can leverage Islamic finance to deepen regional integration, enhance economic resilience, and promote inclusive growth across IsDB member countries,” IsDB said in a statement.

In his keynote speech, Mr Taleh Kazimov, Governor of the Central Bank of the Republic of Azerbaijan, reaffirmed the transcontinental country’s commitment to contributing to the future development of the Islamic finance ecosystem, highlighting the nation’s role as a reformer and a bridge between regions and markets. He emphasised the importance of a clear strategic vision in shaping future growth and cooperation.

Eng. Adeeb Yousuf Al Aama, Chief Executive Officer of ITFC, in a keynote speech on behalf of the IsDB Group, said, “Islamic finance should not be viewed merely as an alternative set of financial contracts or a niche segment of the global financial industry, but rather as a values-driven development paradigm that reconnects finance with the real economy, productive activity, shared prosperity, and social well-being.”

In his opening remarks, Dr Sami Al-Suwailem, Acting Director General of the IsDB Institute, highlighted the IsDB Group’s significant contribution to the development of the global Islamic finance industry, now valued at approximately USD 4-5 trillion. He also underscored the importance of innovation in maintaining the leadership of the IsDB Group and ensuring the industry remains relevant while consistently contributing to sustainable development.

The event also saw the launch of a new report titled “Islamic Finance in Azerbaijan: Breaking New Ground”, jointly produced by IsDBI and ITFC, along with other flagship publications. Apart from that, IsDBI (Islamic Development Bank Institute) also announced a memorandum of understanding (MoU) with the Labuan Financial Services Authority to explore the “Awqaf Free Zones” flagship project. Among the two high-level panel discussions focusing on Islamic finance and development, the first one explored how Islamic finance can help countries overcome structural development challenges and achieve sustainable economic transformation.

Speakers included Mr Shahin Aydin Mahmudzade, Executive Director, Central Bank of Azerbaijan; Mr Adnan Zaylani, Deputy Governor, Bank Negara Malaysia; Ms Mihoko Kumamoto, Director, Division for Prosperity, UNITAR; Dr Bambang Brodjonegoro, Dean, Asian Development Bank Institute; and Dr Areef Suleman, Chief Economist, ISDB Group. The session was moderated by Mr Mustafa Adil, Head of Islamic Finance, London Stock Exchange Group.

“The second session examined practical approaches to mobilising sustainable finance in support of food and energy security, drawing on insights from member countries and partner institutions. Speakers included Mr Valeh Alasgarov, Chairman of the Board, AFEZ Authority, Azerbaijan; Dr Mansur Muhtar, Chairman of the Board, Bank of Industry, Nigeria; Professor Emeritus Dato’ Dr Azmi Omar, President & CEO, INCEIF University; and Mr Orkhan Vidadi oglu Mammadov, Chairman, Small and Medium Business Development Agency of Azerbaijan (KOBIA). The session was moderated by Mr Yahya Rehman, Associate Manager, IsDBI,” IsDB stated further.

Before concluding, the Forum identified key priority areas for future collaboration, including scaling innovative Islamic finance instruments, strengthening institutional partnerships, and enhancing capacity development initiatives. It also reinforced the role of the IsDB Institute as a key partner in advancing practical, innovative solutions that support sustainable development and regional integration within the framework of Islamic finance.

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Uganda is raising funds for the 2.7-billion-euro project, which has already won ⁠backing from lenders including the World Bank and the African Development Bank (ADB). Citibank has been appointed to help ‌mobilise financing.

Construction ⁠of the ⁠railway, which began in 2024, is being carried out by Turkish ‌firm Yapi Merkezi.

Apart from financing the crucial infrastructure project, ⁠IsDB has already consolidated its position as one of the African country’s biggest sources of external financing and, as of the end of May 2026, had projects in the East African country worth USD 896.5 million, government data showed.

The 272-km (169-mile) line will ‌reportedly link landlocked Uganda to Kenya’s rail network, ⁠providing crucial access to the Indian Ocean port of Mombasa, through which the African nation imports most of its goods.

Apart from the key funding support from Uganda, it is preparing to issue its first sovereign sukuk, which will partly address the African country’s financing requirements for the construction of a standard-gauge railway (SGR) linking capital Kampala with the Kenyan border town of Malaba.

Talking about Kampala’s upcoming maiden sukuk issuance, it will finance 15% of the estimated 2.7-billion-euro (USD 3.16 billion) cost of the SGR. Export credit agencies, on the other hand, are expected to provide 60% of the project financing, while development finance institutions (IsDB, World Bank, and ADB) would contribute the remaining 25%.

A month back, Deputy Treasury Secretary Patrick Ocailap launched a regional investor roadshow across East African Community (EAC) member states, including Kenya and Tanzania, to build the anticipation ahead of the sukuk issuance. However, not many details have emerged about the size or launch date of the sukuk.

Ocailap said, “The roadshow was intended to test the market, determine pricing and build investor relationships to ensure the success of the operation.” A delegation including representatives from Yusra Sukuk, the lead arranger for the transaction, as well as representatives from Stanbic Bank Uganda and the Bank of Uganda, was reportedly present during the investor roadshow.

While the railway construction contract was awarded to China Harbour Engineering Company in 2015, under an arrangement requiring the contractor to secure financing from the Chinese government, repeated funding delays since the last decade forced the Ugandan government to cancel the contract in January 2023. Authorities later signed a new agreement in October 2024 with Yapi Merkezi to build the connectivity between Kampala and Malaba.

Kenyan President William Ruto in March 2026 inaugurated construction works on a new phase of Kenya’s SGR linking Naivasha to Kisumu, with a later extension planned towards the Ugandan border. The standard gauge railway network has been the lifeline when it comes to travelling between Mombasa and Nairobi and onwards to Naivasha since 2019.

Over the longer term, Kenya and Uganda aim to extend the rail corridor towards Rwanda, South Sudan and the Democratic Republic of the Congo as part of efforts to strengthen regional trade and logistics integration across East and Central Africa.

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KFH Capital achieved landmark transactions across Kuwait, Qatar, and the UAE, including the world’s first Tier‑2 Sustainability Sukuk. The business transformed from a paper‑based company to the one initiating fully automated, traceable workflows in the Islamic Financial landscape, by combining technical structuring expertise with a firm commitment to ESG (Environmental, Social, and Governance) principles and digital modernisation.

These efforts saw the venture getting recognised with the honours of being the “Best Green Sukuk Structuring – Kuwait 2025” and “Best Digital Transformation in Financial Services – Kuwait 2025,” at the recently concluded International Finance Awards, reflecting the company’s ability to lead on two critical fronts: sustainability and innovation.

KFH Capital is among the largest participants in the global Sukuk issuance market, consistently attracting robust international demand and achieving oversubscriptions that signal deep investor confidence. In 2021, the company coordinated the Kuveyt Turk Katılım Bankası USD 350 million Tier‑II Sustainability Sukuk—the first of its kind globally and the first sustainability Sukuk from an Islamic financial institution. The issuance was oversubscribed nearly 12x, setting a new precedent for ESG‑aligned Islamic Finance.

Landmark Sustainable Transactions
Between 2024 and 2025, KFH Capital played active roles across six sustainable transactions in Kuwait, Qatar, and the UAE, totalling USD 3.8 billion. With Qatar International Islamic Bank, the company got the first sustainable Sukuk listed on the London Stock Exchange. The collaboration with the Dubai Islamic Bank resulted in the creation of KFH Capital’s pioneering sustainability‑linked Sukuk.

Warba Bank launched its first sustainable Sukuk from Kuwait. Additionally, partnering with Aldar Investment Properties led KFH Capital to issue an “Oversubscribed Green Sukuk,” reinforcing net-zero commitments.

In each case, KFH Capital served as joint lead manager and bookrunner, showcasing capabilities in structuring, marketing, and delivering complex, first‑of‑a‑kind deals. The company’s repeat activity underscores reliability and strategic importance in connecting MENA capital with global sustainability demand.

Strategy And Principles
In tandem with its sustainable finance achievements, KFH Capital executed a sweeping digital transformation, migrating from fragmented, paper‑based systems to fully automated, end‑to‑end processes. The impact was immediate, as the client onboarding times got compressed from days to minutes. Operational error rates, on the other hand, fell to near zero, while scalability improved without additional manpower.

KFH Capital’s digital transformation strategy rested upon four principles: customer‑designed journeys, automation of repeatable tasks, full traceability at every stage and system integrability across the estate.

Rejecting one‑size‑fits‑all ERP models, KFH Capital built a tailored digital ecosystem aligned to the company’s culture and client needs. Embedded teams mapped workflows, challenged legacy policies, and prototyped solutions with exacting user‑experience standards. Key initiatives included digitised onboarding, workflow‑based controls to eliminate errors, and transparent performance monitoring.

The outcomes were not limited to efficiency gains—they strengthened governance, compliance, and auditability, ensuring that controls scale alongside growth. Looking ahead, KFH Capital’s roadmap focuses on expanding automation, self‑service capabilities, and data‑driven decision‑making, positioning the business as a reference model for modern services in the region.

By structuring landmark Sukuk issuances that advance ESG objectives and by executing a disciplined digital transformation programme, KFH Capital has demonstrated measurable impact and long-term scalability.

As global markets evolve, KFH Capital continues to set benchmarks in Islamic finance, combining technical expertise with strategic vision. Its achievements illustrate how disciplined execution and innovation can deliver value to clients, investors, and stakeholders, while positioning Kuwait as a hub for sustainable and modern financial services.

Image Courtesy: KFH Capital

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