Gulf-based Islamic banks grapple with weakening regional economies

After delivering strong results in 2014, Islamic banks in the Gulf region face a gradually weakening operating outlook in 2015-2016, largely due to declining oil revenues, says a report published today by Standard & Poor's Ratings Services. But as the report, titled "Gulf-Based Islamic Banks Grapple With Weakening Regional Economies," also points out, we believe investor demand for Sharia-compliant products and supportive government actions will enable Islamic banks in the region to continue to grow. In S&P's opinion, the two most important factors influencing the Islamic banks' faster growth are an increasing demand for both retail and corporate Sharia-compliant banking products and government initiatives designed to support Islamic finance.