Participation banking

Participation banking is a name given to Islamic banks mainly in Turkey, as well as in the broader MENA region.^[1][2] There are participation banks in Turkey, Pakistan , Bangladesh, Indonesia, Saudi Arabia, Malaysia, the UAE and other Gulf countries.

History

In 2000 participation banks reached^{[clarification needed]} only 2% of net assets,^{[citation needed]} by 2010 this rate increased up to 4.3%.^{[citation needed]} In the third quarter of 2013, the rate increased up to 6.1% with 90.7 billion TL in assets.^{[citation needed]} Regarding the profit margins of the participation banks, Malaysia, Indonesia and Gulf countries have more than 50% of the market share, it is stated^{[citation needed]} that Turkey has more potential in growth. Also, Turkey, Pakistan , Bangladesh, and Indonesia stand as the leading countries^{[clarification needed]} among the participation banks.^[3] Saudi Arabia, the UAE and Malaysia are the three largest participation banking markets, in terms of assets.^[4] 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^{[clarification needed]} market share.^{[citation needed]}

According to Ernst & Young, the assets of global participation banking reached United States dollar $930 billion in 2015, with growth rates declining across all regions compared to previous years.^[4]

List of participation banks

• Ziraat Participation Bank
• Vakıf Participation Bank
• Turkey Finance Participation Bank [tr]
• Albaraka Türk Participation Bank
• Kuwait Turk Participation Bank [tr]

Defunct

• Asia Participation Bank (founded 1996, closed 2016)

References

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