World’s Safest Banks 2024: Islamic Banks In GCC

The GCC’s Shariah-compliant institutions are growing their assets and expanding their reach, thanks to new strategic partnerships and greater tech investment.

Islamic banks based in the Gulf Cooperation Council (GCC) countries continue to expand their reach, taking on Shariah-compliant transactions in new industries and establishing new strategic partnerships.

That aggressive approach has already paid off in years of double-digit growth, and the outlook remains favorable. Moody’s forecasts strong profitability over the next 12-18 months based on solid economic growth in GCC countries, robust commercial activity, and government initiatives that give Islamic finance a bigger role in diversifying the region’s economies.

Part of this growth will come from financing new asset classes. As Islamic banks are required to back every transaction with a tangible asset, real estate has been a large component; but the sector is broadening its reach to include telecommunications and airline assets and sustainability projects. Fueling this expansion is strong issuance of Shariah-compliant sukuk bonds. According to Moody’s, year-over-year issuance of sukuk in the GCC states rose 138% to $69 billion as of June, with Saudi Arabia accounting for 37% of total issuance.

The Gulf’s Islamic banks look to build on this momentum through strategic partnerships. With the recent launch of ADIB Ventures, Abu Dhabi Islamic Bank (ADIB), which tops our rankings, aims to accelerate its digital transformation, collaborating with technology firms to build its own fintech ecosystem. The bank expects this will help it leverage artificial intelligence and other advanced technologies to identify and launch new Islamic banking solutions. In June, ADIB formed a strategic collaboration with DIFC Innovation Hub, the largest financial technology accelerator in the Middle East, which works with clients in Africa and South Asia as well.

This year’s ranking of the safest Islamic banks once again reveals some notable changes.

In March, Fitch upgraded Qatar’s sovereign debt rating, then subsequently boosted the ratings of three Qatari-based banks. Partly on the strength of these upgrades, Qatar Islamic Bank moved up to No. 2 in our rankings from No. 5, Dukhan Bank advanced two spots to No. 6, and Qatar International Islamic Bank moved up two places to No. 7.

Ahli United Bank leaves our ranking due to its acquisition by Kuwait Finance House, creating the second-largest Islamic bank, behind Saudi Arabia’s Al Rajhi. This allowed Warba bank to enter the ranking at No. 10.

safest Islamic Banks in the GCC
NameDomicileFitch RatingMoody’s RatingS&P RatingTotal Assets (USD million)Report Date
Abu Dhabi Islamic BankUAEA+A2NR52,50212/31/23
Qatar Islamic BankQatarAA1NR51,95212/31/23
Boubyan BankKuwaitAA2A27,35612/31/23
Al Rajhi BankSaudi ArabiaA-A1A-215,49312/31/23
Kuwait Finance HouseKuwaitAA2NR123,71012/31/23
Dukhan BankQatarAA2NR31,42512/31/23
Qatar International Islamic BankQatarAA2NR16,93012/31/23
Dubai Islamic BankUAEAA3NR85,58012/31/23
Bank AlJaziraSaudi ArabiaA-Baa1NR34,54712/31/23
Warba BankKuwaitABaa2NR15,73812/31/23
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