Islamic banking has increasingly cemented its position as a mainstream segment of the global financial industry, now operating in over 80 countries with assets surpassing $5 trillion. A recent report by Standard Chartered, titled Islamic Banking for Corporates: Broadening Horizons, forecasts that total global assets in the sector are projected to reach $7.5 trillion by 2028, reflecting a robust growth trajectory supported by corporate adoption, digital innovation, and strategic participation in global trade corridors.
The report highlights that corporate Sukuk issuances have experienced significant expansion, nearly doubling in value since 2020. In 2024 alone, issuance volumes rose by 38%, reaching $58.8 billion. This surge underscores the increasing acceptance of Sharia-compliant instruments among corporates seeking alternative financing mechanisms that align with ethical and religious principles.
Despite these gains, the report notes that a lack of awareness remains a barrier for corporates aiming to access the broader $5.5 trillion in global Islamic finance assets. Corporates that develop expertise in Islamic finance can benefit from specialized capital pools, preferential pricing, and government incentives in high-growth markets, as well as ESG-focused funding opportunities. Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered, emphasized, “Corporates that build Islamic finance capabilities stand to access specialised capital pools, preferential pricing, government incentives in high-growth markets, and ESG-focused capital pools.”
The intersection of Islamic finance with Environmental, Social, and Governance (ESG) principles is another factor driving investor interest. Sustainable Sukuk were oversubscribed by an average of 4.3 times their issuance value in 2024, compared to 3.1 times for traditional Sukuk, demonstrating strong demand for instruments that integrate Shariah compliance with sustainability objectives.
Digital innovation is also transforming Islamic finance, enhancing operational efficiency, transparency, and compliance. Technologies such as tokenized Sukuk, blockchain-based settlement systems, and AI-powered Sharia-compliance tools are reducing costs, improving cross-border governance, and enabling faster, more secure transactions. These innovations are increasingly critical for financial institutions seeking to scale operations in emerging markets while maintaining strict compliance standards.
The report further emphasizes the role of Islamic banking in facilitating access to vital trade corridors, particularly in the GCC, Southeast Asia, South Asia, and Africa. The South-South Corridor, valued at $5.7 trillion, now accounts for nearly a quarter of global trade, highlighting the strategic importance of Sharia-compliant finance in enabling international business and capital flows.
As Islamic banking continues to expand, its growth is driven by the combined forces of corporate adoption, ESG-aligned instruments, and technology-driven solutions, positioning it as a core component of the global financial system. With the sector expected to surpass $7.5 trillion by 2028, financial institutions and corporates alike are increasingly prioritizing expertise in Sharia-compliant finance to unlock new opportunities for investment, sustainability, and cross-border trade.
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