(Sukuk.net - Khaleej Times) The total value of Bahraini banks' Islamic banking assets increased by 50 per cent in 2008 to $24.6 billion, according to figures issued by the Central Bank of Bahrain, or CBB.

In 2007, the combined assets were at $16.4 billion.

This increase, at a time when traditional banking institutions worldwide saw widespread depreciation in their assets, is a testament to the ongoing success and resilience of the Islamic banking system, according to a Press Statement. By its very nature it precludes some of the riskier practices that have led conventional banks into their current situation. The sound basis provided by Sharia principles, and the asset-based business model have jointly provided a firm platform for the strong performance in the sector, the statement added.

Since 2000, the Islamic banking sector in Bahrain has seen assets increase by 1280 per cent from $1.7 billion, and the number of Islamic finance institutions continues to grow.

The CBB has approved more than 33 licences for Islamic finance institutions since 2005. Bahrain is widely recognised as a global leader in Islamic finance, playing host to the largest concentration of Islamic financial institutions in the world. Presently, there are 36 specialist Islamic banks operating in the kingdom. "While the underlying principles of Islamic finance have safeguarded it against the worst of the economic downturn, it is Bahrain's world-class regulatory standards that have helped attract institutions to the country and led to the rapid growth of Islamic finance assets," Khalid Hamad, Executive Director-Banking Supervision, CBB, said.

Rasheed Al Maraj, Governor, CBB, said: "In recent months as the global financial crisis has deepened, many commentators have pointed out that Islamic financial institutions have escaped relatively unscathed from the severe downturn which is affecting most conventional financial institutions. The continuing implementation of sound business principles should allow the industry to continue its rapid growth of recent decades, and Bahrain is well-positioned to remain at the forefront through the application of prudent regulatory standards. "

"The remarkable increase in Islamic finance is fresh evidence that Bahrain's economic strategy is paying off, in terms of creating business, revenue and employment. Fund managers are setting up in Bahrain because they know they will benefit from the region's most educated workforce, an ample supply of support services and infrastructure, and systems of regulation and taxation designed to make it safer and more profitable to do business," Shaikh Mohammed bin Essa Al Khalifa, Chief Executive of the Economic Development Board, said.
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