Cairo (VNA) - Fitch Ratings has said it expects the Islamic finance industry in the Association of Southeast Asian Nations (ASEAN) to reach 1 trillion USD by end-2026, after growing to nearly 950 billion USD by the first half of 2025, or about 25% of the global total.
Growth will continue to be led by Malaysia, Indonesia and Brunei due to their large Muslim populations, enabling regulations, access to sukuk, and potentially improving ties with Gulf Cooperation Council (GCC) countries.
However, Islamic finance demand in ASEAN is fragmented, with limited presence in Singapore, Philippines and Thailand, and remaining undeveloped in Vietnam, Laos, Cambodia and Myanmar due to small Muslim populations and lack of regulatory frameworks. More interconnected ASEAN financial systems could support penetration.
Malaysia is ASEAN’s largest Islamic banking market, with about 300 billion USD in assets, and Islamic financing representing 42% of total system financing at end-H1/2025. Indonesia’s Islamic banking assets reached 56 billion USD in 4M25 (7% of bank total).
Brunei’s Islamic banks held nearly 10 billion USD in assets or 63% of total banking at end-2024, while the Philippines’ only Islamic bank had assets of about 20 million USD.
Thailand’s sole Islamic bank had 2.8 billion USD of assets at end-Q1/2025. Islamic digital banks are emerging, including Malaysia’s AEON Bank.
Fitch rates four Indonesian Islamic banks, two Malaysian takaful companies and Islamic Bank of Thailand./.
