WIBC McKinsey Competitiveness Report 2008/09 to be launched at WIBC 2008

Produced by McKinsey & Company, the Competitiveness Report highlights recent developments in Islamic finance, including growth and performance, provides analysis of key business segments such as Islamic Retail Banking, Sukuk (bonds), Takaful (Insurance) and Islamic Wealth Management, and offers a perspective on the challenges and opportunities facing the industry in the context of the current economic climate.

Some of the Islamic banking sector's key structural advantages, such as less reliance on leverage, have ensured that the sector in 2008 has not been affected as adversely as its conventional banking counterpart in the financial crisis.

Nevertheless, there are some potential challenges facing Islamic banks in the short-term, including the lack of liquidity in global markets and some significant exposure in the industry to real estate and construction assets.

The report recommends that Islamic banks act to ensure sound liquidity and risk management; re-assess their growth strategies keeping in mind the diversification of revenues and the need for increasing focus on operational excellence and profitability; and re-think the core positioning of the industry and its contribution to the global financial ecosystem, translating this into further product innovation and differentiation.

The report has five chapters: 1) Recent Developments in the Islamic Financial Landscape, providing an overview, and then four chapters devoted to key business segments; 2) Islamic Retail Banking; 3) Sukuk; 4) Takaful and 5) Islamic Wealth Management.