Digital innovation, ESG alignment, and booming corporate Sukuk are propelling the industry into a new era of growth, according to a new Standard Chartered analysis.
A new report from Standard Chartered, “Islamic Banking for Corporates: Broadening Horizons,” confirms that Islamic banking has solidified its position as a major force in the global financial landscape. The sector, now active in more than 80 countries, has seen its assets surge beyond $5 trillion and is on a trajectory to reach an estimated $7.5 trillion by 2028.
This remarkable growth is being fueled by several key trends, offering significant opportunities for forward-thinking corporations.
Corporate Sukuk Issuances Soar
One of the most powerful drivers is the explosive growth in corporate Sukuk. Since 2020, these Sharia-compliant bond issuances have nearly doubled, culminating in a record $58.8 billion in 2024—a 38% increase in volume. This signals a robust and growing appetite for Islamic capital market instruments.
The Critical Hurdle: Bridging the Awareness Gap
Despite this momentum, the report identifies a major obstacle: a widespread lack of familiarity with Islamic banking products. This knowledge gap is currently preventing many businesses from tapping into the vast $5.5 trillion pool of global Islamic finance assets.
As Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered, explains, the rewards for overcoming this are substantial: “Corporates that develop expertise in Islamic finance can unlock access to specialized capital, preferential pricing, government incentives in high-growth markets, and increasingly popular ESG-focused investment pools.”
Synergy with ESG and Digital Transformation
The report highlights a natural synergy between Islamic finance principles and Environmental, Social, and Governance (ESG) goals. Evidence of this is clear in investor behavior; in 2024, sustainable Sukuk were oversubscribed by an average of 4.3 times, significantly outpacing the 3.1 times oversubscription rate for traditional Sukuk.
Furthermore, digital innovation is revolutionizing the sector. Cutting-edge developments like tokenized Sukuk, blockchain-based settlements, and AI-driven Sharia-compliance tools are enhancing efficiency, reducing operational costs, and strengthening governance for cross-border transactions.
A Gateway to Key Global Trade Corridors
Embracing Islamic finance is also becoming a strategic necessity for accessing critical emerging trade corridors. In regions like the GCC, Southeast Asia, South Asia, and Africa, Sharia-compliant financing is often a prerequisite. The $5.7 trillion South-South Corridor, which connects these dynamic regions, now represents nearly a quarter of all global trade, making Islamic banking a key to unlocking immense economic potential.