Islamic banking and finance has clearly found its home in the Gulf. The region leads the industry by housing two thirds of global assets, worth roughly $350 billion. Also, the world’s leading Islamic financial institutions are all headquartered in the Gulf states and they routinely export their business model to Asia, Europe and Africa. Ninety percent of incremental retail-banking production in Saudi Arabia is Islamic, but Bahrain acts as the regional hub for Islamic finance. This is largely because the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is based in Manama. However, despite Bahrain’s role as a hub for Islamic finance, with 28 Islamic banks based in the island state, the market share for Islamic banks in the country is only 7%, according to a recent report by Moody’s. The other surprise in the study is that Oman is a Gulf state with no Islamic banks. A closer
