IslamicFinance.de

Banks in the six-nation Gulf Cooperation Council can thank turbulence in the world’s bond markets for spurring Islamic lending to the highest in three years. Loans that comply with Islam’s ban on interest in the GCC have risen 22% this year to $11.9bn, the most since 2012. At the same time sales of Islamic bonds dropped 41% to $6.9bn. The increase in lending will be welcome for banks in the region, where oil’s more than 50% decline in the past 12 months threatens to curtail government spending and clip economic growth. Investors are demanding higher yields amid market swings, prompting companies including Dubai-based construction contractor Drake & Scull International to delay sales.