IslamicFinance.de

Retail-focused Islamic banks in GCC countries have strong liquidity coverage ratios (LCRs) due to their large base of core retail customer deposits and low reliance on market-sensitive wholesale funding. According to Moody’s, retail deposits in 2015 comprised around 67% of Islamic banks’ customer deposits for the three GCC countries, compared to 40 for conventional banks. Islamic banks in GCC countries have become systemically important and continue to increase their market penetration, outpacing conventional banks. Sustained lower oil prices continue to reduce the flow of deposits and could lead to a gradual weakening of the LCR metrics for both Islamic and conventional banks.