Qatar's Islamic banking sector continues to demonstrate steady growth, consolidating its position within the national financial system, driven by overall banking sector strength, evolving regulatory frameworks, expanding digital services, and rising demand for sukuk and sustainable finance.
The latest Qatar Central Bank (QCB) data from its 2025 Financial Stability Report issued in August highlights the resilience and stability of the Qatari banking sector. Total bank assets grew by 5.1%, propelled by credit growth in both the public and private sectors. Asset quality continued to improve amid declining non-performing loans (NPLs) and strengthened risk coverage provisions, while capital reserves and liquidity remained well above regulatory minimums.
According to the report, the banking sector's capital adequacy ratio reached 19.9% in 2025, up from 19.6% in 2024, with the Tier 1 capital ratio rising to 15.7% from 15.2%. The NPL ratio dropped to 3.4% from 3.6%, while the NPL provision coverage ratio climbed to 84.6% from 77.4%. Liquid assets accounted for 25.2% of total assets and 58.8% of short-term liabilities.
Meanwhile, the 9th Annual Report on Islamic Finance by Bait Al-Mashura Finance Consultations details the expansion of the broader Islamic finance ecosystem. Total sector assets reached QR718.5bn in 2025, up from QR682.3bn in 2024. Islamic banks held the largest share at 85.8%, QR616.5bn, reflecting a 5.3% annual growth rate that exceeded conventional commercial banks, which stood at 5%, representing nearly 28% of total Qatari banking assets.
Sukuk ranked second with roughly 11% of total Islamic financial assets, followed by takaful (Islamic insurance) at 0.7%, with the remainder spread across Islamic finance, investment companies, and investment funds.
Domestic assets of Islamic banks reached QR554.3bn, registering a 4.6% growth, while deposits rose 7.5% to QR364.4bn, accounting for nearly 35% of total banking sector deposits. Total financing provided by Islamic banks grew 4.2% to QR418.3bn, representing about 29% of total banking sector financing.
The substantial footprint of Qatar's four Islamic banks, QIB, AlRayan Bank, Dukhan Bank, and QIIB, is underscored by their strong market shares across major economic sectors. Islamic banks accounted for 63% of total consumer financing, 44% of real estate financing, 42% of construction financing, and 34% of industrial financing, with 96% of their total financing directed toward the domestic market.
Economists and industry experts interviewed by Qatar News Agency highlight that Islamic banking in Qatar is experiencing multifaceted growth, driven by digitalisation, financial innovation, and sustainable financing.
CEO of QIIB D. Abdulbasit Ahmed al-Shaibei told QNA that the sector's outperformance stems from Qatar's solid operating environment, long-term strategic plans, and the sector's ability to innovate Shariah-compliant products tailored to retail and corporate needs while upholding risk management and governance standards.
He highlighted that early investment in digital infrastructure enhanced operational efficiency, reduced costs, and improved customer experience, bolstering confidence in Islamic financial institutions. He added that QIIB relies on a solid capital base and solvency to scale digital offerings, establish strategic partnerships, and export Islamic banking expertise to international markets.
On the sukuk market, al-Shaibei noted strong growth prospects tied to national development projects under Qatar National Vision 2030. He highlighted sukuk's mechanism for linking investment liquidity to real economic projects and QIIB's presence in international capital markets, ranging from its inaugural $700mn issuance in 2012 to its recent QR500mn listing on the Qatar Stock Exchange. He also emphasized the importance of green and sustainable instruments, pointing that QIIB's $500mn "Oryx" sustainable sukuk listed on the London Stock Exchange witnessed demand exceeding eight times the issuance value.
Vice-Chairman of Bait Al-Mashura Finance Consultations, Dr Khalid bin Ibrahim al-Sulaiti, told QNA that digitalisation has become a primary driver of growth in Islamic finance, providing models and products capable of meeting customer needs and enhancing financial inclusion. He noted that the global Islamic fintech market has exceeded $198bn and is projected to reach $341bn by 2029 at a compound annual growth rate of 11.5%, with the artificial intelligence boom serving as a catalyst.
He pointed out that sustainable sukuk issuances in Qatar have exceeded QR20bn, highlighting AlRayan Bank's QR500mn green sukuk listing on the QSE in Q1 as a major milestone. He urged continued regulatory updates aligned with global ESG standards, incentives for green issuers, expanded project eligibility, and deeper liquidity in secondary sukuk markets.
Addressing major challenges, al-Sulaiti identified global economic uncertainty, geopolitical conflicts, supply chain friction, shifting borrowing costs, intense competition from conventional banks, and the difficulty of aligning rapid digital adoption with Sharia regulatory compliance.
Nevertheless, he projected continued momentum for Qatari Islamic banking over the next five years, driven by an expanding asset base, increased private sector financing, and growing investment in renewable energy and green projects supporting Qatar's transition toward a sustainable, knowledge-based economy.
Qatar's Islamic finance ecosystem also encompasses non-banking institutions, including takaful, sukuk, finance and investment companies and investment funds. The QCB report showed licensed Shariah-compliant finance companies grew their total assets by 3.6% to QR2.62bn by the end of 2025, with Islamic financing accounting for 78.8% of their total assets compared to 74.2% in 2024.
