Islamic banks are set to boost their market share in the energy-rich Gulf states to nearly 30 percent in the next five years, ratings agency Standard & Poor's said on Monday.
"We think Islamic banks' market share of overall banking system assets in the Gulf Cooperation Council (GCC) countries could gradually inch closer to 30 percent over the next five to six years, from just under 25 percent currently," Standard & Poor's credit analyst Timucin Engin said.
S&P said it expected total GCC banking assets, both conventional and Islamic, to rise to $2 trillion by the end of 2015, from $1.7 trillion at year-end 2013.
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But solid market positions by conventional banks in the region will prevent the fast-growing Islamic banks from attaining a bigger share, Engin said.
The GCC region groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
It has one of the world's largest Islamic banking markets and S&P said government support should help the sector to keep expanding its market share.
The agency said it expected Islamic banks would continue to grow faster than their conventional peers in the next couple of years, particularly in Qatar and Saudi Arabia, where domestic credit is projected to grow the most.