The United Arab Emirates (UAE) is emerging as a global powerhouse in Islamic finance, with its sector poised for significant expansion. As of the first half of 2025, Islamic banking assets in the UAE reached $242.7 billion, accounting for 18% of the nation’s total banking assets. This growth is part of a broader global trend, with Islamic finance now valued at over $5.5 trillion worldwide. The UAE ranks as the fourth-largest Islamic finance jurisdiction globally, driven by a robust national strategy aiming to more than double Islamic banking assets and sukuk listings by 2031. The strategy includes increasing Islamic banking assets to Dh2.56 trillion ($697.5 billion) and boosting sukuk issuances to Dh660 billion ($179.8 billion).
Standard Chartered’s report, ‘Islamic Banking for Corporates: Broadening Horizons,’ highlights the UAE’s consistent outperformance of conventional banking growth. The report emphasizes the sector’s alignment with environmental, social, and governance (ESG) principles, making it increasingly attractive to global investors. Sustainable sukuk, for instance, saw subscription rates of 4.3 times their issuance value in 2024, compared to 3.1 times for traditional sukuk. This demand is driven by non-traditional investors, particularly from Europe.
Digital innovation is also reshaping the Islamic finance landscape. Tokenized sukuk and blockchain-enabled platforms are streamlining cross-border transactions and reducing costs. Malaysia is leading in integrating digital assets into Islamic finance, while the UAE is exploring similar advancements to enhance its financial infrastructure.
Corporate sectors such as real estate, logistics, and food production are leveraging Shariah-compliant financing to access new markets and diversify funding sources. In July 2025, UAE-based developer Arada raised $450 million through its largest sukuk issuance to date, oversubscribed 4.4 times. This underscores the growing investor demand for Shariah-compliant assets, which continues to outpace supply.
The UAE’s proactive approach and strategic investments are positioning it as a global hub for ethical and sustainable finance. For corporates navigating a values-driven world, Islamic banking is no longer just an alternative—it’s a competitive advantage.