The IFI winners of the World's Best Global Finance are more successful than the sector in 2025, with an emphasis on innovation and the adoption of AI. But the new conflicts in the Mideast bring new challenges.
Islamic financial institutions (IFIs) improved their performance modestly in 2025, recording a 2% Return on Average Assets ratio and a 12% increase in total assets. This compares to 1.9% and 9%, respectively, in the previous year. Winners of the Global Awards for the Best Islamic Financial Industries Worldwide have achieved above average profitability and growth.
Digitalization and AI remain strong areas of focus and investment as IFIs seek to improve customer growth, increase financial assets and deposits, and strengthen their competitiveness against traditional banks. Retail banking is still the mainstay of many Islamic banks, but IFIs are also strengthening their commercial banking offerings. Corporate finance, capital markets, and wealth management activities are also becoming increasingly important in this sector.
Low cost of funds contributes to the good profitability of Islamic banks. The largest group, which dominates its domestic markets, continues to outperform its competitors, demonstrating funding advantages and cost efficiencies.
The winners of the 2026 Best Islamic Financial Institutions Global Awards have also proven themselves as innovators by introducing new Islamic banking products, consolidating their market share, improving service quality, and achieving good financial results. Together, they have shown that they are well managed with clear strategies. Like all banks in the Middle East, however, they are facing a very challenging road due to new conflicts in the region, especially the Iran war that has disrupted the Persian Gulf.
This year's winner, Kuwait Finance House (KFH), enjoyed 17% growth in assets last year, reaching $139 billion, helping the bank maintain its position as the world's second largest Islamic institution. KFH has the most diverse geographic reach of any IFI, operating across the Middle East, Europe and Asia. It has advanced its digital transformation by moving from digital consumption to value-driven technology adoption.
Meanwhile, Boubyan Bank received the first Global Finance award as the Most Innovative Islamic Bank. The bank is distinguished by its innovation, technology-driven strategy, and strong commitment to providing financial solutions that enhance the customer experience. Boubyan has made significant progress over the past year in embedding AI into the services provided by its app.
Emirates Islamic Bank (EIB) took home the Best Islamic Financial Institution in the Middle East. The bank posted a 19% increase in net profit last year, reaching $910 million, driven by strong balance sheet growth. Lending grew by 26% over commercial and corporate banks. Backed by a sophisticated digital offering, EIB has seen its franchise strengthen with a variety of Shariah-compliant product offerings.
Meet the winners
