{"id":2645,"date":"2025-07-21T10:35:31","date_gmt":"2025-07-21T01:35:31","guid":{"rendered":"https:\/\/souqtimes.com\/?p=2645"},"modified":"2025-07-21T10:57:32","modified_gmt":"2025-07-21T01:57:32","slug":"turkey-and-uk-strengthen-islamic-finance-partnership-through-strategic","status":"publish","type":"post","link":"https:\/\/souqtimes.com\/ja\/finance\/2645\/","title":{"rendered":"Turkey and UK Strengthen Islamic Finance Partnership Through Strategic\u00a0"},"content":{"rendered":"

Turkey and the United Kingdom are positioning themselves as global leaders in Islamic finance expansion, formalizing their collaboration through a significant memorandum of understanding signed in July 2025.<\/span><\/p>\n

Growing Appeal of Islamic Finance<\/b><\/h2>\n

Amid global economic uncertainties, rising inflation, and increased capital costs, Islamic finance is experiencing a renaissance. This ethical financial system, which prohibits interest payments, discourages speculative activities, and requires tangible asset backing, offers greater stability during financial turbulence.<\/span><\/p>\n

Turkish Treasury and Finance Minister Mehmet \u015eim\u015fek emphasized that Islamic finance is “structurally better equipped to address uncertainty and ambiguity” compared to conventional systems. He noted that its fundamental principles, particularly risk-sharing mechanisms and profit-loss arrangements, provide enhanced resilience and liquidity during challenging economic periods.<\/span><\/p>\n

Strategic Partnership Formation<\/b><\/h2>\n

The collaboration was cemented during the UK-Turkey Islamic Finance Forum in London, hosted jointly by the UK Department for Business and Trade and Turkey’s Participation Banks Association (TKBB). The forum resulted in a memorandum of understanding between TKBB and UK Export Finance (UKEF) designed to deepen cooperation in Islamic finance.<\/span><\/p>\n

Mehmet Ali Akben, TKBB chairperson and Vakif Kat\u0131l\u0131m Bank general manager, outlined ambitious growth targets for Turkey’s participation finance sector, aiming to expand from the current 8% market share to 15% of the banking sector. He emphasized the strategic importance of cooperation between London, a major global financial center, and Istanbul’s developing financial hub.<\/span><\/p>\n

Market Expansion and International Appeal<\/b><\/h2>\n

While Islamic finance currently represents approximately 1% of global financial assets, its growth trajectory has been remarkable, expanding eleven-fold since 2000. In Turkey, the sector significantly outperforms the global average, comprising 8% of banking assets and over 12% of capital markets.<\/span><\/p>\n

UK trade officials recognize that Islamic finance’s ethical foundation appeals beyond Muslim investors to broader groups seeking value-aligned investments. Ben Aldred, deputy commissioner of Trade for Eastern Europe and Central Asia, noted growing international interest in investment values, with the UK having supported this sector for over a decade.<\/span><\/p>\n

London’s Strategic Role<\/b><\/h2>\n

London has established itself as a key venue for Turkish government Sukuk (Islamic bond) issuances, with officials encouraging more Turkish institutions to utilize London as a platform for accessing global Shariah-compliant capital. Hugh de Lusignan, head of financial services at the UK Department for Business and Trade, emphasized the importance of creating yield curves through regular bond issuances to enhance market transparency and investment accessibility.<\/span><\/p>\n

Turkey Wealth Fund Success<\/b><\/h2>\n

The partnership’s potential was demonstrated through the Turkey Wealth Fund’s landmark achievements. Their $750 million Sukuk issuance in October 2024 at the London Stock Exchange was oversubscribed by 14 times with a 6.95% return rate, setting historical records. This success led to a re-tap issuance in January 2025, bringing the total size to $1 billion.<\/span><\/p>\n

Strategic Geographic Advantage<\/b><\/h2>\n

Turkey’s position as a bridge between Europe, the Middle East, and Central Asia makes it an ideal hub for Islamic finance expansion. UK officials view Turkey as perfectly positioned to facilitate the spread of Islamic finance across regions showing significant growth interest.<\/span><\/p>\n

Global Market Outlook<\/b><\/h2>\n

The global Sukuk market is projected to exceed $1 trillion in outstanding volumes by 2025, according to Fitch Ratings. Sukuk represent 12% of all emerging market US dollar debt issuance (excluding China) in 2024, highlighting their increasing global significance. In core markets including Gulf Cooperation Council countries, Malaysia, Indonesia, Turkey, and Pakistan, Sukuk comprised 25% of total dollar debt capital market issuance.<\/span><\/p>\n

Future Implications<\/b><\/h2>\n

This partnership represents more than bilateral cooperation\u2014it signals a broader shift toward ethical finance systems that prioritize stability, transparency, and value alignment. As both countries leverage their respective strengths\u2014Turkey’s strategic location and growing Islamic finance sector, and the UK’s established financial infrastructure\u2014they are positioning themselves to lead the next phase of Islamic finance globalization.<\/span><\/p>\n

\n

Original Article:<\/b><\/p>\n

Daily Sabah. (2025, July 20). <\/span>T\u00fcrkiye-UK Islamic finance co-op gathers pace with new MoU signed.\u00a0<\/span><\/i>https:\/\/www.dailysabah.com\/business\/economy\/turkiye-uk-islamic-finance-co-op-gathers-pace-with-new-mou-signed\/amp<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Turkey and the United Kingdom are positioning themselves as global leaders in Islamic finance expansion, forma […]<\/p>\n","protected":false},"author":10,"featured_media":2646,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","inline_featured_image":false,"footnotes":""},"categories":[4],"tags":[318,151,1574,620,1573],"class_list":["post-2645","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-islamic-banking","tag-islamic-finance","tag-mou","tag-sukuk","tag-turkiye-uk-cooperation","pmpro-has-access"],"_links":{"self":[{"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/posts\/2645","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/comments?post=2645"}],"version-history":[{"count":2,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/posts\/2645\/revisions"}],"predecessor-version":[{"id":2658,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/posts\/2645\/revisions\/2658"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/media\/2646"}],"wp:attachment":[{"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/media?parent=2645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/categories?post=2645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/souqtimes.com\/ja\/wp-json\/wp\/v2\/tags?post=2645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}