ISTANBUL: Turkey could emerge as a key market for Islamic finance while Asia continues to drive the industry’s growth but markets are still assessing the full impact of the global downturn on the sector, Maybank Islamic said on Tuesday. 

The recent growth of the sector coupled with the launch of several Islamic funds and a law granting tax neutrality to sukuk products have stirred talk that Turkey is poised to be the next growth market for sharia finance. 

Islamic banking assets accounted for about 5 per cent of Turkey’s assets as of end-2010 compared with 2.8 per cent five years earlier, Standard & Poor’s has said.

“That’s something not to be missed if we were looks at international expansion,” Muzaffar Hisham, Maybank Islamic’s chief executive, said on the sidelines of an Islamic banking conference. 

Kuveyt Turk, one of Turkey’s four Islamic banks and a unit of Kuwait Finance House, is expected to complete its 5-year $350 million sukuk issue this month, a sale that is expected to help ignite interest in Islamic financing. 

Kuala Lumpur-based Maybank Islamic, Asia-Pacific’s largest sharia lender, said the impact of the global downturn on the Islamic finance industry had yet to be determined.