Global Finance’s World’s Best IFI winners outperformed the sector in 2025, emphasizing innovation and AI adoption. But new Mideast conflicts pose new challenges.
Islamic financial institutions (IFIs) modestly improved their performance in 2025, recording an average Return on Average Assets of 2% and a 12% increase in total assets. This compares to 1.9% and 9%, respectively, in the prior year. The winners of Global Finance’s World’s Best Islamic Financial Institutions Awards all achieved above-average profitability and growth.
Digitalization and AI remain strong areas of focus and investment as IFIs seek to drive customer growth, increase financing assets and deposits, and strengthen their competitiveness against conventional banks. Retail banking remains the main pillar of most Islamic banks, but IFIs are strengthening their commercial banking delivery as well. Corporate finance, capital markets, and wealth management activities are also becoming increasingly important to the sector.
A relatively low cost of funds contributes to Islamic banks’ positive margins. The biggest of the group, which dominate their domestic markets, continue to outperform their rivals, reflecting funding advantages and cost efficiencies.
The winners of Global Finance’s 2026 World’s Best Islamic Financial Institutions Awards have also distinguished themselves as innovative by introducing new Islamic banking products, consolidating their market share, improving service quality, and achieving good financial results. Collectively, they have shown themselves to be well managed with clear strategies. Like all Middle Eastern banks, however, they face a more challenging road ahead due to the new conflicts in the region, particularly the Iran war that’s disrupted the Persian Gulf.
This year’s top winner, Kuwait Finance House (KFH), enjoyed asset growth of 17% last year, to $139 billion, helping the bank maintain its position as the second-largest Islamic institution globally. KFH has the most diverse geographical reach of any IFI, with operations throughout the Middle East, Europe, and Asia. It has advanced its digital transformation by shifting from basic digitization to value-driven technology adoption.
Meanwhile, Boubyan Bank claimed Global Finance’s inaugural award as Most Innovative Islamic Bank. The bank stands apart for its innovation, technology-driven strategy, and strong commitment to offering financial solutions that enhance the customer experience. Boubyan made significant progress last year in embedding AI into services offered through its app.
Emirates Islamic Bank (EIB) took home the Best Islamic Financial Institution in The Middle East. The bank notched 19% growth in net profit last year, to $910 million, driven by robust balance-sheet growth. Lending grew 26% over both retail and corporate banking. Supported by a sophisticated digital offering, EIB has seen its franchise strengthen through a wide range of Shariah-compliant pro-duct offerings.
Meet the Winners
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