Big demand for Islamic finance

Islamic banks’ profits are being hit by low interest rates, a still-subdued operating environment, and high provisioning costs, the rating agency said in a report.

KUALA LUMPUR: Strong demand for Islamic finance, which is growing faster than conventional banking, will partially offset the impact from the challenges being faced by the industry, said Moody’s Investors Service.

Islamic banks’ profits are being hit by low interest rates, a still-subdued operating environment, and high provisioning costs, the rating agency said in a report.