KUALA LUMPUR: Bank Negara Malaysia (BNM) said Malaysia’s Islamic finance segment maintained its growth momentum in 2014, with its asset base expanding 12% in 2014, accounting for 25.6% of the total assets of the overall banking system.

In its financial stability and payment systems report 2014, the central bank said foreign currency assets in the sector also increased to RM27.7 billion from RM19.3 billion in 2013, reflecting the growing importance of cross-border transactions in Islamic finance.

For the takaful sector, BNM said total assets of takaful funds increased to RM22.7 billion as at end-2014 from RM20.9 billion in 2013.

Total net takaful contributions accounted for 13.3% of the total net premiums and contributions in the insurance and takaful sectors.

The central bank said Malaysia continued to be the preferred destination for the issuance of sukuk by corporations and international organisations, with 65.6% of new global issuances, amounting to US$77.9 billion originating in Malaysia in 2014.

“Latest available data places the share of all global outstanding sukuk which originated in Malaysia at just over 57%,” it said.

During the year, a total of five foreign currency-denominated sukuk were given the “Emas” status, bringing the number of “Emas” sukuk to 18 since 2009.

“Of significance, the year saw the first Japanese yen-denominated sukuk issued in Malaysia, further reinforcing Malaysia as the destination for multi-currency sukuk issuance,” said BNM.

This article first appeared in The Edge Financial Daily, on March 12, 2015.