A growing number of Islamic banks will turn to new markets such as London, South Korea and Hong Kong as growth matures in traditional centres and the Middle East grapples with the fallout of Dubai's debt restructuring.
But BNP Paribas Najmah said the Gulf and Southeast Asia would remain the industry's main drivers.
"I don't believe we will see a lot of income coming from other places. There's still a long way to go (for the other markets)," BNP Paribas Najmah chief executive Jacques Tripon said in an interview.
"The UK has been talking about the sovereign sukuk for the last three years. I am not sure of the status of this. I am also not sure that the Islamic banks in Great Britain are very profitable. We have been talking about developing Islamic finance in France for the last two or three years, we've made a lot of progress but still there are a lot of challenges."
He said BNP Paribas Najmah plans to hire more bankers but declined to say how many are already working for him.
Practitioners say the drastic impact of the Gulf real estate crash on Islamic banks' earnings highlighted the need for the industry to diversify into different sectors and markets.
Bahrain's Gulf Finance House suffered a full-year net loss of $728 million in 2009, compared to a $292 million profit the previous year.
Kuwait Finance House, the Gulf state's top Islamic bank, posted a 24 percent drop in net profit in 2009 to 118.74 million dinars.
Tripon said the Middle East Islamic finance market would see some growth this year although most of the recovery would be in the next two years.
"2010 will again be a difficult year but not only for Islamic banking."
"We haven't seen all the negative impact of the real estate crisis on the balance sheet (of Islamic financial institutions)."
Islamic finance will grow as Muslims become wealthier and demand products that comply with their religious beliefs and governments offer support for the industry, he said.
source : Reuters