Profits of UAE Islamic banks have risen 68 per cent in the past four years and are expected to tread higher against the backdrop of a flourishing economy and skyscraping oil prices.

Deposits have witnessed a similar swell in volumes, with the market share of Islamic banks consistently increasing against the conventional banking system, said a report.

Deposit collection saw a 22 per cent year on year increase in June 2007 and recorded a compounded growth of 44 per cent from 2003 to 2006.

In the first quarter of this year, Islamic banks' share in the UAE's total banking assets reached 13.4 per cent, the report said.