UK

Bahrain’s GFH in Legal Spat With ex-Leeds United Director David Haigh

Bahrain’s Gulf Finance House has become entangled in a dispute with a former executive at its Dubai-based private equity unit who the company alleges falsified invoices to siphon almost $5 million into bank accounts controlled by him. David Haigh, who was the deputy chief executive of GFH Capital until resigning this March, was arrested shortly after he arrived in Dubai about a month ago and has been in detention since. Legal authorities in Dubai are weighing criminal charges, according to an emailed statement from GFH, while the company has also filed a civil suit against him in the Dubai International Financial Centre. Mr. Haigh denied the GFH allegations.

U.K.: Willis to offer sharia-compliant commercial real estate coverage

Willis Group Holdings P.L.C. is set to offer sharia-compliant commercial real estate coverage in the United Kingdom. The coverage will be offered through the Islamic insurance platform developed by Cobalt Underwriting Services Ltd. The policy retains price neutrality, meaning premiums are equivalent to those in a conventional insurance policy. In March, Cobalt Underwriting added QBE Insurance Ltd.'s European division to its platform.

UK Islamic banks disappointed over plans for sukuk

The UK government's decision not to choose a local Islamic bank as an arranger for its sukuk is a lost opportunity to promote the homegrown Islamic finance industry, according to Harris Irfan, of European Islamic Investment Bank. Malaysia’s CIMB, Qatar’s Barwa, National Bank of Abu Dhabi, Standard Chartered and HSBC have been chosen to lead the sale.

Insurance broker Willis adds Islamic real estate cover in UK

Insurance broker Willis Group Holdings will offer sharia-compliant commercial real estate coverage in Britain for the first time. New York-listed Willis will offer the coverage through the Islamic insurance platform developed by London-based Cobalt Underwriting. The policy retains price neutrality, meaning premiums are equivalent to those in a conventional insurance policy. Cobalt's platform uses a syndication model to help spread risk across a panel of underwriters, allowing multiple insurers to pool their capacity while each can subscribe to their desired level of risk though individual Islamic windows. The risk is priced by a lead insurer and other firms must then subscribe under similar terms.

Gatehouse Bank appoints new boss to grow the firm in London

Henry Thompson will take over the role of London-based Gatehouse Bank's new boss with immediate effect. He substitutes current chairman and chief executive Fahed Faisal Boodai, who will remain in his role as executive chairman. Thompson had been working in Shariah-compliant finance at Arcapita as head of legal before. Gatehouse, which offers investment banking services, has been aiming to get a foothold in London’s wealth management sector and recently opened a new office in Mayfair. Boodai said Thompson brings with him sector knowledge, which complements the activities of Gatehouse Bank.

Islamic finance sector set to create 1m jobs

The first UK-Bahrain Islamic Finance Summit was held in London and highlighted the importance of co-operation in the area of educational and training development in Islamic finance. The BIBF presented a paper on that topic, saying that a million professional Islamic finance jobs are expected to be created worldwide by 2020. The paper highlighted several trends and facts within the Islamic financial sector. It also highlighted that this has produced a paradigm shift from an educational standpoint in Organisation of Islamic Co-operation countries and will generate multiple specialised training opportunities for human capital development within the sector. The BIBF team also participated in many panel discussions during the event, focusing on investment, education, and regulation.

Bank Mellat files application for a judicial review against the UK Government

Iran's Bank Mellat filed an application for a judicial review against the UK Government in the Administrative Court on 16 April 2014. In its final ruling last June, the UK Supreme Court found that by imposing domestic sanctions against Bank Mellat, the UK Government acted both “unlawfully and irrationally”. Following the UK Supreme Court decision, Bank Mellat had asked the UK Government to withdraw its 2010 listing proposal to the EU Council. It was hoped that this may have been sufficient to convince the EU Council to give up on its own sanctions against the bank. However, the UK Government has refused to withdraw the proposal. The UK Government has also now applied for permission to intervene in support of the EU Council’s appeal against the first European Court decision.

London-based Islamic bank EIIB swings back to profit, eyes capital reduction

London-based European Islamic Investment Bank (EIIB.L) will propose a capital reduction plan next month to enhance returns for its shareholders, after the firm swung back into profit in the 2013 financial year. EIIB will seek shareholder approval for the plan, which could potentially take the shape of a share buyback or a tender offer, during its annual general meeting in June. The firm posted a pre-tax operating profit of 1.5 million pounds in 2013, compared to a 10.1 million pounds loss a year earlier. Under its 2012-2016 strategy, EIIB is restructuring its business by exiting higher-risk private equity investments, seeking more stable income streams such as asset management and advisory services under its EIIB-Rasmala brand.

REFILE-London-based RiverCrossing debuts with Islamic real estate fund

London-based RiverCrossing Capital Partners, a new Islamic investment firm, has launched its first product, a U.S. real estate fund, as part of a plan to offer non-traditional asset classes to institutional investors in the Gulf. The firm will develop asset-based funds with a non-cyclical nature, chairman Mohammed Abdulmalik said. RiverCrossing's first fund will have a target investment horizon of five years and focus on medical offices, self-storage facilities and senior and student housing in the United States, he added. RiverCrossing aims to raise $45 million in the first tranche of its Alternative Real Estate U.S. Fund this quarter, reaching a total of $125 million with a second tranche in the next 12 to 18 months.

This Islamic bank wants to get Britain building

Britain could become the first truly global Islamic finance centre if the government sets its mind to attracting infrastructure investment, according to Gatehouse Bank’s chairman Fahed Faisal Boodai. He estimates the industry is worth $1.5 trillion, and the sector is growing at around 20 per cent per year. Chancellor George Osborne is raising £200m with a sharia-compliant bond, the bank alone expects to buy £30m to £40m of the sukuk, and predicts bids for the debt to run into the billions of pounds. However, one problem is finding investment opportunities which meet stringent sharia standards. More certainty is needed if the government wants to unlock Islamic investment into infrastructure on the grand scale needed.

UK launches consultation on Shari’ah-compliant student finance

UK Universities Minister David Willetts has launched a 12-week consultation period on Shari’ah compliant student loans with the aim of getting more Muslim students into higher education in the UK. The Department for Business, Innovation and Skills (BIS) has been developing a model alternative finance product which would be Shari’ah-compliant and could potentially be offered alongside traditional loans. This model finance product has been developed by experts in Sharia-compliant finance and has received preliminary approval from the Islamic Bank of Britain’s Sharia supervisory committee. The consultation seeks to determine whether the alternative finance model identified would be acceptable to anyone who might be deterred from the conventional system.

Bank of England may broaden Islamic liquidity tools

The Bank of England is studying ways to increase the number of Shariah-compliant assets that Islamic financial institutions can use in their liquidity buffers. Currently, sukuk issued by the AAA-rated Islamic Development Bank are the only assets that meet the central bank’s criteria for use in the liquidity buffers of the 22 Islamic financial institutions operating in Britain. In addition to reducing risks, expanding the eligible list could improve growth prospects for the industry and remove a potential entry barrier to the sector. The Bank of England’s proposal is in line with the approach of Basel III global banking regulations, which allow sukuk issued by high-rated sovereigns to be included in the liquid assets buffer without a haircut. Sukuk issued by sovereigns with lower credit ratings and other non-financial issuers could also be eligible, subject to haircuts and caps.

Premier in London on Islamic finance mission

Premier of Bermuda, Craig Cannonier, and Finance Minister Bob Richards are in London this week to lead efforts to bring Islamic finance business to the Island. The pair will attend the Global Islamic Finance and Investment Group (IFIG) Conference and speak to a number of industry stakeholders. The objective of the IFIG Conference is to highlight the necessary regulatory frameworks for Islamic finance and to outline strategies for successful international collaboration. In addition, the Premier is due to meet with UK Government Minister Mark Simmons of the Foreign and Commonwealth Office and representatives of the UK Treasury. Bermuda has already established partnerships with the main financial centres in a range of Muslim countries and has signed double taxation agreements with Qatar and Bahrain.

Islamic investment becoming ‘financial powerhouse’ in the UK

Sharia-compliant investment is rapidly growing in the UK and has become a “financial powerhouse”, according to specialist asset manager London Central Portfolio (LCP). The UK government has taken a number of steps to promote London as a place for Muslims to invest, including launching an Islamic Finance Task Force and issuing Sharia bonds. According to LCP, London has taken in over £11.7 billion worth of Islamic investment in the last 10 years, making it the largest Islamic financial centre in the western world. However, there are still limited investment options in the sector when compared to the wider financial market. In order to address this issue, LCP and Simply Sharia have teamed up to organise a series of roadshows to look at the best Islamic investment opportunities in the market today. The events will be hosted by Signature Tax and will take place in Manchester, Birmingham, Leicester and London.

GFH Capital placement of prime central London property oversubscribed

GFH Capital has successfully placed its newly acquired prime central London residential property with GCC investors. The placement was oversubscribed by investors seeking attractive opportunities in the UK real estate market. The luxury property, which is located in Kensington, is a five unit Grade II listed building overlooking the Queens Gate Gardens. The investment is expected to deliver above average capital appreciation over the medium term for the bank and its investors. GFH Capital continues to assess other similar opportunities in the UK and US real estate markets where it sees value and upside potential. GFH Capital announced the acquisition of its Queens Gate Gardens property in early January 2014.

Islamic Bank to boost understanding of Sharia-compliant savings

Islamic Bank of Britain is hosting an information evening in London dedicated to improving the local community’s understanding of Sharia compliant savings. The event will take place on Thursday 20th March 2014 at Islamic Bank of Britain, 97-99 Whitechapel Road, London, E1 1DT, from 6.30 pm – 8.00 pm. The evening will consist of a brief presentation about how customers can maximise the returns from their savings in a tax-efficient and Sharia compliant way. This will be followed by an informal Q&A and discussion session, and will cover IBB’s future plans since becoming part of the Masraf Al Rayan Q.S.C. (MAR) group, Qatar’s largest Sharia compliant bank. IBB is holding the event following its launch of the UK’s only Sharia compliant Notice Cash Individual Savings Account, with an expected profit rate of 1.8% (per annum).

Islamic finance: UK’s maiden sukuk comes over all coy

The UK’s maiden sovereign sukuk issue was announced with considerable fanfare in October, and appears to be making progress. But the UK Treasury is not in a rush, and market participants are beginning to wonder why there is a delay. The sukuk will now reportedly take place in the "next financial year" – that is, no earlier than April 5, and potentially not even this year. Sajid Javid, MP, the financial secretary to the Treasury, said that it is very important that the UK has looked at everything in fine detail before issuing its first sukuk. Javid also confirmed that, for the moment, the UK only intends to issue one sukuk. This is a one-off issuance, not a long-term programme, and its main purpose is not financing for the government, but to develop the UK as a financial centre.

IDB President, UK Minister Discuss UK's Growing Role in Islamic Finance

The President of the Islamic Development Bank (IDB), Dr Ahmad Mohamed Ali, and the UK Senior Minister of State for the Foreign & Commonwealth Office, Baroness Warsi of Dewsbury, view positively the fast growth of Islamic finance in the UK. During a visit to the IDB headquarters in Jeddah, Baroness Warsi told the IDB President that significant progress has been achieved by the UK Government in terms of Islamic finance. The UK is close to issuing its first sovereign sukuk which will possibly be issued by mid-2014, she said. Dr Ali and the Minister reiterated their commitment to the growing IDB-UK partnership in the area of development assistance and the economic empowerment of women. They also agreed to explore potential partnership opportunities in the development of Awqaf.

Oxford Opens Islamic Finance Platform

The Islamic Banking and Finance Society (IBFS) was inaugurated at Oxford Union Debating Chamber last Wednesday. The new society aims at acting as a platform for the Islamic finance as well as creating relationships between professionals in Islamic banking and finance students at Oxford. Financial experts have debated aspects of Islamic finance and banking, offering future economists a platform to better understand the industry. Presentations from Islamic finance Experts have also highlighted the ethical spirit of Islamic finance. The United Kingdom is one of the leading countries in the European Union to have Islamic banks. It is also developing its takaful market for Islamic insurance. Moreover, the UK also has a strong foothold in developing products such as commodity murabaha and Islamic retail services.

Sharia finance popular among non-Muslims

Sultan Choudhury, managing director of Islamic Bank of Britain, discussed findings from a poll of more than 300 investors by IBB, which showed one-third of respondents were non-Muslim. Some 66 per cent of those surveyed believed sharia finance was appropriate in a modern western society. A similar number (60 per cent) said sharia finance was relevant to all faiths, while more than half (58 per cent) said they considered Islamic finance to be an ethical system. IBB also reported 81 per cent of its customers said they were likely to use sharia-compliant finance again. This first piece of research will shape how the retail market for Islamic finance evolves, he added.

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