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 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.
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 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.
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 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 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).
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.
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.
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.
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.
The Inauguration of the Islamic Banking and Finance Society (IBFS) at the Oxford Union Debating Chamber on February 12 featured presentations by leading figures from the Islamic finance world. Keynote speakers included Salah Jaidah, vice chairman of Mena at Deutsche Bank and chief country officer for Deutsche Bank Qatar; Baroness Warsi, Senior Minister of State and Minister for Faith and Communities, and the Ministerial lead on Islamic Finance; Nigel Denison, executive director of Bank of London and the Middle East (BLME), and Azeemeh Zaheer, vice president of Gatehouse Bank and former vice consul, US oil & gas sector head for the British Consulate General. The IBFS hopes to act as a platform for leading professionals in Islamic banking to create relationships with students at Oxford interested in pursuing a career in finance.
Muslim borrowers will be allowed to use Shariah-compliant Home Purchase Plans (HPP) under a change to the Government’s Help to Buy scheme aimed at extending the range of home buyers able to access taxpayer-backed funding. HPPs split ownership of a property between the borrower and their bank, a financing arrangement that accords with Islamic law that prevents muslims from using conventional mortgages that see borrowers paying interest to a lender. Sajid Javid, Financial Secretary to the Treasury, launched the updated scheme on February 11 at an Islamic finance conference in London.
Islamic Bank of Britain (IBB) has revealed findings from the first national survey to look into British consumers' understanding of, and attitudes towards Islamic finance. The survey was conducted among 300 British Muslim and non-Muslim consumers by independent research company 2Europe. Around two thirds of those surveyed felt that Sharia finance is appropriate in a modern western society and relevant to all faiths. 58% considered Islamic finance to be an ethical system of finance and one which considers the impact of its activities on society. Moreover, 81% of IBB 's customers are likely to use Sharia compliant finance again. The survey shows that there is strong potential for further growth of Islamic finance.
Bahrain-based investment firm Gulf Finance House said that a family consortium led by chairman of English soccer team Leeds United had bought a 5.71 percent stake in the company, estimated to be worth around 28.9 million dinars ($76.6 million).
WOMEN IN PHILANTHROPY
SEPTEMBER 23, 2013, CASS BUSINESS SCHOOL, LONDON
The Academy of Philanthropy will be featuring some of the world's renowned philanthropists, academician, and social innovators to lead a discussion on the vital role women play in the domain of philanthropy
Women in Philanthropy - Why Women?
September 23, Cass Business School, London
The British government is seeking to renew sanctions against Iran's Bank Mellat regardless of a court ruling branding the ban as unlawful. Britain's Treasury is now attempting to intervene in the European Union Council's appeal against a decision by the EU General Court in January to quash sanctions imposed against the Iranian bank. This comes after reports that Bank Mellat intends to make a legal claim of 500 million pounds against the UK government for loss of business caused by US-engineered illegal sanctions on Tehran between 2009 and 2013. Earlier on June, Britain’s Supreme Court also overturned a ruling against Bank Mellat over its alleged links to Tehran's nuclear energy program, saying the British government was wrong to have imposed sanctions on the bank.
The Islamic Bank of Britain (IBB) has opted to integrate Salesforce.com with its core banking systems in a bid to avoid costly and time-consuming upgrades that it would have faced if it had decided to roll-out on-premise solutions, such as Oracle Siebel or Microsoft Dynamics. Even though Salesforce is slightly more expensive over a three year Return on Investment (ROI) period, COO Mohamed Gamil believes that the benefits of a public cloud platform far outweigh the extra investment required. The Bank has just completed its third major project using the Salesforce platform, where it is now looking to bring on board as many systems as it can, so as to make application processes for online customers as seamless as posible. IBB went live with a new on-boarding application in January 2012, where it is now also integrated with the bank’s Misys platform using IFrame, so that existing customers can also take advantage of applying for new current accounts online using the Salesforce tools.
Iran's Bank Mellat is claiming GBP500 million ($782 million) from the U.K. Treasury after a London court ruled against a British decision to sanction the bank. In June, the U.K.'s highest court ruled against sanctions that had been imposed on Bank Mellat as a result of its alleged links to Tehran's nuclear program. The London ruling follows a similar decision in favor of Bank Mellat at a European Union court. But it won't lead to an end to restrictions against the bank for now because EU sanctions remain in place on Mellat. The U.K. sanctioned Mellat in 2009, banning its operations in the country and freezing its assets after it was accused of facilitating Iran's nuclear program. The measure was expanded to the rest of the European Union the following year.
Foot Anstey LLP, a South West law firm, is winning valuable contracts from the Middle East by specialising in Islamic finance. The firm, which has five offices across the South West región, is one of very few firms in the UK to be able to arrange finance deals in accordance with Islamic law. The Islamic finance team at Foot Anstey has recently advised Islamic banks and Middle Eastern investors on a range of high value and complex transactions. They have created structures to allow conventional and Islamic financiers to work together. Foot Anstey has already advised several Middle Eastern investors on Islamic finance deals. Although most of its business has been in the Middle East, where there is still potential growth, the firm is now looking to expand into South East Asia as well.