IslamicFinance.de

UK insurance giant Legal & General has signed a partnership with Islamic Bank of Britain (IBB) to make two Islamic home finance products available to financial intermediaries. The Home Purchase Plan (HPP) is IBB’s flagship Islamic mortgage product and is a mortgage alternative, which offers home finance without the use of interest. The Shari’ah-compliant product allows customers to purchase their home in partnership with the bank on a leasing (Ijara) and diminishing partnership (Musharaka) agreement. Islamic Bank of Britain pioneered Shari’ah-compliant retail banking in the UK and has launched a wide range of products, including the Home Purchase Plan (the halal mortgage alternative) Current Accounts, Savings Accounts and Personal Finance. Several of the bank’s products remain unique in the UK retail market.

Jane Bradley reported in the Scotsman on 3 April that Islamic Bank of Britain is introducting its mortgage product to Scotland. It is understood the launch is just the beginning of a wider push into Scotland – which is likely to include the opening of a physical branch and back office operations as well as the introduction of online retail banking for Scottish customers.

Islamic Bank of Britain, which offers Sharia-compliant banking services for individuals and businesses, reduced its loss by 15 % to GBP 5.9 mn in 2008 down from GBP 6.9 mn 2007. The bank put the reduction down primarily to growth in fee and commission income.

The customer numbers increased by 10 % to over 47,000 and deposits increased by 15 % GBP to 158 mn.

Two new major products were launched, an Islamic home finance and a 60-day notice savings account, which was launched in December 2008.

Malar Velaigam wrote on 25 March in Investors Chronicle about the progess of Islamic banking in UK from an investor's perspective. Only two Islamic finance companies have UK quotations, and neither of them has proved a very attractive investment so far.
 
The first Western Shariah-compliant commercial bank, the Islamic Bank of Britain (IBB). The bank floated in October 2004 at 25p a share, but now trades at half that price having hit a high of 13.7p and a low of 4.75p in the last year. It reported losses in 2005 till 2007. However, deposit basis and account numbers are growing substantially, while IBB customer base only represents 2.3 % of the 1.8 mn Muslim target market in UK yet.