The Islamic Bank of Britain has once again joined forces with the National Zakat Foundation (NZF), a charity which collects and distributes funds to Muslims in the UK. The coming months will see the Bank and NZF roll out a number of activities for the benefit of IBB 's customers, including a Q&A event held via Twitter, NZF's Zakat education guide, available to download on the IBB website, private consultations for IBB customers with NZF Zakat specialists, a Zakat payment service, and an exclusive Zakat video Q&A from NZF. The aim of the IBB and NZF partnership is to promote a better understanding of Zakat amongst British Muslims.
Euroclear UK and Ireland (EUI) is to bring to the market the first UK Soverign Sukuk bond. The £200 million Sukuk bond will primarily be issued in Brussels-based Euroclear and will settle in EUI and Euro Bank from 2 July. EUI is to provide an issuance, settlement and safekeeping service for this premier UK government Sukuk bond. UI already holds £1.3 trillion worth of gilts on behalf of clients. Euroclear Bank has a strong history of providing post-trade expertise in sharia compliant debt – last year Euroclear Bank partnered with Borse Dubai to support asset servicing for clients purchasing bonds on NASDAQ Dubai’s Sukuk trading platform.
In his Keynote Address at the 2014 London Sukuk Summit on 18 June, Jaseem Ahmed, Secretary-General, Islamic Financial Services Board, noted that the high growth rate of the Islamic finance industry has led to the emergence of Islamic finance sectors that have attained systemic importance in a number of key economies in Asia and the wider Gulf and Middle East. The second aspect of the global IF industry he highlighted is that rapid growth of Islamic finance is taking place in a group of nations that display wide variation in their market, institutional and policy and regulatory development. The IFSB Secretary General noted that the key priority is to find the resources and organisational modes and partnerships that help committed jurisdictions to meet the challenges they face, and wish for assistance in addressing.
The Islamic Bank of Britain plc (IBB) has accredited a new fully Sharia compliant auto-enrolment Pension Scheme: the Islamic Pension Trust. It has been launched to address the need for a Sharia compliant pension scheme to meet the criteria for automatic enrolment, as defined by the Government. This means that employers in the UK can meet their legal obligation to automatically enrol eligible Muslim employees into a qualifying workplace pension scheme. Eligible employees - i.e. those who are not in a company pension scheme, earning more than £10,0000 a year (2014/2015) and aged over 22 but under State Pension Age - represent a large proportion of the Muslim population.
A new loan called a ‘takaful’ will be made available in Great Britain to allow Muslims to fund their studies without contravening their beliefs. The money allocated - and the repayment amounts – will be equivalent to the set-up for all other students, who must pay university fees of up £9,000 a year. But the co-operative system will see repayments paid back into a communal fund and used to finance future students who choose to join it, so all members benefit equally. That will allow those paying the tackaful to view it as a charitable donation – rather than a loan. However, the earliest the change can be introduced is 2016 and it could be later, because new legislation is needed.
Barwa Bank has been appointed as one of five Joint Lead Managers for the UK's £200m debut sovereign sukuk. The Qatari lender takes its place alongside HSBC, Standard Chartered, National Bank of Abu Dhabi and CIMB of Malaysia. Of the five banks involved, Barwa Bank is the only Qatari bank selected and the only wholly Shariah-compliant mandated bank on the panel. Britain's first sovereign sukuk delivers on the government's commitment to become the western hub of Islamic finance. Very strong demand for the sukuk is expected, resulting in a price that delivers good value for money.
Islamic Bank of Britain plc (IBB) has appointed Sultan Choudhury as Chief Executive Officer (CEO) and Director. He previously held the position of interim Managing Director of IBB. IBB is celebrating its 10 year anniversary this year and Mr Choudhury is the Bank’s longest-serving employee. He joined IBB when it was formed in 2004 and has since set up the Bank’s Head Office operations and Branch Network. Mr Choudhury has also led the development and implementation of IBB’s full product range and service delivery channels. As CEO, Mr Choudhury is working with IBB’s new parent company on plans to expand property finance to businesses, including development finance.
UK-based retail lender Islamic Bank of Britain (IBB) plans to broaden its product range to win business both locally and across Europe, aided by the backing of its new Qatari shareholder Masraf Al-Rayan. IBB is developing its commercial property business to widen fee-based income as it aims to post a profit for the first time, newly-appointed CEO Sultan Choudhury said. Masraf Al-Rayan in February injected 75.8 million pounds ($129 million) into IBB to support its expansion plans. The bank's property finance business has doubled in size in the last year, which could allow IBB to expand later into Europe, said Choudhury, adding its retail operations would remain focused in the UK. IBB also aims to buy some of the 200 million pounds of sukuk that the British government will issue this week.
Gatehouse?Bank has completed its first real estate financing deal. The £11.7m deal funds a joint venture between Princeton Property Partners and Resolution Property, and will turn an office block in Fitzrovia into eight flats. Meanwhile, Gatehouse Bank has hired Nick Westoby from RBS, Arnaud Schaller from Credit Agricole and Eduardo Martin from Banco Popular Espanol to bolster its real estate financing unit. Gatehouse said it has financing deal worth more than £500m in the pipeline.
QIB-UK, a subsidiary of Qatar Islamic Bank (QIB), is offering real estate investment opportunities for premium clients looking to purchase properties in London. The bank’s network gives interested clients early access to residential real estate opportunities. They will enjoy privileged introductions to opportunities in the London real estate market both for buyers and investors alike. In addition, the bank offers a full suite of Shari’ah-compliant structured commercial real estate financing products including investment, residential development and mezzanine financing to clients.
Last week, Britain mandated five banks to arrange a 200 million pound ($336 million) sukuk issue which could be issued in coming weeks, subject to market conditions. Britain's choice of HSBC, Qatar's Barwa Bank, Malaysia's CIMB, National Bank of Abu Dhabi and Standard Chartered as arrangers appeared designed to ensure easy distribution and tight pricing. But the choice was notable for excluding all of Britain's six full-fledged Islamic banks; none was included in the mandate. That could reduce the impact of the issue in developing expertise and depth in Britain's Islamic banking sector. It may also limit British banks' access to the issue.
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.
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.
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 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.
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.
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.
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 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.
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.