UK

Wahed Invest launches #UK’s first easy access digital Halal investment platform

Wahed Invest has launched the UK’s first Halal online investment platform that is authorised by the Financial Conduct Authority. This way savers from all income brackets can easily invest in a globally diversified portfolio of ethically responsible stocks, Islamic bonds and gold. The platform, which is already available in the USA across all 50 states, allows users to open an account in minutes with a minimum investment of £100. For the first time, mainstream investors can gain access to products not traditionally available to retail investors, such as Sukuk. In order to ensure all returns are Halal, Wahed has a full-time Ethical Review Board. The Ethical Board is chaired by Sheikh Taha Abdul Basser alongside Sheikh Humza Maqbool Chaudhry and Sheikh Musa Furber.

Sadiq Khan backs #crowdfunding campaign for pro bono advice app

The mayor of London, Sadiq Khan, has backed a campaign to raise money to boost free legal services to disadvantaged people. The money is being raised on a crowdfunding site for an application that could be made accessible through advice centres and even food banks. According to Lucy Scott-Moncrieff, the former president of the Law Society, £25,000 has been raised for the project so far and £2,000 more is needed to launch the six-month pilot this September.

Savings Status Quo Challenged As 79% Of Shariah-Compliant Accounts Now Beat The Market

Gatehouse Bank surveyed eight different types of account: easy access, 1, 2, 3 and 5 Year Fixed Term and 30, 60 and 90 Day Notice accounts. It found average returns on Shariah-compliant savings products trumped their mainstream counterparts on all account types bar one, easy access. Overall, the average rate on Shariah-compliant products was 1.54% while the average for mainstream accounts was 1.29%, a difference of 0.25%. All but three of the 14 Shariah-compliant accounts surveyed beat the market average. Shariah-compliant savings accounts in the UK are growing in popularity, amongst both Muslim and non-Muslim savers. According to Gatehouse Bank CEO Charles Haresnape, what we’re seeing is the emergence of a genuine challenge to the UK savings establishment.

MOVES-#Britain's largest Islamic bank Al Rayan appoints new COO

Birmingham-based Al Rayan Bank appointed Paul McMillan as chief operating officer as part of the bank’s expansion efforts. McMillan, a former chief executive of mortgage servicing firm Acenden, takes over the role from the bank’s previous COO Venkat Chandrasekar. Al Rayan is one of the five standalone Islamic banks in Britain and is owned by Qatar’s Masraf Al Rayan.

Growing Islamic finance firms lobby British government for #tax relief

Islamic finance firms are lobbying the British government for tax reforms, arguing that the treatment of some shariah-compliant structures is hindering their growth. Islamic financial transactions often require multiple title transfers of underlying assets, which can trigger double or even triple tax charges. More than 20 firms offer Islamic financial products in Britain. According to Samir Alamad, head of product development at Al Rayan Bank, capital gains taxes are affecting Islamic banks and their customers. He added that taxes on investment property and commercial finance also need clarification. Islamic banks are expanding, but there are concerns that future changes could also have an impact on the sector. The government’s 2017 budget has proposed changes starting from 2019 to the tax status of nonresident investors and the way they are taxed on real estate disposals.

Abu Dhabi Islamic Bank Funds $32.2 Million Deal Of A #UK Property

Abu Dhabi Islamic Bank (ADIB) UK, has arranged a Sharia’a-compliant transaction to finance the acquisition of Lateral House, located in Leeds, UK. The deal involves a sum of $32.2 million on behalf of an Abu Dhabi-based private banking client. Earlier this year the bank arranged the acquisition of The Hub, located at the Aztec West Business Park, Bristol, for $43.4 million on behalf of a private Saudi based client. Lateral House is a modern Grade A office building providing 95,317 square feet of net lettable commercial office space. ADIB was the first UAE-based bank providing Islamic financial services to be licensed to operate in the UK. Today, it is just one of six banks in the UK providing Sharia-compliant services.

#UK Mosque Opens #Crypto #Donations in National First 'Bitcoin Ramadan'

A UK mosque has broken with opinion and opted to accept cryptocurrency donations for this year’s Ramadan period. The Shacklewell Lane Mosque in East London partnered with local Blockchain startup Combo Innovation to set up a Bitcoin and Ethereum wallet for the Ramadan practice of Zakat. The UK’s only Turkish-owned mosque is going against the rulings of various Islamic scholars and the Turkish government, who previously determined cryptocurrency to be "incompatible" with Islam. The mosque hopes to raise around £10,000 ($13,300) for repairs to the building. So far, its Bitcoin address has received funds worth around $2000.

UK taxation needs to accommodate Shariah compliant #real estate refinancing

For well over a decade, the UK has been amending its tax laws for Islamic finance. The goal is to ensure that Islamic finance transactions are not taxed more heavily, or more lightly, than their conventional finance equivalents. In a diminishing musharaka transaction a property is being sold twice, once by the individual to the bank and then by the bank back to the individual. Countries that charge tax on transfers of real estate will typically do so for both sales. Furthermore, the individual has sold for $750,000 a property that cost him $100,000, so if the country taxes gains arising on the sale of property, the individual can expect to be taxed on the $650,000 gain. In the United Kingdom, the real estate transfer tax charges were eliminated. However, the capital gains tax charge triggered by the sale remains in the case of sales to Islamic banks. The UK’s Chartered Institute of Taxation has now proposed that the gain on the Islamic financing transaction described above should not be taxed.

Al Baraka Banking Group and the Bank of London & The Middle East (BLME) sign a Memorandum of Understanding to enhance their collaborations and product offerings.

Al Baraka Banking Group (ABG) has signed a Memorandum of Understanding (MoU) with the Bank of London & The Middle East (BLME). The MoU was signed by Mohammed El Qaq, Senior Vice President & Head of Commercial Banking of Al Baraka Banking Group and Andrew Ball, Head of Wealth Management of BLME. The MoU provides both parties with opportunities to collaborate and gives BLME the chance to provide Al Baraka clients with investment opportunities in UK real estate. According to ABG President Adnan Ahmed Yousif, the MOU will enable the bank to enhance its product offerings and capitalize on its geographic diversification and wide client base. Al Baraka currently has a strong presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq, Saudi Arabia and Morocco, including two representative offices in Indonesia and Libya.

AXA partners with Cobalt Underwriting for Sharia-compliant policy

AXA Insurance has teamed up with Cobalt Underwriting to create a new Shariah-compliant insurance product for the real estate sector. As part of the partnership, AXA directly manages the trading and underwriting of the product. Cobalt employs in-house Shariah scholars who provide each client with Shariah compliance certification. The new product is part of AXA’s wider strategy to bring new products to under-served sections of the insurance market. Ryan Birbeck, head of real estate specialty at AXA Insurance, said that the addition of a Shariah-compliant insurance policy was an obvious move as overseas investment continues to flow into the UK real estate sector.

London’s #takaful standards seeking Shariah scholars’ approval by year-end for 2019 roll-out – industry association

London’s draft standards for transaction of Islamic commercial insurance are seeking Shariah scholars’ approval this year for roll-out next year. The Islamic Insurance Association of London (IIAL), which counts Lloyd’s of London as a founding member, has sought Shariah and legal opinion for the standards framework it has developed. The planned roll-out of IIAL’s takaful standards will more or less coincide with the UK’s departure from the European Union on March 29 next year. According to IIAL secretary-general Jon Guy, lots of managing general agents (MGAs) will target UK retail takaful because they will have the ability to access Shariah-compliant capital. Once the syndicates have gone through the regulatory and administrative setup, they will be very keen at looking at how they can deploy it.

#UK injunction restricts Dana Gas dividends in $700 million #sukuk dispute

United Arab Emirates energy firm Dana Gas received a new injunction from the English High Court restricting its ability to pay dividends or increase its debt. Sukuk holders have been trying to force the company to redeem the sukuk since last year. Dana said in late March that it would seek shareholder approval on April 11 to pay a cash dividend for 2017. The dividend would be worth 5% of capital or about 349 million dirhams (67.4 million pounds). But the English High Court order blocked Dana from making dividend payments unless it also sets aside money to redeem the sukuk. It also prohibited Dana from increasing its debt by more than $25 million.

Gatehouse Bank launches Shariah-compliant case management platform

Gatehouse Bank has launched a Shariah-compliant home finance platform, enabling intermediaries to process home finance and buy-to-let applications quicker. The platform is developed by financial services software provider BEP Systems and uses cloud-based mobile-ready technology. Gatehouse Bank CEO Charles Haresnape is delighted to partner with BEP Systems. The bank currently offers buy-to-let finance and plans to roll out Shariah-compliant home owner finance through selected brokers in the near future.

ADIB funds GBP19 million acquisition of Bristol's The Hub

Abu Dhabi Islamic Bank (ADIB) has arranged an Islamic financing transaction to fund the acquisition of The Hub, located at the Aztec West Business Park, Bristol. The transaction is worth GBP19.35 million and is arranged on behalf of a private Saudi-based client. The Hub is a regional UK office for Atkins, a multinational design, engineering and project management consultancy. The building has been awarded a BREEAM excellent rating, as overall carbon emissions are more than a third lower than expected for a building of its size. ADIB opened its office at One Hyde Park in London in May 2012 and was the first UAE-based bank providing Islamic financial services to be licenced to operate in the UK, being one of the six banks that are fully Shari'ah-compliant.

London Islamic Finance Centre Shines at #Sukuk #Summit

Leading Islamic finance experts gathered at the London Stock Exchange for the Sukuk Summit organized by the Islamic Development Bank (IDB). IDB President Dr Bandar Hajjar highlighted the need for London to be at the heart of the "Islamic finance revolution" and for it to leverage its global marketplace. He highlighted the continued global growth of the Islamic finance market, in particular the growth within the UK. He also cited the financial inclusion and shared prosperity model which is at the heart of Islamic finance transactions. The London Stock Exchange is home to a number of sukuk listings, with 65 sukuk having been listed on the London Stock Exchange valued at $48 billion. John Glenn MP, Economic Secretary to the Treasury said the UK had supported market-driven innovations in the field of Islamic FinTech and the government was determined to ensure continuation.

#UK Islamic bonds to be worth GBP58 billion by 2028

UK’s Gatehouse Bank has calculated that the value of Sukuk assets listed on the London Stock Exchange (LSE) would double to GBP57.8 billion in the next decade, if issues continue at their current rate of growth. Sukuk only began life in the UK in 2007, but their numbers have been swelling at an annual rate of around 5%, though they are still little understood. Gatehouse Bank CEO Charles Haresnape sees this growth as a huge opportunity for Britain. He urges the Government to capitalise on this week's summit on Islamic finance and make it more than just a single effort for one large oil company to list on the LSE. He believes an on-going trade mission is needed to make London the world centre for all Islamic finance.

London can be at the heart of the Islamic finance revolution

This Monday the world’s leading investors and experts will meet in London to discuss Islamic finance, with special focus on the Sukuk. Islamic finance has grown significantly within the UK in recent years. The Islamic Development Bank (IDB)’s funding plan for the first half of 2018 is estimated at $2.5bn, the largest since the Bank’s inception. A benchmark sized Sukuk issue will soon be launched ant the proceeds will be used to support infrastructure, education and health projects across the 57 member countries. According to IDB president Bandar Hajjar, the UK and London in particular will be at the heart of the Islamic finance revolution and Monday’s summit is a great place to start.

An example of the risk to international investors from local country legal regimes

The Dana Gas sukuk case illustrates the dangers of local country courts favouring domestic companies. Wherever possible, international investors should avoid local law. The most commonly used is English law, even for commercial arrangements that have nothing to do with the UK, because English law is well-developed and English courts have a deserved reputation for legal competence and impartiality. Dana Gas raised money from international investors by issuing sukuk. The money so raised was invested in a mudarabah agreement with Dana Gas, written under UAE law. Dana Gas also entered into a purchase undertaking, written under English law. Under UAE law, sukuk investors would have been sunk, having to litigate about whether the commercial arrangements were or were not Shariah compliant. However, they were saved by the purchase undertaking being under English law.

Al Rayan Bank #UK’s £250mn #sukuk priced at 80 bps over 3-month Libor

Al Rayan Bank UK has priced its £250mn Islamic bond "Tolkien Funding Sukuk No 1" at 80 basis points over three-month Libor (London Inter-bank Offered Rate). The transaction is secured by a portfolio of prime UK, first-charge, owner-occupied, home purchase plans, originated by Al Rayan Bank. The sterling-denominated sukuk has an expected called weighted average life of three years. Proceeds raised from the sukuk issuance would be used by Al Rayan Bank to fund further growth in its asset book, which has increased by more than 23% over the last 12 months. Such residential mortgage backed securities (RMBS) are relatively rare in Islamic finance. The bank believes that there would be more opportunities to issue sukuk in the future and a higher potential for other Islamic banks to tap into the RMBS market.

For Islamic banks, Shariah compliance is a foundation attribute

Because Shariah compliance is essential for all Islamic banks, it does not distinguish one Islamic bank from another. Hence it is a foundation attribute. About 25 years ago, Price Waterhouse made a distinction between foundation attributes and leverage attributes. Foundation attributes convey no competitive advantage. Al Rayan Bank is the only Islamic bank in the UK which targets ordinary retail customers. The bank's homepage gives very prominent coverage to its Shariah compliance. That is because Al Rayan is not competing against other retail Islamic banks but rather seeking to create a retail Islamic finance market where none has existed before.

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