Islamic banks in UK to double in five years

images43The number of Shariah-compliant investment banks in the UK is expected to more than double to 10 within five years, Islamic lender Gatehouse said yesterday.

The rise of banking that fulfill the requirements of Islamic law in the United Kingdom s being driven by government efforts to turn its capital into a global hub for the industry, said Samer Merhi, Gatehouse Bank executive director for institutional wealth management structuring and origination.

“It has the potential to grow because of the high demand and the interest to make the UK the international heart of Islamic finance business,” Merhi told Reuters on the sidelines of an Islamic finance forum in the Malaysian capital.

The UK has one full-fledged Islamic bank and four Islamic investment banks, he said.

Gatehouse, a subsidiary of the Securities House of Kuwait, started operating in April in the UK, which some industry observers say is the leading force in Europe in welcoming Islamic banking.

Britain intends to issue its own sovereign sukuk debt in a rolling programme worth around £2 billion (Dh14bn), although it has said legal barriers remain and it will make a final decision later in the year.

Islamic assets total around $1trn, the Asian Development Bank estimates, with annual growth of 10 to 15 per cent a year.

Driven largely by record amounts of oil money, Islamic banking is fast growing from a niche market into a mainstream business with centres such as Dubai, Hong Kong and Malaysia all coveting the title of global Islamic finance hub.

Gatehouse, with an authorised capital of £225m, currently focuses on Islamic capital markets, institutional wealth management, Islamic treasury business and advisory services.

“Asia is in our loop but we are now focusing on European and GCC markets,” Merhi said. The bank is studying $500m of Islamic banking deals including bonds, real estate as well as private equity and exchange traded funds, he said.

Muslims make up less than five per cent of the UK population and Merhi said there was limited consumer demand for Islamic banking products.

source : business24/7

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