Islamic Bank of Britain

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Islamic Bank of Britain

Type	Public (LSE: IBB)
Founded	2004
Headquarters	Birmingham, UK
Key people	Mohsen Moustafa, Chairman Gerry Deegan, Managing Director Sultan Choudhury, Commercial Director
Industry	Finance and Insurance
Products	Banking
Revenue	▼ GBP£8.83 million (2006)
Net income	▲ GBP£2.85 million (2006)
Website	www.islamic-bank.com

The Islamic Bank of Britain plc (LSE: IBB) is a commercial bank in the United Kingdom, established in August 2004 to offer Sharia compliant financial service products to British Muslims. The bank has six branches in London, Birmingham, Manchester and Leicester. It is the first British bank claiming to operate, in its entirety, according to Islamic principles.^[1], although non-Muslims are also allowed to hold accounts. ^[2]

The bank states that it runs on four values:^[3] faith, value, convenience, trust. Faith is an important factor for the bank, and accordingly branches close on Friday afternoons to allow the staff to attend Jummah (Friday) prayers^{[citation needed]}. The bank also has a Sharia Supervisory Committee to ensure that its products are compliant with Islamic teachings.^[4]

During four years of its operation it has made a good impact in Islamic Shariah Market. As at end of 2006, its customers totalled 30,814, increasing by 120% from the previous year.^[5]

Contents 1 History 2 Business Model 3 External links 4 References

[edit] History

The Islamic Bank of Britain was formed by a group of investors from the Middle East to take advantage of the growing market for Sharia compliant financial services in the UK. In July 2002, consultants and advisors were employed to confirm if such type of bank was needed and if it would be accepted by the Financial Services Authority, FSA.^[6]

Potential investors were invited, mainly from the Persian Gulf, who put together a private placement document which allowed the company to raise £14 million in start up capital by early 2003. In the same period, its first Managing Director, Michael Hanlon was recruited. Later that year, a draft business plan was proposed and formal application to the FSA was submitted.

By August 2004, the FSA granted authorisation of the bank ^[7], and subsequently led to the Islamic Bank of Britain available to the public.

[edit] Business Model

Unlike conventional banking, the Islamic Bank of Britain uses an alternative business model that does not include charging of interest. This eliminates the controversy for Muslims to hold bank accounts or mortgages with conventional UK banks that do charge interest.

In recent years, many UK banks, such as SABB and HSBC, seeing the potential to offer specifically tailored services for Muslim customers, have started offering Sharia-compliant accounts. However, the Islamic Bank of Britain is the first UK bank to offer entirely Sharia-compliant banking. This differs from larger banking conglomerates offering Sharia-compliant accounts in that the business model for their conventional banking system remains non-Sharia-compliant.

[edit] External links

• www.islamic-bank.com - Islamic Bank of Britain
• Q & A Islamic Finance(BBC) -
• Halal Mortgages TV ad - IBB's recent TV advertisement for Halal Mortgages

[edit] References

v • d • e Bank chains in the United Kingdom Commercial Allied Irish Banks Allied Irish Bank · First Trust Bank Bank of Ireland Bank of Ireland · Bristol & West Barclays plc Barclays Bank Citigroup Egg The Co-operative Group The Co-operative Bank · Smile  · Britannia Danske Bank Northern Bank Dresdner Bank private banking: Kleinwort Benson Grupo Santander Abbey · Alliance & Leicester · Bradford & Bingley · Cahoot private banking: Cater Allen Private Bank HSBC First Direct · HFC Bank · HSBC Bank Lloyds Banking Group Bank of Scotland · Birmingham Midshires · Cheltenham & Gloucester · Halifax · Intelligent Finance · Lloyds TSB partnership Sainsbury's Bank National Australia Bank Group Clydesdale Bank · Yorkshire Bank Royal Bank of Scotland Group National Westminster Bank · Royal Bank of Scotland · Ulster Bank private banking: Adam and Company · Child & Co. · Coutts & Co. · Drummonds Bank Salvation Army Reliance Bank Tesco Tesco Bank Independent Airdrie Savings Bank · Anglo Irish Bank · Close Brothers Group · Handelsbanken · Islamic Bank of Britain · Julian Hodge Bank · Standard Chartered Bank Private banks Arbuthnot Latham & Co · Butterfield Private Bank · C. Hoare & Co · Duncan Lawrie · Harrods Bank · N M Rothschild & Sons · Raphaels Bank State-owned UK Financial Investments Limited National Savings and Investments · Bradford & Bingley (mortgage assets only) · Northern Rock The bank groups marked in pink indicate the UK's big four banks.