Islamic banks aim to expand into Europe
The Islamic banks of London are preparing to gain more business from the 15 million European Muslims, who, other than those who live in London, they have had little effect upon.
By 2010 it is predicted that Islamic banking will reach a value of $1 trillion, a prediction that has led the UK to woo the sector with laws passed to enable easier transactions and the intention to deliver a sovereign Islamic bond.
London has approximately £3.5bn/$7.14bn Islamic bonds listed, with many large Islamic bond and loan deals occurring through the city, providing the British capital with an advantageous position compared to its European counterparts.
Farrukh Raza, speaking for the Islamic Bank of Britain, highlighted the British advantage by stating that whilst visiting a French conference about Islamic finance half the time was spent talking about the UK.
Islamic banks operating in Britain are required by European law to do so successfully for two years before being permitted to expand onto the continent.
France, which has 10% of its population made up of Muslims, over six million people, has no Islamic banking institutions.
There is a huge opportunity for Islamic banking throughout Europe, particularly in France, according to Derek Weist, Bank of London and the Middle East official.
However, there is the need for a change in regulations to make Islamic banking transactions easier.