Islamic finance has bucked the downward trend as HSBC-Amanah has confirmed savings deposits are up by 209 per cent since January, with income from home finance products rising by 60 per cent.
Amjid Ali, head of HSBC-Amanah, said the figures were encouraging as they were boosted by recurring business. However, he did admit the sector had not escaped unscathed from market turmoil.
He said: “The key difference between ourselves and conventional banking is that we work on the basis of shared values. However, our customers are just as nervous about the current volatility and house deals are taking longer to put through as our clients continue to try and negotiate over prices even after we have organised the financing.”
Mr Ali said the business had continued to grow and confirmed the bank was looking at introducing a commercial proposition for its clients.
He said: “We have listened to our customers and are currently preparing a commercial range of products including aspects such as working capital and the financing of commercial property purchases.
“We are not yet ready to go to market but we aim to have this available as soon as possible.”
Referring to Alistair Darling’s announcement on the launch of a sovereign Sukuk, Mr Ali expressed doubts that anything would be launched this year as he said discussions remained very much ongoing.
He said: “There is a meeting between the various representatives of the Islamic finance sector and HM Treasury on 2 June. However, we are still at the discussion stage and these things take a while to develop.”
Iqbal Asaria, a consultant for Afkar Consulting, said the Islamic finance sector had remained largely unaffected by market turmoil although volumes remained static.
He said: “Muslim customers are like any other and are concerned by the current market. However, the sector remains stable as we are not exposed in the same way to sub-prime.
“At the moment we are very much concentrating, as an industry, on the issuance of a sovereign Sukuk. This has taken up a lot of energy as we look to how exactly they will be structured in a compliant way.”
Speaking about London’s title as the capital of Islamic finance, Mr Asaria said he very much doubted that countries such as France would be a serious contender for a while.
He said: “In London you have all the critical mass and expertise. This does not happen overnight. It is wonderful other countries are taking an interest but nearly every deal comes through London and most are reticent to originate any sort of deal elsewhere.”