Category Archives: United Kingdom

UK leading the world in Islamic Finance

Zawya: UK leading the world in Islamic Finance

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Following the success of the World Islamic Banking Conference (WIBC) in Bahrain, the UK has been praised as the leading Western centre for Islamic finance and one of the world’s most attractive destinations for Islamic banks.

The conference, supported by UK Trade & Investment (UKTI), included an expert panel from the UK, which led debates on the future of the sector, both in the UK and around the world.

This panel included three members of the UK Islamic Finance Secretariat, as well as representatives of leading advisory firms.

They spoke to a large audience of Islamic wholesale and retail bankers from across the Gulf region and beyond, as well as advisors and other professional service providers specialising in Islamic Finance.  

The panel looked at the pitfalls and opportunities for Islamic finance in light of the global economic downturn and opportunities for growth in the sector, with some estimates putting its value at over US$4 trillion in the coming years.

Leading industry speakers said:

"Small corporates looking at sukuk issuance are favouring UK law – it’s a safe pair of hands. We have recently been asked to look at several issuances particular for this reason and also due to the experience we have in the UK working with international institutions," said Kazi Rahman, Lawyer, Wragge & Co.

Richard Thomas, CEO, Gatehouse bank said, "The UK is the number one centre for co-operation with other Islamic finance centres such as Bahrain and Malaysia."

"There is a great opportunity for investment and commercial banks to raise awareness of an alternative source of finance," said Sultan Choudhury, Director at the Islamic Bank of Britain.

"The UK is one of the most attractive banking destinations, particularly when it comes to Islamic finance. Rules and laws facilitate the use of Islamic products," said Darshan Bijur, Director of Islamic Finance Advisory, KPMG

The Panel challenged the audience to learn from UK experiences and implement changes within their own institutions.

The UK, and especially London, has been working to move the Islamic Finance sector from niche to mainstream over the last decade, with wide expertise and a financial infrastructure that is uniquely placed to support Islamic banking.

In the UK there are 18 major law firms providing legal services in Islamic Finance; Five stand-alone Sharia-compliant banks; Providers of education in Sharia compliant finance; Five of the largest national professional services firms with Islamic Finance teams based in London providing Sharia-complaint services.

The WIBC has been running for 17 years, and is the world’s largest and most influential gathering of Islamic finance industry leaders. This year there were over 1,200 international delegates from more than 50 countries.


Bahrain to share its Islamic finance expertise with Ireland

Bahrain to share its Islamic finance expertise with Ireland

A senior Irish delegation headed by Matthew Elderfield, the country’s top regulator, and former Prime Minister John Bruton, was in Bahrain on Wednesday for the signing of a memorandum of understanding between the two countries.

The agreement is set to pave the way for increased cooperation between the Central Bank of Bahrain and the Central Bank of Ireland, including on the supervision of financial institutions, investment and insurance businesses and collective investment schemes.

The signing ceremony – just a day after the European Council released emergency funds to Ireland and its government unveiled a swinging €6bn emergency Budget – followed a seminar hosted by the visitors entitled "Ireland – the financial services gateway to Europe".

In a statement, the Central Bank of Bahrain said it offered the Irish delegation its expertise in the field of Islamic finance.

It said: "This event aimed to identify investment opportunities in the Republic of Ireland and exchange Bahrain’s experiences and knowledge in the fields of Islamic finance and financial services in general."

The memorandum was signed by Elderfield and Abdul Rahman Al Baker, executive director for financial institutions supervision at the CBB.

Al Baker said: "We look forward to working with the Central Bank Of Ireland in order to further enhance the cooperation in the field of financial services.
"This MOU represents the mutual understanding which will surely initiate further opportunities between the two countries."

Bruton is chairman of Ireland’s International Financial Services Centre.


Islamic finance courses and postgraduate qualifications booming in the UK and Europe

The Guardian: Islamic finance courses and postgraduate qualifications booming in the UK and Europe

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With global finance on its knees, this summer’s business graduates face an even trickier jobs market than most. But there is one area of banking still experiencing boom time – Islamic finance – and universities have been quick to grasp its possibilities.

This September will see new courses and postgraduate qualifications in Islamic finance springing up throughout the UK and elsewhere in Europe, reflecting the fact that it has become one of the fastest-growing sectors of the global banking industry, expanding by between 15% and 20% a year. Assets held by institutions adhering to Islamic finance principles now amount to nearly 1 trillion dollars.

In the UK, interest in the sector also reflects the government’s commitment to promoting Britain as an Islamic finance centre. The UK already leads Europe in the number of Islamic finance training courses it offers, from entry to postgraduate level, and in 2006 saw the launch of the Islamic Finance Qualification, a joint initiative between a Lebanese business school and the Securities and Investment Institute.

London gateway

Last December, the Treasury published a paper setting out the government’s aim for London to be "Europe’s gateway to international Islamic finance". This acknowledged that the industry was still young and therefore not yet experiencing skills shortages, but predicted that it soon would be. It stated: "The pool of potential applicants in the UK will have to keep up with the rapid growth of the market."

Universities have responded enthusiastically. Newcastle University is offering an MSc in finance and law with Islamic finance from next academic year. Henley Business School at the University of Reading has been offering an MSc in investment banking and Islamic finance since last year, with students spending the second part of the year in Kuala Lumpur. The University of Bangor in Wales has also been running its Islamic finance MA and MSc for a year and is considering introducing a new MBA in the subject, while the first students to take an Islamic finance option as part of an executive MBA offered in Dubai by Cass Business School will graduate this summer. Durham, which has been offering postgraduate research degrees in Islamic finance for some time, is now introducing a taught MA and MSc (the MSc is more quantitative), to respond to demand. Elsewhere in Europe, Reims Management School is offering a new specialist course in Islamic banking and finance for students on its masters in management programme, taught in English.

Student demand is driving the subject as much as any urging from governments. According to Rodney Wilson, founder and director of the Islamic finance programme at Durham, it is coming mainly from south-east Asia, particularly Malaysia, and the Middle East, although there is plenty of interest from the UK as well.

Joanna Gray, professor of financial regulation at Newcastle Law School, says she is keen that their new degree course is not just seen as something for Muslims. "It’s for anyone interested in a fast-developing industry that in the UK has been quite busy in the past few years to accommodate forms of investment in finance that are sharia-compliant."

Sharia principles

Islamic finance really dates from the mid-1970s, with attempts to make products available through conventional banking, such as loans and mortgages, compatible with sharia principles. Sharia law prohibits any transaction that involves paying interest or investing in certain economic sectors such as gambling or pornography. It demands that both the investor and recipient of the investment must share any risk, and transactions have to be underpinned by tangible assets.

In the years immediately after 9/11, anything involving money and Muslims was viewed with suspicion by many in the west because of fears about terrorism, and Islamic finance is still taking off faster in the UK and France than in the US. But in the current global financial climate the principles it is based on have struck a chord.

"There is an extent to which, to a westerner, Islamic finance products look very similar to ethical finance products," says Stefan Szymanski, professor of economics at Cass. "There is a demand for morally upright investment vehicles, and Islamic finance is the Islamic version of that."

Philip Molyneux, head of the business school at Bangor, suggests that even if western banks do not want to introduce specific Islamic finance products – and an increasing number do – they still want to know how it is that many Islamic institutions escaped the worst effects of the credit crunch.

He has been surprised that demand for the MA and MSc has come not just from recent graduates and bankers wanting to improve their career prospects, but also from sharia scholars, who play a key role in Islamic finance. Any new financial product must be passed by them as sharia-compliant, so many financial institutions must now have scholars standing by ready to give their verdict. These scholars often disagree, and can even change their minds, but this offers plenty of scope for the kind of intellectual arguments that universities relish, not to mention graduate jobs.

On the whole, most of the new Islamic finance courses steer well clear of religious issues in favour of legal and financial questions because these are what most interest students. Khalid El Sheik applied for Bangor’s Islamic finance MA because, having taken a first degree in computer science in Sudan before switching to a career in marketing, he felt his CV needed a business boost. He saw it as a chance to mark himself out from other students and to have a headstart in an area that was likely to offer plenty of future employment opportunities. "I had read about Islamic banking and how it was going to increase in future, and how most of the banking sector is now looking to it," he says. His fellow students at the university, including one from China, had the same idea, he says.

Szymanski agrees that it is the idea of the moment in many universities, and while Cass is still waiting to see how the market develops before introducing any similar courses, it is certainly considering the possibility.

"You just have to measure how many billions of dollars Islamic finance already handles in a year," he says. "If that grows over the years, it will become a universal part of every business school."

2009 London Sukuk Summit

2009 London Sukuk Summit


Two influential regulators, Tan Sri Zarinah Anwar, Chairman of the Securities Commission of Malaysia, the securities regulator, and Dr Mohammed Al-Jasser, Governor of the Saudi Arabian Monetary AgencySaudi Arabian Monetary Agency (SAMASAMA), the central bank, have won this year’s premier honour at the 2009 London Sukuk Summit Islamic Finance Awards which was held at a Gala Dinner on the evening of 2nd July 2009 at the Radisson Hotel in London. The awards formed part of the 2009 London Sukuk Summit which was held at the same hotel on 2nd-3rd July 2009.

Chairman Tan Sri Zarinah won the ‘Outstanding Contribution to the Development of Islamic Capital Markets’ Award while Governor Al-Jasser won the ‘Outstanding Contribution by a Regulator to Islamic Financial Services’ Award at a ceremony organized by London based ICG-Events.

The Awards recognizes the achievements, progress and effort by individuals and institutions in the Islamic finance space. This year there were 24 Award categories.

Tan Sri Zarinah Anwar, who took over the helm at the Securities Commission in 2006, is recognized for her vital role in expanding the role and depth of the Malaysian Islamic capital markets and promoting Islamic capital markets in regional and international bodies such as International Organisation for Securities Commissions (IOSCO). She is a strong advocate of the connectivity in global Islamic finance, and is active in promoting cross-border Islamic capital market activity.

Under her leadership, the Securities Commission, for instance, entered into a milestone agreement with the Dubai Financial Services AuthorityDubai Financial Services Authority (DFSADFSA) for the cross-border marketing of Islamic funds. Similarly, Chairman Tan Sri Zarinah introduced the pioneering Islamic Markets Programme (IMP), which entered its fourth year this year and which aims at guiding, helping and educating emerging country regulators in the field of Islamic capital markets regulation. This annual event is also part of the many initiatives undertaken by the Securities Commission to develop the talent pool for the Islamic capital market (both within and outside Malaysia), as well as promoting knowledge-sharing on the Islamic capital market.

Governor Al-Jasser, who took over in March this year, has made a rapid impact on the Islamic finance market and is an outspoken supporter of developing a world-class Islamic finance system especially in the wake of the near-collapsed financial system in the West which has been experiencing a major crisis and credit crunch. The appointment of Dr Al-Jasser has raised expectations of a greater Saudi leadership role in regional and global Islamic finance. Another prominent figure that was honoured is Dr Ahmad Mohammad Ali, President of the Jeddah-based Islamic Development BankIslamic Development Bank (IDB)(IDB), who was recognized for his ‘Outstanding Leadership in Islamic Finance’. Dr Ali has been at the helm of the IDB for almost 30 years, save a few months when he became Secretary-General of Rabita, the World Muslim League, which is based in Makkah.

Under his watch, the IDB has become an important multilateral development bank of the Muslim world, and has fostered the development of member country economies and promoted policies aimed at poverty alleviation, private sector development, the promotion of Islamic finance globally, and promoting intra-Islamic trade and investment. Currently intra-Islamic trade stands at almost 14 per cent of the total trade of the 57 Muslim countries.

Other Saudi winners recognized included The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the IDB GroupIDB Group, for the ‘Most Innovative Islamic Financing Transaction’ for the Djibouti Container Terminal Financing.

The IDB also won the ‘Most Innovative Sukuk Structure/Deal’ Award for its RM1billion Medium Term Notes facility issued in for Malaysia. Ayman Sejiny, CEO of Unicorn BankUnicorn Bank in Saudi Arabia, whose major shareholder is Dar Al-Arkan Real Estate Development Company (DAAR)Dar Al-Arkan Real Estate Development Company (DAAR), was named ‘Islamic Banker of the Year’.

DAARDAAR itself was recognized for the ‘Best Sukuk Structure by a Private Corporate Issuer’ for its recent SR750m Sukuk. Similarly, National Commercial bank of Saudi Arabia won the ‘Outstanding Contribution to the Development of Global Islamic Finance’ Award, while Siraj CapitalSiraj Capital whose major shareholder is the Al-Sulaiman Family of Saudi Arabia was named the ‘Best Islamic Wealth Management Service Provider’.

Kuwait Finance HouseKuwait Finance House, one of the largest Islamic banks in the world, won the ‘Most Innovative Islamic Bank’ Award.

This year’s ‘Zaki Badawi Award for Excellence in Shariah Advisory’ given in honour of the Late Dr Zaki Badawi, the prominent Azharite Shariah Scholar, was awarded to Dr Daud Bakar of Malaysia. The award recognizes the outstanding and impressive contribution Dr Bakar has made to the development of Fiqh Al-Muamalat not only in his native Malaysia but elsewhere in the region, the Middle East and beyond.

This year also saw two awards for the next generation of Islamic bankers. The ‘Zaki Badawi Award for Outstanding Young Shariah Advisory’ was awarded to Mufti Muhammad Nurullah Shikder, Shariah Adviser to Gatehouse Bank plc, the latest Islamic investment bank to be authorized by the United Kingdom’ Financial Services Authority (FSA). Similarly, Nazmi Camalxaman, UK Manager of CIMB Islamic Bank, won the ‘Young Islamic Banker of the Year’ Award.

Full List of the 2009 London Sukuk Summit – Islamic Finance Awards Recipients

1. Outstanding Contribution to the Development of Islamic Capital Markets
Tan Sri Zarinah Anwar, Chairman, Securities Commission of Malaysia

2. Outstanding Leadership in Islamic Finance
Dr Ahmad Mohammad Ali, President, Islamic Development BankIslamic Development Bank (IDB, Saudi Arabia)

3. Outstanding Contribution to Islamic Finance in the UK
Neil D. Miller, Partner, Norton Rose, United Kingdom

4. Most Innovative Islamic Financing Transaction
Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) for the Djibouti Container Terminal Financing, Saudi Arabia

5. Most Innovative Sukuk Structure/Deal
Islamic Development BankIslamic Development Bank (IDB)(IDB) for the RM1billion Medium Term Notes for Malaysia, Saudi Arabia

6. Best Administrator/Trustee/Bookrunner
CIMB Islamic Bank, Malaysia

7. Best Arranger(s) of a Sukuk Structure
Gatehouse Bank for the Milestone Capital Sukuk Programme, United Kingdom

8. Zaki Badawi Award for Excellence in Shariah Advisory
Dr. Daud Bakar, Malaysia

9. Zaki Badawi Award for Outstanding Young Shariah Advisory
Mufti Muhammad Nurullah Shikder, United Kingdom

10. Best International Islamic Finance Centre
Malaysia Islamic Financial Centre (MIFC)

11. Outstanding Contribution by a Law Firm to Islamic Financial Services
Norton Rose, United Kingdom

12. Islamic Banker of the Year
Ayman Sejiny, CEO, Unicorn BankUnicorn Bank, Saudi Arabia

13. Young Islamic Banker of the Year
Nazmi Camalxaman, CIMB Islamic Bank, Malaysia

14. Outstanding Contribution by a Regulator to Islamic Financial Services
Mohammad Al-Jasser, Governor, Saudi Arabian Monetary AgencySaudi Arabian Monetary Agency (SAMASAMA)

15. Most Innovative Islamic Real Estate Financing Transaction
Ali Al-Ghannam, Kuwait Finance HouseKuwait Finance House, for the Multi-Million Dollar Iskandar City Development Project, Kuwait

16. Best New Entrant in the Sukuk Market
Emirates ND, Dubai

17. Most Innovative Islamic Bank
Kuwait Finance HouseKuwait Finance House (KFH)

18. Best Sukuk Structure by a Private Corporate Issuer
Dar Al-ArkanDar Al-Arkan for the SAR 750 million Sukuk, Saudi Arabia

19. Outstanding Institutional Contribution to the Islamic Finance Sector
Lembaga Tabung Haji, Malaysia

20. Outstanding Contribution in CSR by Institution Offering Islamic Financial Services
Oasis Group Holdings of South Africa for the Restoration of the Islamic Library in Timbuktu

21. Outstanding Contribution to the Development of Global Islamic Finance
National Commercial BankNational Commercial Bank of Saudi Arabia

22. Best Islamic Wealth Management Service Provider
Siraj CapitalSiraj Capital, Saudi Arabia

23. Outstanding Contribution by an Accounting & Auditing Firm to Islamic Financial Services
KPMG, United Kingdom

24. Best Sovereign/Quasi-Sovereign Sukuk Issuance
Monetary Authority of Singapore for the Reverse Enquiry Sukuk Facility

Islamic Bank of Britain launches premier banking services in London

Islamic Bank of Britain launches premier banking services in London


Islamic Bank of Britain (IBB) has announced the launch of its premier banking service and the opening of its premier banking office in Berkeley Square, London aimed at catering to customers from the Middle East.

The service has been designed to provide a high quality, personal banking service coupled with competitive long term savings options and Sharia’a compliant property finance to customers.

Driven by low property prices and the current favourable US Dollar/Sterling exchange rate, the UK is attracting a large number of customers coming from the Middle East and GCC countries looking to purchase a property, said Sultan Choudhury, commercial director at IBB.

The bank’s premier banking service has been set up to respond to this demand, he pointed out.

IBB, Sultan said, was increasingly becoming a more attractive option for overseas investors, particularly in the GCC and Middle East countries, as it is a more stable alternative to conventional banks.

"The bank provides its premier customers a personal service along with Halal products, including the competitive Home Purchase Plan which is the Sharia’a compliant finance option for property purchases in the UK," he explained.

The customer must have a minimum annual net income of £100,000 ($159,782) to apply for IBB premier banking service available to customers in the UK and overseas, Sultan said.

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