| Islamic Banking shows growing global trends |
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In a growing trend UK, Canada, and Kenya to accept licenses for Islamic Banking practices. The UK regulator the Financial Services Authority (FSA) started the trend by authorizing the Islamic Bank of Britain in August 2004. The Central Bank of Kenya and the Central Bank of Canada have visited the FSA to adopt the UK model for enabling investors to start Islamic banking practices in their own countries. The Islamic Bank of Britain has started a sister bank the European Islamic Investment Bank (EIIIB), along with the Bahrain-based Islamic Joint Venture Partnerships (IJVP) BSC and has approached the FSA for a license. EIIB incorporated in Jan11, 2005 to become Europe’s first Islamic investment bank.
Authorities from the Canadian and Kenyan central banks visited the FSA and met with representatives of the local banks who have taken the steps of staring Islamic banking operations like the Islamic Bank of Britain (IBB), ABC International Banks, Lloyds TSB and HSBC Amanah. These two central banks will also issue licenses in their countries for stand alone Islamic banks. Both the banks will then approach the market through private placements to raise further equity funding.
The Birmingham headquartered Islamic Bank of Britain (IBB), has started operations with three branches and over 6,500 accounts. According to the IBB managing director Michael Hanlon the first branch was opened in London and the first customer was a non-Muslim. The two other branches are in Birmingham and Lester.UK has around 1.8 million Muslims while there are 12 to 13 million in the whole of Western Europe like France, Germany, Belgium and Holland. A large number of Muslims regularly travelling to these countries are seeking Sharjah-compliant banking facilities. IBB is planning to target a customer base of half a million in five years.
Canada is an attractive destination with a large and diverse population of professional Muslim immigrants coming from Pakistan, Croatia, Bosnia, South Africa, Egypt, Palestine and other Muslim nations. This community also has above average income levels and is prosperous.
The first Islamic Bank IBB shareholders our eminent individuals and groups like the Emir of Qatar, the Qatar International Islamic Bank, UK’s Dawnay Day Global investments and South African investment firm DCD London& Mutual PLC. Its sister offering the EIIB intends to submit an application for authorization to the FSA by the end of May. EIIB plans to offer Islamic treasury; capital markets; asset management; trade finance; correspondent banking and private banking products and services. Mr Abdul Rahman Abdulmalik is the chairman of IBB and his brother Adnan Yousif, the current chairman of the AlBaraka Banking Group based in Bahrain is the chairman of the EIIB. He is the former chairman of the ABC Islamic Bank.
The market response has been very good to EIIB‘s maiden offering to increase its equity from 50 million UK to 110 million UK pounds through a private placement. Lloyds TSB, which recently launched its two debut Islamic consumer finance products — a current account and an Islamic mortgage.
According to Yousif, there is a strong demand from potential shareholders. He expressed delight at the very high demand for its products and services, and the board of directors have authorized increase in equity to meet the high demand. EIIB has expressed a desire to approach the FS to increase its equity capital further to 300 million UK pounds after starting operations. These additional funds it plans to raise through a public offer in the UK and a simultaneous private placement in the Arab countries and in Asia.
Posted
on : Tue, 26 Apr 2005 00:00 GMT | Banking News
By : Anne Philips
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