Islamic Bank of Britain

Infobox Company
company_name = Islamic Bank of Britain
company_
company_type = Public (LSE|IBB)
company_slogan =
foundation = 2004
location = flagicon|UK Birmingham, UK
key_people = Mohsen Moustafa, Chairman Gerry Deegan, Managing Director
Sultan Choudhury, Commericial Director
industry = Finance and Insurance
products = Banking
revenue = loss GBP£8.83 million (2006)
net_income = profit GBP£2.85 million (2006)
homepage = [http://www.islamic-bank.com 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. [cite web |title=First Islamic bank to open in UK
publisher=BBC |date=2004-08-09 |url=http://news.bbc.co.uk/1/hi/business/3547374.stm |format=html |accessdate=2007-09-21 ] , although non-Muslims are also allowed to hold accounts.

The bank states that it runs on four values: [cite web |title=Ethical UK bank |publisher=Islamic Bank of Britain |url=http://www.islamic-bank.com/islamicbanklive/VisionAndValues/1/Home/1/Home.jsp |format=html |accessdate=2007-09-22 ] 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) prayersFact|date=September 2007. The bank also has a Sharia Supervisory Committee to ensure that its products are compliant with Islamic teachings. [ Ethical UK Bank, IBB ]

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. [cite web |title=IBB Annual Report 2006 |publisher=Islamic Bank of Britain |date=2006-12-31 |url=http://www.islamic-bank.com/imagesupload/IBBAnnualReport2006.pdf |format=pdf |accessdate=2007-09-21 ]

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.

Potential investors were invited, mainly from the 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 [cite web |title=Regulation and Islamic finance
publisher=FSA |date=2006-06-13 |url=http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2006/0613_cm.shtml |format=html |accessdate=2007-09-22 ] , and subsequently led to the Islamic Bank of Britain available to the public.

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.

External links

* [http://www.islamic-bank.com www.islamic-bank.com] - Islamic Bank of Britain
* [http://news.bbc.co.uk/1/hi/business/3548656.stm Q & A Islamic Finance(BBC)] -

References