Nov 30 Al Rayan Bank is expanding its product
range and adding an office in Scotland, its top executive said,
after a year of strong growth for Britain's only Islamic retail
lender despite uncertainty stemming from Brexit.
Islamic retail banking is still a rarity in the West, but
the experience of Al Rayan could encourage other Islamic banks
to explore markets outside the Middle East and Southeast Asia.
Birmingham-based Al Rayan, formerly the Islamic Bank of
Britain, is growing beyond its traditional client base and now
estimates around a third of its customers are non-Muslims.
While the potential for regional expansion has been dimmed
after Britain's vote to leave the European Union, Al Rayan has
seen its balance sheet grow by around 40 percent this year, said
Chief Executive Sultan Choudhury.
Its retail business has grown by 24 percent over the past 12
months, with both deposits and real estate finance assets
surpassing 1 billion pounds ($1.25 billion) this year, Choudhury
said in an interview.
The bank was launched in 2004 with a retail focus, but an
acquisition by Qatar's Masraf Al Rayan in 2014 saw a
capital injection of 100 million pounds that helped expand its
Over the past 18 months Al Rayan has branched out into
commercial real estate and private banking, and it plans to
offer products targeting SMEs, Choudhury said.
"As part of those developments, we will look at new products
and expand in existing markets as well."
Brexit could have a silver lining for the bank as well. The
EU's consumer credit directive does not make allowances for
sharia-compliant products, which has left mainland Europe out of
reach for most Islamic retail banking efforts.
"More autonomy, due to Brexit, will accelerate the pace of
Islamic financial products in the UK."
Britain has actively encouraged Islamic finance, including
through a sovereign Islamic bond issued in 2014.
A devaluation of the pound and a flattening of London
property prices due to Brexit have also led to increased demand
for some products catering to expatriates, he added.
Al Rayan will offer buy-to-let mortgages through its Glasgow
office, adding to government efforts to build an ethical
financial hub in Scotland.
($1 = 0.8069 pounds)
(Editing by Subhranshu Sahu)