| June 24
June 24 Islamic Bank of Britain (IBB), the
country's only sharia-compliant retail lender, plans to broaden
its product range to win business both locally and across
Europe, aided by the backing of its new Qatari shareholder.
IBB is developing its commercial property business to widen
fee-based income as it aims to post a profit for the first time,
newly-appointed chief executive Sultan Choudhury told Reuters.
"The acquisition was a watershed moment for us, what it
means is that we will be adjusting the direction of IBB. We will
shift to a much stronger focus on commercial banking," said
Choudhury, who previously served as interim managing director.
The lender was acquired in January by Masraf Al Rayan
, Qatar's largest Islamic bank by market value, which
in February injected 75.8 million pounds ($129 million) into IBB
to support its expansion plans.
Birmingham-based IBB has around 50,000 customers and 380
million pounds worth of retail deposits, but it has struggled to
turn a profit since its inception in 2004.
That could soon change as its property finance business has
doubled in size in the last year, which could allow IBB to
expand later into Europe, said Choudhury, adding its retail
operations would remain focused in the UK.
"Clearly that is the objective (to break even) no only in
the medium term but also in the short term, and we are on course
to do that."
IBB also aims to buy some of the 200 million pounds of sukuk
that the British government will issue this week, a much needed
sterling-denominated liquidity tool for the bank.
Choudhury said he hoped demand would be such that the
government would consider a future issuance, which could be
facilitated through the use of a different sukuk structure.
Britain's maiden sukuk will use an ijara structure, a
sharia-compliant sale and lease-back contract, allowing the
rental income of three central government offices to underpin
But a structure known as wakala, or agency agreement, could
side-step the need to find unencumbered government assets,
instead securitising cash flows from roads or bridges, he said.
($1 = 0.5880 british pounds)
(Editing by Kim Coghill)