LONDON Sharia-compliant Bank of London and the Middle East (BLME) is targeting the thousands of rich Gulf residents who spend part of the year in London, to boost its private banking arm, its head told Reuters.
Britain's largest stand-alone sharia bank aims for deposits in the wealth management unit -- launched a year ago -- to make up 20-25 percent of its total, from 5-10 percent currently, Chief Executive Humphrey Percy said on Tuesday.
"This is what we are targeting and it will take three to five years to achieve that," he told the Reuters Islamic Banking and Finance Summit in London.
The bank does not disclose how much it holds in client assets. It is targeting clients with a net worth more than 1 million pounds ($1.57 million), who can commit at least 250,000 pounds.
Percy also said the bank is about to launch an Internet banking service aimed at less wealthy clients who can deposit around 50,000 pounds or more, targeting deposits of 50 million pounds within a year.
The bank, which fully complies with Islamic principles, was founded in 2006 with the backing of Kuwaiti investors, including Boubyan Bank (BOUK.KW).
Percy also said the BLME is planning to launch two new funds in the next six months, a leasing fund and a trade finance fund as part of an ongoing business expansion.
The former will offer investors access to leased assets such as equipment, trucks, railway carriages and aeroplanes. The latter will invest in short-term revolving finance facilities, which allow a borrower to draw down and repay amounts for short periods throughout the life of the facility.
The bank was "getting closer to a listing" in London, Percy said, but it was not looking to raise money from the exercise.
The bank is hoping the British government will issue a sukuk, or Islamic bond, in a range of maturities. That would create a yield curve in the paper, enabling sharia-compliant banks to price their own sukuk.
The Conservative Party, which is leading the polls ahead of national elections due later this year, has shown interest in the project, Percy said.
Last year the British government said in its annual budget it would change the tax regime to remove fiscal penalties and encourage companies willing to use Islamic financial structures, but shelved plans to issue a sovereign one.
(Additional reporting by Claire Milhench; Editing by Rupert Winchester)