First Islamic Investment Bank in UK gears up

THE FIRST Islamic investment bank in Britain is preparing to open its doors next year with the aim of listing in a US$555 million floatation.

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By  Richard Agnew Published  September 11, 2005

The European Islamic Investment Bank said last week that it had applied to the UK’s Financial Services Authority for authorisation to trade in the country next year. The bank is preparing to offer a range of Sharia-compliant products to the Muslim community — including 900 bonds, investment management, trade finance and correspondent banking and private banking. John Weguelin, a veteran of Bank of America, is managing director of the bank. The bank plans to be open for business in the UK at the beginning of next year, he said. The opening would boost the market for Islamic banking products, he said. The bank’s planned arrival in the UK comes shortly after the launch of the Islamic Bank of Britain (IBB), a retail bank that offers products to Britain’s two million Muslims. Weguelin said that to comply with Shari’a, which forbids the giving or taking of interest, assets such as property or commodities had to be used to back banking products. “We are considering ways of developing products. Tin, for example, is one common asset used to back Islamic products.” He added that grain could be also be used as an asset. He said that the bank wanted to become a major participant in the Islamic treasury, securities and investment products market — which is rapidly growing in the Middle East and Asia. The bank is backed by a group of Middle-East bankers including Adnan Ahmed Yousif, the chairman. He was chief executive of the Bahrain Islamic Bank from 2002 to 2004. Weguelin said that all the bank’s directors were also shareholders. He added that 85% of investors were from the Middle East, with the remainder from the West.

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