Islamic Finance

Scotland Hosts Ethical Finance Summit

Earlier this month, Scotland hosted the Ethical Finance Summit organised by the Global
Ethical Finance Initiative (GEFI) which organises and coordinates a series of
programmes promoting finance for positive change and bringing together leaders in
Islamic and conventional finance from around the world.

The summit aimed to “help define and shape the transition to a sustainable financial
system where finance delivers positive change”. With the Bank of England recognising
climate change as a key financial risk and growing recognition of sustainable investment
and finance, both conventional and Islamic finance practitioners have started to pay
attention to not only the economic returns but the social impact of their investment and
finance decisions.

Key partners of the summit included the United Nations Development Programme
(UNDP), the Scottish Government and the Bank of Scotland. Hosted in the capital of
Scotland, Edinburgh, the summit attracted over 400 finance practitioners from across
the globe discussing a range of topics including ethical investing, Islamic finance,
impact and sustainable finance.

Keynote speaker at the event, First Minister of Scotland, Nicola Sturgeon, who took the
summit as an opportunity to introduce the ‘Green Investment Portfolio’, a new
investment programme, estimated to be worth £3 billion over a three-year period
providing capital to local authorities and third sector organisation committed developing
projects to help the country achieve a net-zero economy by 2045.

The First Minister stating, “The Green Investment Portfolio supports our ethical finance
ambitions by matching projects which are reducing emissions with investors so we can
fully maximize their potential and promote them globally.

This could include projects that are making buildings more energy efficient, reducing
industrial emissions or even restoring peatlands.”

Scotland’s ambitious Green Investment Portfolio is aligned with the UK’s commitment
to reducing greenhouse gas emissions and it was only May of this year the UK
parliament declared a climate change emergency.’ Expect green investment strategies
including green bonds and sukuk to get more attention in the coming months.

Islamic Fintech Startups in UK

The Islamic Finance Industry holds much promise, with assets expected to reach $3.9 trillion by 2023 according to Thomson Reuters, however, Islamic Fintech is at the very beginning of an exciting, transformative journey for the industry, one still dominated by largely domestic and OIC-based financial institutions. A young, digitally native Muslim demographic that is on average younger than the worlds non-Muslim population, is driving the growth of Islamic Finance.

The large established financial institutions are embracing the change, with 74% of financial institutions investing in data analytics, 34% in Industrial Revolution – Wikipedia (AI), and with 77% expecting to adopt blockchain by 2020.


DinarStandard – Growth Strategy Research & Advisory

The UK has new Master’s programs in Islamic finance

QIB-UK, a wholly-owned subsidiary of the Qatar Islamic Bank Group, has won the ‘Best Islamic Bank United Kingdom’ award from The Banker Magazine. This is QIB-UK’s fi rst award of that kind aft er a strong fi nancial performance for the year ending 2018.

The bank saw its net profit aft er tax increased by 111% year-on-year. Financing activities grew by 21% from the previous year with total income also growing by 21% year-on-year. The QIB banking group’s total assets stand at QAR155.3 billion (US$42.31 billion), driven by a continued growth in the core financing and investing activities, enabling it to support the development of its subsidiaries in the UK and other regions.

During the first three months ending the 31st March 2019, the group’s net profi t was QAR685 million (US$186.61 million), increasing by almost 10% over the same period from last year. Dundee’s Al-Maktoum College of Higher Education, based in Scotland, will be offering three Master’s degree programs in Islamic finance.

Starting in September 2019, students will have the opportunity to earn Master of Science degrees in Islamic finance; Islamic banking and finance; and Islamic banking, finance and international business. The degree programs are provided in collaboration with the University of Dundee and designed for students who have completed an undergraduate degree and are now looking to specialize.

They provide access to students to participate in the growth of the UK Islamic finance sector and help bridge the skills gap in the industry.

This article was originally published in the Islamic Finance News (IFN) Volume 16 Issue 24 dated the 19th June 2019

Relaunch of UK Islamic Fintech Panel; Al Rayan partners with the broker

Ahead of the UK Fintech Week, the independent group of Islamic finance and fintech practitioners has reconvened under the UK Islamic FinTech Panel (the Panel) chaired by Harris Irfan.

The Panel, formed last year, aims to promote the UK Islamic fintech sector and bring together thought leaders to support the development of the sector. In 2019, the Panel aims to build on the work in the previous year with a greater focus on connecting entrepreneurs with the government, and building international connections.

The achievements of the Panel to date include providing networking opportunities for the UK Islamic fintech community, involvement with the UK government and creating international connections. The panel aims to continue building momentum for the Islamic fintech sector by leveraging London’s leading position as a global fintech hub and a center for Islamic finance in the western hemisphere.

Al Rayan Bank announced a partnership with Alexander Hall, one of the UK’s largest mortgage brokers. Alexander Hall is the sister company of Foxtons Estate Agents and has been added to Al Rayan’s panel of mortgage brokers helping Al Rayan increase awareness of its home finance products. Alexander Hall as an intermediary firm will refer domestic Islamic home finance enquiries within the UK, as well as handle enquiries from expats in GCC countries who wish to invest in UK property from overseas.

This article was first published in Islamic Finance news Volume 16 Issue 20 dated the 22nd May 2019.

Suhail Ahmad is a partner at Gateway Islamic Advisory. He can be contacted at [email protected].

Qatar to establish global finance center in UK university

Several bilateral agreements were signed between Qatar and the UK recently with the most notable being the agreement by the Qatar Central Bank to establish the Qatar Centre for Global Banking & Finance within the King’s Business School at King’s College London.

A membership agreement was signed between the Qatar Development Bank (QDB) and Innovate Finance’s international hub to support the development of the fintech ecosystem in Qatar, as well as an agreement on the approval of the QDB’s membership to the Financial Conduct Authority’s Global Financial Innovation Network to promote Islamic finance and fintech.

The signing ceremonies were held on Qatar Day, hosted by the UK’s Department for International Trade in partnership with the City of London Corporation at the prestigious Mansion House in London on the 26th April. The event aimed at strengthening trade and investment ties between the two countries and supporting Qatar’s development of its financial services sector.

The agreements highlighted the mutual opportunities for businesses across banking, Islamic finance and fintech for UK and Qatari companies. Senior business executives of the two countries and representatives of the two governments shared reports highlighting the UK’s and Qatar’s promising mutual investment opportunities .

Qatar is one of the largest investors in the UK with more than GBP35 billion (US$45.7 billion) invested in the UK economy, and that figure is expected to continue rising. The event marks the UK’s commitment to supporting Qatar’s need to diversify its economy as part of the country’s National Vision 2030 and increasing cooperation between the UK and the Gulf State’s financial services sector.

Suhail Ahmad is a partner at Gateway Islamic Advisory. He can be contacted at [email protected].

This article was first published in Islamic Finance news Volume 16 Issue 18 dated the 8th May 2019.

Multiple awards and new chairman of Al-Rayan

At the beginning of February, Al Rayan Bank announced the appointment of Simon Moore as the Chairman of its board of directors.Moore replaces Robert Sharpe who is stepping out after four years of chairman’s role. Also serving as the chairman of Cambridge & Counties Bank , Moore was a member of the management board of the Confederation of British Industry from 2013 until 2016 and its director responsible for London & south of England.

Soon after the announcement of new chairman, Al Rayan was the recipient ‘Best Islamic Bank in the UK for 2018 in the deals of the year awards by Islamic Finance News (IFN)’. In addition to ‘Best Islamic Bank in the UK’, the bank also scooped up ‘Sukuk Deal of the Year’ award for the issuance of of its first public Sukuk in a non-Muslim country (the UK) last year and the ‘UK deal of the year’ award. Al Rayan has also been shortlisted for the ‘IFN deal of the year’ which will be announced in March 2019.

The Islamic Finance Council UK became the first advisory body in the Islamic finance space to endorse the United Nations Environment Finance Initiative’s Principle’s for Responsible Banking (PRBs) and join 64 other International banks and stakeholders who already signed up to the PRBs. The PRBs are the first Global framework to enable banks to integrate sustainability across their operations and enhance their positive impact within the regions they operate in, and already include representations from Islamic countries with the Arab African International Bank (Egypt), Commercial International Bank (Egypt), CIMB Bank (Malaysia) and Garanti Bank (Turkey) being the founding signatories of the PRBs.

Suhail Ahmad is the partner at the Gateway Islamic Advisory. He can be contacted at [email protected]

This article was first published in Islamic Finance news Volume 16 Issue 9 dated the 6th March 2019.

Record Year for UK’s Islamic Finance

The UK’s Islamic finance sector continued to grow in 2018 despite the economic uncertainty posed by the lack of a trade deal with the European Union in the aftermath of Brexit vote.

The country witnessed its largest ever corporate Sukuk issuance and the launch of several new initiatives such as the Islamic Fintech Panel and the iE5 Islamic economy accelerator which encourage the growth and success of start-ups such as Insure Halal which in 2018 launched the country’s first Takaful product for building and contents home insurance. Additionally, the industry is supported by improving local demand for Islamic banking and government-supported initiatives such as a Shariah-compliant liquidity tool for UK Islamic financial institutions.  

Review of 2018

The highlight of the year was the record-breaking corporate Sukuk issuance by the country’s largest Islamic bank, Al-Rayan Bank which successfully raised GBP250 million (US$319.45 million) via a residential mortgage-backed securitization Sukuk. 

The Sukuk would help fund the bank’s ongoing efforts to expand into commercial real estate, private banking and small business financing. Rating agency Moody’s assigned an ‘AAA’ rating to the Sukuk which would consist of a portfolio of first lien Home Purchase Plans secured by residential properties.

Islamic fintechs continued to grow with Yielders, the first FCA registered Islamic crowd investing platform completed a pre-Series A investment round as it plans to expand in selective European markets. Fintech IslamicBanker rebranded to with an expanded offering of Islamic finance and training solutions to broader range Islamic economy.

Startup Ummah Finance also rebranded to MoneeMint from Ummah Finance repositioning itself as an ‘ethical’ digital banking and announced an undisclosed amount of funding from a strategic investor enabling it to launch in early 2019.

In addition to the launch of the Islamic Fintech Panel, an Islamic economy accelerator, iE5 was formed to support the growth of companies operating in the Islamic market either based in the UK or desiring a presence in the UK.

The accelerator is being supported by several prominent organizations and is committed to supporting early stage companies with access to multi-disciplinary professional services provided by partner firms at lower than market cost as well as work space, education and business development support.

Preview of 2019

Outlook for the sector remains strong as Brexit appears to be having little impact on dethroning the UK or London in particular as the western centre for Islamic finance. We can expect more activity in the UK Sukuk market which on the heels of the Al-Rayan corporate issuance will be able to attract more capital.

This was highlighted by the statement of Dr Bandar M H Hajjar, the president of the IDB at the London Sukuk Summit: “We have a real opportunity to recognize the potential of Islamic finance here in the UK. Both the UK government and the IDB are actively promoting this objective.” Considering Jeddah-based IDB has capital of US$33 billion, it could definitely help support Islamic project funding in the UK.

The Takaful sector in the UK is also expected to get a much-needed boost in 2019 as the Islamic Insurance Association of London (IIAL) is seeking Shariah scholars approval for London’s standards for the transaction of Islamic commercial insurance to be rolled out coinciding with the UK’s departure from the EU on the 29th March. IIAL which counts Lloyd’s of London as a founding member is seeking both legal and Shariah advice on the standards framework it has developed with London market associations.

The Bank of England’s (BoE) plans for the launch of a Shariah-compliant facility to support the UK’s Islamic finance sector under a new BoE subsidiary named the ‘Alternative Liquidity Facility’ will offer a non-interest-based source of liquidity. This will be the first such facility offered by a major western central bank and improve access to capital for the UK’s Islamic financial institutions.


The resilience of Islamic finance will be tested over the coming year as Brexit is undoubtedly going to be disruptive to the UK economy. However, given the sector growing from strength to strength in 2018 and continued innovation and government support, Islamic finance in the UK is expected to survive Brexit without any significant slowdown. Additional Sukuk offerings, improved liquidity and potential digital bank offering will keep the UK Islamic finance sector an interesting marketplace for industry observers worldwide.

Download a PDF copy of this article

First published in the IFN Annual Guide 2019


The UK’s Islamic Mortgage market to heat up

Islamic home-buyers in the UK are set to have more options as the Islamic mortgage market becomes more competitive with Gatehouse Bank announcing new home purchase financing plans on the heels of a record GBP100 million (US$130.53 million) in lending completed last year. To support its growth plans, Gatehouse also announced expansion of its underwriting team with three new hires.

It’s not surprising to see Gatehouse and other new entrants begin to challenge the market leader, Al Rayan Bank, which had record profits in 2018 and a successful capital raise by way of a commercial Sukuk issuance of GB250 billion (US$326.23 billion) last year to meet market demand. As the market leader, Al Rayan may have more pricing power and has already this mouth reduced its rental rates on 80%, 70%, and 60% finance to value (FTV) home purchase plans by 50bps. Resulting in the 60% FTV discounted variable rental rate to be reduced to 3.14%, the fixed rental rate reduced to 3.44% , the 70% FTV fixed rental rate reduced to 3.54% and the 80% FTV fixed rental rate reduced to 3.74%.

The new year kicked off with the high-level city of London delegation to the UAE with Abdul Aziz Al Ghurair, the chairman of the UAE Banks Federation, welcoming the Lord Mayor of the City of London, Alderman Peter Estlin, along with senior government and business leaders to discuss the challenges facing the financial services and Islamic banking sectors. The UAE is the UK’s 12th-largest trading partner and the largest civil export partner in the region. The delegation and meeting aspired to improve collaboration between the two countries especially given the continued economic & Brexit uncertainties.

Suhail Ahmad is the partner at Gateway Islamic Advisory. He can be contacted at [email protected]

This article was first published in Islamic Finance news Volume 16 Issue 9 dated the 28 January 2019.

UK Islamic fintech in the spotlight

Islamic fintech in the UK was in the spotlight with several key funding announcements from MoneeMint and Wahed invest over the past month as well as the hosting of the UK-Turkey Islamic Fintech Forum by the British Consulate-General in Istanbul.

Start-up Moneemint, which aims to become “the UK and Europe’s first completely digital ethical bank” issued a press release announcing “strategic funding” from Ground One Ventures, a UK-based private investment firm. Neither the funding amount nor terms of funding were disclosed. Formerly known as Ummah Finance, co-founded by Hassan Waqar, MoneeMint plans to target the underserved bankable communities across UK and expects to launch a product in the first quarter of 2019.

Islamic investment platform, Wahed Invest, also announced an additional raise of £6 million to expand its global operations with its recent launch in the UK. Funding was provided by existing investors Boston-based Cue Ball Capital and BECO Capital, a Middle Eastern VC fund known for backing a variety of regional start-ups. This brings the young company’s total funding to nearly £12m since inception.

At the UK-Turkey Islamic Fintech forum, supported by the UK Foreign and Commonwealth Office Prosperity Fund, both countries discussed ways to remove barriers to economic growth and promote economic reform and fintech development in their countries. TheCityUK and Borsa Istanbul pledging to work together to find new opportunities for cooperation between the two countries and further solidity the ongoing partnership and continue promoting closer ties between the two countries.

Speakers at the event included Recep Bildik, director of business development at Borsa Istanbul, Nicholas Cannon, head of the economic & prosperity team at British Consulate Istanbul, and Harris Irfan, chairman of the UK Islamic Fintech Panel.

This article was first published in Islamic Finance news Volume 16 Issue 9 dated the 6th March 2019.

New liquidity facility for UK’s Islamic Finance sector

The Bank of England’s (BoE) Deputy Governor Dave Ramsden announced plans for the launch of a Shariah compliant facility to support UK’s Islamic finance sector under a new BoE subsidiary named the ‘Alternative Liquidity Facility’ established specifically for this purpose. The facility will offer non-interest-based source of liquidity and will be the first such facility offered by a major western central bank. “We have been progressing work to enable Islamic banks to hold Bank of England reserves to meet their regulatory requirements for holdings of high quality liquid assets in a way consistent with Islamic commercial jurisprudence,” stated Governor Ramsden in his speech announcing the plans. Although the proposal for the facility was published last year, the Governor’s announcement paved way for a clear timeline and will strengthen UK’s position as the leading Islamic finance hub in the western hemisphere.

In other news, Bank of London and The Middle East (BLME) an independent Sharia compliant bank based in London completed its first Sharia compliant transaction on the LiquidX Platform by acting as a funder to another participant within the LiquidX network. The LiquidX platform by BLME has executed over $13 billion of trade volume since 2016.and handles a range of transactions, including accounts receivables, supply chain finance, inventory finance, loans and insurance and is aiming to provide a viable platform to Islamic finance clients.

Additionally BLME also announced that it has reduced its Share Premium account by £40 million (US$52.8 million) with the resulting credit balance being transferred into retained earnings of the bank. This process was formally approved by the High Court of Justice in London and had no impact on the issued share capital of the bank’s parent company, BLME Holdings plc.

This article was first published in Islamic Finance news Volume 16 Issue 9 dated the 6th March 2019.