islamic finance

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

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


ADIB UK Finances US$51.23 million hotel acquisition

Earlier this month, Abu Dhabi Islamic Bank (ADIB) UK, a wholly-owned subsidiary of Abu Dhabi Islamic Bank, closed a commercial financing transaction for the acquisition of a Travelodge Hotel located at London’s Heathrow Airport. The property was acquired by a Saudi-based client for GBP40.3 million (US$51.23 million), with ADIB providing GBP26 million (US$33.05 million) of Shariah compliant financing to secure the hotel which has 20 years remaining on the lease.

Travelodge is the second-largest hotel brand in the UK with 560 hotels across the UK, Ireland and Spain. In company news, Federated Investors (UK) was appointed as the sponsor and manager of the new International Islamic Trade Finance Corporation (ITFC) Sovereign Energy Fund. The fund plans to raise US$300 million by the end of 2018 to invest primarily in energy-related trade finance, structured trade, export/ import finance, supply chain financing and project finance assets of sovereign entities across the energy value chain in OIC member countries. The fund will be a private offering available to the ITFC’s qualified investors across member countries of the OIC and the ITFC’s global partners.

In banking news, Gatehouse Bank appointed Sutherland Mortgage Services as a third-party service provider to handle the bank’s buy-to-let Shariah compliant home finances on a five-year contract. This is Dubai-based Sutherland’s first client in the UK. Also,
Al Rayan Bank increased its expected profit rate effective this month for all new 18, 24 and 36-month fixed term deposits by 0.05%, with the new rates now being 1.95%, 2.05%, and 2.2% respectively.

This article was first published in Islamic Finance news Volume 15 Issue 34 dated the 22nd August 2018.

UK’s first Islamic economy accelerator

UK is set to have its first Islamic economy accelerator named “iE5” to support the growth and success of start-up companies based in the UK or desiring a presence in the UK. Established by a team of Islamic finance leaders and led by Harris Irfan of Gateway and Abdul Haseeb Basit of Ellipses Advisory, the accelerator is planned to have its first physical hub in London before the end of the year.

The accelerator is being supported by several prominent organizations based in the UK as well as the Middle East 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.

London hosted the 12th Annual International Takaful Summit in July, a two-day event including a gala awards dinner which brought together industry leaders from around the world. The growth of the Takaful industry and demand of Shariah compliant financial products has seen the event attract 350 to 400 international delegates.

Al Rayan Bank appointed Paul McMillan as its new chief operating officer. McMillan brings over two decades of financial services experience to his new post and has previously worked at Royal Bank of Scotland (RBS) and Ulster Bank. Paul has led both banking operations and mortgage operation divisions, and more recently, completed a five-year spell at Acenden, a mortgage servicing solution business, where he was the chief executive.

This article was first published in Islamic Finance news Volume 15 Issue 31 dated the 1st August 2018.

Takaful policies and opportunities in the UK

With reportedly over 10 Takaful providers in the UK, there has not been a strong adoption of Islamic insurance by the Muslim market as one would expect given the growth of Islamic banking and finance in the country. The lack of standardization in the Takaful market could be a key factor for the slow growth. Global Insurer AIG, which issued the first Shariah compliant warranty and indemnity insurance policy in the London insurance market last year, hosted a panel discussion last month on Shariah compliant insurance or Takaful. Panelists discussed the challenges and opportunities in the UK market as well as policies to improve the standards and uptake of Takaful products in the country.

To address this concern, the Islamic Insurance Association of London (IIAL) is also seeking Shariah scholars’ approval for London’s standards for the transaction of Islamic commercial insurance to be rolled out next year coinciding with the UK’s departure from the EU on the 29th March.
The 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. Although the standards won’t be enforceable, the IIAL hopes the new standards will become best practice and raise industry standards as fintech start-ups also expect to enter the market and challenge incumbents.

Insure Halal is one of the country’s fintech start-ups which at the beginning of the year launched its Takaful home insurance product for both buildings and content coverage and is expecting to roll out further Takaful products in the near future. In Islamic banking news, to celebrate Ramadan, Al Rayan Bank increased the expected profit rate on its instant access cash ISA savings accounts from 1.22% GPA (gross per annum) to 1.35% GPA. The new rate is available to both new and existing customers.

This article was first published in Islamic Finance news Volume 15 Issue 23 dated the 6th June 2018.

The UK’s largest corporate Sukuk issuance; London Stock Exchange hosts Sukuk Summit

Aft er proposing its first-ever Sukuk offering in January, Al Rayan successfully closed the largest corporate Sukuk issuance in the UK’s history last month with the Tolkien Funding Sukuk No 1 raising GBP250 million (US$349.18 million) in capital. The Sukuk facility was rated ‘A’ and priced at 0.8% above the LIBOR rate. The bank did have to pay a relatively larger premium in comparison to conventional residential mortgage-back securities (RMBSs).

As an example, the Nationwide Building Society issued an RMBS on the same day for a premium of only 0.37% above the LIBOR. Nevertheless, the successful sale of Al Rayan’s Sukuk is a welcome development for the industry which has been recently overshadowed by the legal dispute between energy company Dana Gas and its Sukukholders since last year, a dispute which is still being contested in the courts.

On the 5th March, the London Stock Exchange hosted a timely Sukuk Summit to discuss ways to facilitate and support the issuance of Sukuk in the UK. With a keynote address from Dr Bandar Hajjar, the president of the IDB, the event brought together thought leaders from across the country.
“We have a real opportunity to recognize the potential of Islamic finance here in the UK,” Dr Bandar said in his address. “Both the UK government and the IDB are actively promoting this objective.” Considering the Jeddah-based IDB has capital of US$33 billion, with an initial funding plan of US$2.5 billion for the first half of 2018, it could definitely help accelerate the growth and development of Islamic finance projects and funding in the UK.

At the same event, the Bank of England also proposed to off er Shariah compliant liquidity tools to a wider range of financial institutions beyond Islamic banks to boost the growth of Islamic financial institutions such as mortgage companies, insurance and leasing firms.
According to Arshadur Rahman, a manager in the Bank of England’s Sterling Markets Division, the central bank is working on a fund-based deposit model. It would be able to help Islamic financial firms meet regulatory requirements for liquid asset buffers.

This article was first published in Islamic Finance news Volume 15 Issue 12 dated the 21st March 2018.

The UK’s Islamic Fintech panel launched

Islamic finance and fintech practitioners came together on the 24th January for the inaugural meeting of the UK Islamic Fintech Panel. According to the recent Islamic Fintech Landscape report by RED money Group, the UK has the second-largest number of Islamic fintech firms at 18, second only to Malaysia which has 21 fintech firms.

The panel chaired by Harris Irfan, a partner at Gateway Islamic Advisory, aims to create momentum in the Islamic fintech sector by leveraging London’s position as a global fintech hub and recognized center for Islamic finance. Al Rayan Bank plans to raise GBP250 million (US$345.57 million) via a residential mortgage-backed securitization Sukuk. The proposed 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 Investors Service has assigned a provisional ‘AAA’ rating to the Sukuk, which would consist of a portfolio of first lien home purchase plans secured by residential properties. On the strength of its growth last year, Al Rayan won two prestigious awards in January including the ‘Best Islamic Bank in the UK’ for 2017 at the Islamic Finance news (IFN) Awards and the ‘UK’s Best Cash ISA Provider’ at the eighth annual Moneynet Personal Finance Awards.

Winners of the annual IFN Best Banks awards are determined by votes cast by the industry itself, including Islamic finance issuers, investors, non-banking financial intermediaries and government bodies.
The bank also announced a 1% reduction in the rental rates for its ‘Buy to Let Purchase Plans’ and a new maximum finance to value band of 75% on the plans, up from 65% previously. This would make Al Rayan with the UK’s lowest Shariah compliant buy to let finance rental rates in the market.

In other news, UAE-based energy company Dana Gas must repay US$700 million-worth of Islamic bonds as London High Court Judge George Leggatt rejected an attempt by the company to overturn his decision from last November that the purchase undertaking behind the Sukuk was valid and enforceable. This was another setback for the company which is trying to resolve a dispute over the payment and the Shariah status of its Sukuk.

This article was first published in Islamic Finance news Volume 15 Issue 7 dated the 14th February 2018.

UK strengthens its position as Islamic Finance Centre


Islamic finance in the UK has continued to grow despite the economic uncertainty in the aftermath of the Brexit vote last year and the snap election in June. Islamic banks continued to demonstrate continued strength with record earnings from the Al-Rayan Bank, the country’s largest Islamic financial institution by assets. The first Shariah-compliant crowdfunding company, Yielders was approved by the Financial Conduct Authority, opening the way for other Islamic start-ups to meet the investment, banking, and financing needs of over three million Muslims across the country.

2017 Review

Boardroom conversations over the past year have swirled around the impact of Brexit on the financial services industry as an exit from the European Union (EU) could result in tens of thousands of job losses in the sector as firms shift operations into the EU. However, concerns about London losing its dominance as a global financial centre appear to be overblown as the sector continues to show resilience and particularly the Islamic finance industry is growing stronger by the day.

The UK made history in the summer of 2017 with the Royal Mint becoming the world’s first mint to achieve compliance with the Shariah Standard on Gold set out by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Considering the standard was developed in cooperation with the London-based World Gold Council (WCC), the UK clearly leveraged its leadership in commodity trading to attract Islamic investors. Who can now use the service to buy, store, and sell the Royal Mint’s bullion coins and bars securely online.

The Islamic banking footprint in the UK grew in 2017 led by Birmingham based Al-Rayan Bank opening a dedicated commercial banking office in London as well as three retail branches, including Wembley, Bradford, and its first branch in Scotland (Glasgow). The expansion was on heels of a robust earnings report in which Al-Rayan delivered a 32% increase in pre-tax profits and increased the bank’s’ balance sheet by an astounding 43% year-over-year with total assets of the bank reaching £1.4 billion.

In addition to traditional Islamic banks, innovative financial technology (FinTech) companies are also starting to take shape in the UK with the first Shariah-compliant FinTech company Yielders getting approval to provide online property crowdfunding investments. Another start-up Ummah Finance is planning to launch the country’s first completely digital bank and would effectively become the first Islamic challenger bank in the UK if successful.

2018 Preview

Outlook for the sector remains strong as the CityUK report issued at the IFN Islamic Forum in London in September titled “Global trends in the Islamic finance and UK market” further reinforced the sector’s confidence in London remaining the leading western centre for Islamic finance despite the uncertainty poised by Brexit.

It was at the forum in London that Mr Stephen Barclay, the economic secretary to the Treasury announced in his keynote speech, the government’s commitment to Islamic finance with the intent to reissue the country’s sovereign Sukuk when it renews the following year.

Additionally, there are trials underway for a commodity Murabaha financing product to provide shariah-compliant funding to small-medium enterprises (SME) across the country. The product is being developed by Liberis and backed by the UK government-supported British Business Bank. This would be one of the first Islamic SME short-term finance products in the UK and breaks new ground in Islamic finance for UK firms.

Shariah-compliant student financings, as well as the potential of regeneration projects across the UK, remain promising areas for Islamic finance to solve in the coming years. We may also see initiatives in Islamic insurance which has remained low-key despite the formation of the Islamic Insurance Association of London several years ago to promote the sector.

Expect to see further breakthroughs in commercial financing and investment products next year with Islamic FinTech startups taking root to bring innovative solutions to the marketplace. Supporting the over twenty banks in the country already providing Islamic products including the five fully shariah-compliant institutions.


Islamic finance has much more room to grow in the UK and offer Muslim consumers and businesses a greater choice. The regulations continue to be accommodating and will evolve to allow more innovative FinTech solutions to provide digital low-cost alternatives in the marketplace as consumer awareness and adoption of Islamic finance grows.

The UK no doubt will continue to be a Western centre for Islamic finance despite Brexit. And it can be argued the distinctiveness of London can perhaps be enhanced by Brexit as it unshackles itself from EU regulation and leverages the depth of its Islamic finance expertise and talent to continue supporting the development of the sector.

This article was written by Suhail Ahmad and first published in the IFN Annual Report 2018 (pg. 104) which can be downloaded free of charge at

Discover a World of Opportunities

This week the Institute of Directors (IoD) and the Scottish Business Network (SBN) will be hosting Scottish International Week. An amazing forum to learn and interact with some of Scotland’s leading businessmen and women with a track-record of success in new markets such as the Europe, North America, Middle East, and China.

The forum will be held throughout the week, starting today Monday 9th to Friday 13th at the IoD headquarters in Charlotte Square, Edinburgh. All sessions are free to attend but registration is recommended as seating may be limited.

I have the honour of speaking on Thursday afternoon at 3:30 pm, discussing not only my experiences in Canada but also the enormous opportunities for Scottish companies to reach the emerging Islamic markets in the Middle East and Asia.

Coincidentally, Edinburgh hosted the Global Ethical Finance Forum last month which I had an opportunity to attend and explore opportunities for collaboration with businesses and investors from the region.

I’ve shared my article below for your reference and encourage you not to miss a great opportunity at the Scottish International Week to learn from, connect to, and network with Scotland’s global leaders.

Islamic finance takes centre stage in Scotland

This article was first published in Islamic Finance news Volume 14 Issue 39 dated the 27th September 2017.

Over 300 business and finance leaders gathered in Edinburgh to attend the 2nd Global Ethical Finance Forum (GEFF) on the 13th and 14th September at the RBS Conference Center. The theme of the event was ‘Merging profit with purpose’.

Kirsty Britz, the director of sustainability at the Royal Bank of Scotland, opened the forum with a welcoming address that would set the stage for the two-day conference. “We must encourage ethical choices as a norm rather than the exception.” Key speakers at the GEFF this year included Keith Brown, the cabinet secretary for economy, jobs and fair work in the Scottish government; Nurlan Kussainov, CEO of Astana International Financial Center (AIFC) Authority; Jameel Ahmad, the deputy governor of the State Bank of Pakistan, and many more.

During the various panel sessions and keynote speeches, the forum covered the interplay between ethics, faith and finance. There were discussions on impact investing, sustainable development and green bonds, as well as an innovation showcase near the end of the forum which highlighted the latest innovative tools in ethical finance. Discussions on socially responsible and impact investing brought out the challenges facing asset managers with Anthony Hobley, CEO at Carbon Tracker, stressing: “We need to see a paradigm shift whereby ESG [environmental, social and governance] reporting becomes the norm and is just an integral part of any financial decision. For that to happen, it needs to be seen as critical to the management of financial risk and [to] achieve better returns.

This goes to the Holy Grail at Carbon Tracker, how does one translate the environment, climate energy and transition risk into quantitative financial risk and opportunity? To achieve this, ESG needs to be much more forward-looking than backwards-looking. It must be capable of stress-testing business models against foreseeable risks and transitions and capable of flagging the collapse in valuation we have already seen in US coal European energy utilities.”

As an example, green bonds came into prominence in 2007 when they were launched by a few development banks including the World Bank. Ten years later, the tax-exempt bonds continue to be suited to long-term projects. Preliminary estimates for green bond issuance in 2017 by HSBC, Moody’s Investors Service and Climate Bonds Initiative are all in excess of US$100 billion and demonstrate the massive opportunity for the ‘ethical’ bond sector. A green Sukuk facility, a Shariah-compliant version of the green bond, can provide much-needed investment in renewable energy and other environmental projects to finance regional development projects in the Middle East.

Discussing the inherent issues facing the financial services sector, Kussainov addressed the underlying challenges facing the industry. “Within the current business model in the financial services sector, speculation and arbitration are always based on asymmetric information. People from low-income groups who have less access to the information end up suffering more.

With the financial services sector rapidly embracing technology, there is a strong belief that in the near future there will be a reduction in the current communication gap that the sector presently faces. This will bring a very positive impact on to the development of Islamic and ethical finance across the world, helping it to realize its global value proposition.” David Parker, the executive director of Financial Services at the Bahrain Economic Development Board (ECDB) who also attended the forum, was confident the relationship between Islamic and ethical finance will become stronger. “We (ECDB) have been trying to develop [the] Islamic fi nance initiative around innovation and fintech, trying to ensure the industry is fi t for purpose in the 21st century. Islamic finance (will become) an important part of the wider ethical finance agenda.”

The forum closed on an inspiring note with an optimistic outlook by Nigel Kershaw, the chair of the Big Issue, highlighting that the democratization of finance will lead to the wider adoption of ethical finance as an integral part of investing, saying: “There is a lot of talk about ethical finance and in particular ESG and social impact because it’s talked about primarily by people involved in the financial sector. I believe the democratization of capital is extremely central to what we do. Quite often, the discussion is top-down supply and product-led and for me, it often misses one of the most important social outcomes that is quite often forgotten, that is the opportunity for ordinary people to invest and save in creating a better place to live for themselves, their families and the community around them. It’s not about mainstreaming ethical finance; it’s all about bringing the mainstream to us.”

The GEFF plays an instrumental role in connecting thought leaders and stakeholders from the responsible and Islamic finance world to learn, collaborate, and work toward a mutually inclusive desire to develop finance as a force for good.