Last week, the Islamic Bank of Britain opened its doors on London’s Edgware Road, securing (modestly) 15 new savings accounts but still managing to make news. While there have been Islamic investment services run by mainstream banks in Western countries (notably by Citigroup and HSBC) and online (Manzil), this is the first full service bank with the chequing and savings accounts (and ATMs!!) that most people use on a regular basis, geared towards the religious needs of Britain’s estimated 1.8 million Muslims. Approved by the UK’s Financial Services Authority in August, the bank gets most of its backing from investors in the Middle East and Britain (including managers from Islamic and Western banks) and relies on Sharia principles for its investments (no booze for you!). Operating on Sharia principles also means no charging or collecting of interest, with the IBB buying the assets sought by clients and selling them back with monthly payments (for you clever types, the extra amount is a fixed fee, not interest). But since confidence (and viability) is also measured by financial investment, IBB shares began trading last week on Britains Alternative Investment Market in order to raise funds (£40 million or $75 million, in addition to the £14 million, or $26 million on hand) for expanded operations in the UK and Europe. “We are confident that we can provide customers with a range of Sharia’a-compliant products and services that will be both competitively priced and equivalent to those available in a conventional bank,” said Managing Director Michael Hanlon, adding that the bank is “not solely for Muslims” (cue unintentional irony). So far, analysts are calling it a good stock pick (“traders reckon the share placing was several times oversubscribed”), with shares starting at 25p ($0.45).
Zahed Amanullah is associate editor of altmuslim.com. He is based in London, England.