THE ISLAMIC Bank of Britain (IBB) could open more branches in Yorkshire as growing numbers of Muslims seek financial products that don’t offend their faith.
The Birmingham-based IBB, which has opened its first Yorkshire branch, is also reporting strong demand for its services from non-Muslims who want an alternative to the mainstream banks.
Islamic banking’s source of funding, profits and business investments cannot be from businesses considered unlawful by Muslims.
These include companies that deal in interest, gambling, pornography, tobacco and other commodities contrary to Islamic values.
According to Islam, interest is considered effortless profit, and is prohibited, which means no interest is received or paid by customers. Rather than paying interest, IBB shares out profits according to a profit sharing ratio agreed in advance with its customers. The IBB, which has 132 staff across the UK, opened its eighth UK branch in the office of Reeds Rains Estate agents in Dewsbury, West Yorkshire.
Imran Pasha, IBB head of retail, said: “We hope that this will give us a foothold in the Yorkshire region. We have plans to expand throughout the UK in 2012. We expect a tenfold increase in business in the next three to four years. One of the key aspects of that is the agency model, where we partner with a complementary business and we use that as a springboard to go out into the target market and offer them Sharia compliant products and services. The fact we’ve chosen Dewsbury to be the first agency shows the importance we attach to the West Yorkshire region.
“It will allow us to access the target market in the surrounding towns and cities. We are the largest provider of Islamic retail products in the UK.
“We’re hopeful of capturing 30 to 40 per cent of the target market. Over the last seven years, we have grown from zero to 50,000 customers across the UK.
“This year we’ll be looking at re-launching our commercial property finance proposition, which will be looking at bespoke deals for the target market.
“We plan to open another five agencies across the UK this year. We will then review the performance, and if there’s demand, and the business case stacks up, we are open to suggestions of opening more outlets in the Yorkshire region.”
Mr Pasha said the bank wanted to educate consumers of all beliefs about the benefits of Islamic finance. He added: “The recent economic crisis has been a boon for us. We have people of different faiths, ringing us up and enquiring about how they can apply for it.
“It’s about having an alternative to interest-based banking, which is fair and transparent and which also conforms to their ethical beliefs.”
Simon Walker, the head of home purchase plan sales at the IBB, said: “The IBB is embarking on a very assertive growth plan over the next four years. We’re backed by the Qatar Islamic International Bank and they have a depth of finance that we can use to ensure we have very strong foundations for the future. There’s a large group (of customers) who want to see people face to face. Traditional banks and traditional building societies have lost sight of that. We want to be a community bank.
“It’s about reaching out to the community through different distribution channels. One of the key pillars of our growth over the next four or five years is commercial property finance. The Muslim community in the UK is 2.5m people. That’s growing at a fairly rapid rate. We want to be a one-stop shop for a range of products.”
Sohaib Bin Hamid, the bank’s Dewsbury-based business development manager, said “We have a lot of non-Muslim clients, purely because of the way that we bank. We have no toxic liabilities. A lot of the banks are cutting thousands of jobs – we are recruiting people. We’ve seen a big downturn and we need to contribute to getting the economy back where it belongs.”