Al Rayan Bank

Al Rayan Bank PLC (formerly known as Islamic Bank of Britain) is a commercial bank in the United Kingdom, established in August 2004 to offer Sharia compliant financial service products to customers of any faith. The bank has two branches in London, and a branch in Birmingham. It also has agencies in Luton, Tooting and Bradford.[1] It is the first British bank claiming to operate, in its entirety, according to Islamic principles.[2] The bank welcomes people of all faiths and is becoming increasingly popular with non-Muslims looking for an ethical alternative to conventional banks.[3][4]

Al Rayan Bank PLC
FormerlyIslamic Bank of Britain plc
TypePublic
IndustryFinancial services
Founded2004
HeadquartersBirmingham and London, UK
Number of locations
9 branches and offices
ProductsBanking
GBP73.2 million (2019)
Number of employees
295 (2019)
ParentMasraf Al Rayan
Websitewww.alrayanbank.co.uk

The bank states that it has five values:[5] Sharia compliant, community oriented, secure, good value and pioneering. Faith is an important factor for the bank, and accordingly branches briefly close on Friday afternoons to allow the staff to attend Jummah (Friday) prayers.[6] The bank also has a Sharia department and an independent Sharia Supervisory Committee to ensure that its products are compliant with Islamic teachings.[5]

As of 2017, Al Rayan Bank has serviced 77,000 customers.[7]

History

Islamic Bank of Britain was formed by a group of investors from the Middle East to take advantage of the growing market for Sharia compliant financial services in the UK. In July 2002, consultants and advisors were employed to confirm if such type of bank was needed and if it would be accepted by the Financial Services Authority, FSA.[8]

Potential investors were invited, mainly from the Persian Gulf, who put together a private placement document which allowed the company to raise £14 million in start up capital by early 2003. In the same period, its first Managing Director, Michael Hanlon was recruited. Later that year, a draft business plan was proposed and formal application to the FSA was submitted.

By August 2004, the FSA granted authorisation of the bank,[9] and subsequently led to the Islamic Bank of Britain becoming available to the public.

Peter Horton is the current CEO of Al Rayan Bank; he joined the Bank in April 2020.

Macroeconomic conditions

Like all financial institutions, the Bank was adversely affected firstly by the global financial crisis of 2007–2008 and subsequently by on-going weak macroeconomic conditions. Despite, this IBB continued to grow and in 2012 attained the highest level of retail asset finance and deposit balances in its history.

The acquisition of Islamic Bank of Britain by Masraf Al Rayan

On 16 January 2014, IBB confirmed that its new parent company was Masraf Al Rayan, one of the largest Islamic banks in the world.[10]

In December 2014, Islamic Bank of Britain officially changed its name to Al Rayan Bank PLC, to reflect its status as part of the Masraf Al Rayan (MAR) group of companies.

Billion pound bank

In December 2016, Al Rayan Bank announced that the value of its retail and commercial asset book had passed the £1 billion mark for the first time.[11]

Rapid growth

In 2016, the Al Rayan Bank was named as the third fastest growing bank in the UK by 'Bank League Tables 2017',[12] a complete financial analysis of all 155 UK incorporated banks, published by Searchline Publishing. This was followed in 2017 by the Bank posting record pre-tax profits of £8.2m and announcing that it had over 77,000 customers.

Al Rayan Bank became the only UK Islamic bank to receive an official rating when global credit agency Moody's assigned a Aa3 deposit rating to Al Rayan Bank[13] in November 2017. Later that month the Bank's previous CEO, Sultan Choudhury was awarded an OBE for his services to Islamic finance by His Royal Highness Prince William, Duke of Cambridge[14]

References
  1. "Branch finder – Al Rayan Bank". islamic-bank.com. Archived from the original on 6 February 2014. Retrieved 13 November 2017.
  2. "First Islamic bank to open in UK". BBC. 9 August 2004. Retrieved 21 September 2007.
  3. "It isn't only Muslims who are buying ethical products with rising returns". 3 May 2015. Retrieved 13 November 2017.
  4. "The Best Savings Accounts You've Never Heard Of". Yahoo! Finance. Archived from the original on 5 December 2009. Retrieved 2 December 2009.
  5. "Vision and values". Islamic Bank of Britain. Archived from the original on 4 April 2014. Retrieved 2 April 2014.
  7. "IBB Annual Report 2016" (PDF). Al Rayan Bank. 31 December 2016. Retrieved 4 May 2017.
  8. "Prospectus" (PDF). Archived from the original (PDF) on 19 October 2007. Retrieved 13 November 2017.
  9. "Regulation and Islamic finance". Financial Services Authority. 13 June 2006. Retrieved 22 September 2007.
  10. "Masraf Al Rayan expanding global footprint with IBB buy". 16 January 2014. Retrieved 13 November 2017.
  11. Atkin, Joanne (9 December 2016). "Al Rayan Bank becomes a 'Billion Pound Bank'".
  12. "BANK LEAGUE TABLES – Searchline Publishing". searchlinepublishing.co.uk/bank-league-tables. Archived from the original on 14 November 2017. Retrieved 13 November 2017.
  13. "Moody's assigns a Aa3 deposit rating to Al Rayan Bank PLC; outlook negative". 1 November 2017. Retrieved 1 November 2017.(subscription required)
  14. "Al Rayan CEO receives OBE from Prince William". 13 November 2017. Retrieved 15 May 2019.
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