The Banker’s 2019 Islamic Bank of the Year Awards offers a snapshot of an industry brimming with confidence and one that is defining its own story.
The growth of the Islamic finance sector over the past few decades has been meteoric.From an embryonic cluster of localised markets, it has blossomed into a $2000bn-plus cross-border industry. As a result, the narrative that has developed around this rise has tended to focus on the numbers underpinning it. But times are changing and The Banker’s 2019 Islamic Bank of the Year Awards offers a snapshot of an industry brimming with confidence and one that is defining its own story. The winners of this year’s global, regional and country awards have, for the most part, outlined a vision for their respective institutions – and the wider industry – that is attempting to change the financial, socio-economic and environmental terrain in which they operate.
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This can be seen across a diverse set of initiatives; from efforts to train and educate entrepreneurs, to financial inclusion programmes to environmental sustainability drives. Indeed, the common thread linking the 2019 winners is a concerted desire to work hand in hand with local communities for their mutual betterment. This goes to the heart of the industry’s current drive to be at the forefront of global ethical finance. And if the 2019 winners are anything to go by, Islamic financial institutions are certainly leading the way.
Once again The Banker’s awards also highlight the new physical frontiers that are opening up to Islamic financial institutions. Markets such as Bangladesh and Egypt, which are featured for the first time, are both populous and underserved by existing banks. Moving forward the opportunities for Islamic banks in these jurisdictions will be vast. Accessing them will require ingenuity and innovation, both of which are in abundant display in the award entries for the 2019 winners. The use of digital technology is on the rise, as are partnerships with disruptive fintech and mobile operators.
Though technology will be vital to the industry’s future, so too will education. And it is heartening to see that many of the winning entries have prioritised financial literacy and inclusion initiatives that are designed to raise the understanding of Islamic finance in key markets. This is important for a number of reasons. Primarily, it will, over time, address the large awareness gap between Islamic and conventional finance that exists in some frontier markets.
Meanwhile, in the more developed jurisdictions Islamic banks are increasingly securing new growth opportunities from non-Muslim customers. This is true for both Muslim-majority markets with high expatriate populations but also in non-Islamic countries such as the UK. As the wider industry makes its case for being an ethical finance leader, expect this trend to continue.
Global, Asia-Pacific, Malaysia
Winner: CIMB Islamic
CIMB Islamic is a genuine global heavyweight in the world of sharia-compliant finance. This status is as much a reflection of the bank’s size as it is of its sophistication. But the lender has secured The Banker’s global award for reasons beyond these. In particular, the judging panel was impressed with the ways in which CIMB Islamic is pushing Islamic finance to the forefront of new domains, including trade between China and the Association of South-east Asian Nations (Asean), environmental sustainability and the cross-border Islamic economy. In addition, the bank has been at the forefront of a number of corporate social responsibility initiatives, including educational and vocational outreach initiatives.
This is the first time a south-east Asian bank has secured the global award in two years, after a brief period of Middle Eastern lenders winning out. Though the big banks from both regions have weathered global and regional economic uncertainties relatively well – profits have gone up across the board – CIMB Islamic has articulated a vision of what it, as an institution, as well as the wider industry, can achieve over the long term through the application of sharia-compliant principles. This vision of social, economic and environmental sustainability is compelling and caught the attention of the judging panel.
For one, the bank has supported more than 150 entrepreneurs across four universities, including Taylors University, Universiti Teknologi MARA, International Islamic University and Universiti Utara Malaysia, through direct grants that have supported educational and vocational programmes. The outcome of these programmes include improved incomes for the participants, which in turn have helped to support family members and other individuals with ties to entrepreneurs, according to CIMB Islamic.
On the environmental front, the bank is working in partnership with the World Wildlife Fund (WWF) to conserve riverways and water resources in the Ulu Muda forest in the state of Kedah, as well as the Long Semadoh region in Sarawak. The two partners are also working with local communities to ensure their lifestyles are more sustainable and teaching them new skills, while supporting the livelihoods of those affected by these efforts.
But CIMB Islamic’s green initiatives also include the management of the government of Indonesia’s debut green sukuk. The $1.25bn five-year tranche transaction, which was executed in early 2018, was the first of its kind by a sovereign. In addition, CIMB Islamic has also financed the construction of two 1-megawatt biogas-to-power facilities with a value of RM13.8m ($3.3m).
Beyond these initiatives, CIMB Islamic is also prioritising the development of the global halal economy. The bank’s commercial banking and transaction banking businesses are developing products and services that will permit small and medium-sized enterprises (SMEs), and other entities, to benefit from growing cross-border consumer activity in this domain. Similarly, the bank’s conception of a China-Asean halal corridor is designed to facilitate a seamless trade journey for halal goods between these markets. As such, the bank’s SME customers will benefit from involvement in the supply chain that springs up along this corridor, which will have a focus on cosmetics, agribusiness, modest fashion and pharmaceuticals, among other sectors.
Alongside these big picture ambitions, CIMB Islamic is also expanding its business at a local level. In particular, the bank has rolled out 14 Islamic-centric bank branches in strategic locations. Since being developed, these branches have registered an elevated share of Islamic business in retail current and savings accounts, credit takaful bookings and enterprise banking deposits, among others. Through this, the bank is reaching out to both existing and prospective customers and extending the reach of Islamic financial services across Malaysia.
Meanwhile, CIMB Islamic has formed a partnership with Tabung Haji (TH), the Malaysian hajj pilgrims fund board. This arrangement offers TH customers innovative services to improve the management of their finances for hajj savings. Since launching in September 2018, more than 10,000 customers have linked their CIMB Islamic and TH accounts. A full suite of services, including funds transfer and balance enquiries, can be executed on the bank’s self-service terminals.
These initiatives and others have helped to propel the performance of CIMB Islamic to new heights. In particular, the bank’s return on equity has gained positive momentum in recent years by climbing to 16.1% in 2018 from 14% in 2016. Meanwhile, the total Islamic banking operations of the CIMB Group (CIMB Islamic’s parent entity) saw net profits surge by 13% in 2018, up from an already impressive 28% in 2017.
As a result of this outstanding performance and strategic vision, CIMB Islamic has emerged as an outstanding global winner in our 2019 awards.
Winner: Qatar Islamic Bank
Qatar Islamic Bank (QIB) easily secured both the Qatar and Middle East regional categories in The Banker’s 2019 Islamic Bank of the Year Awards. Once again, the bank has demonstrated a keen ability to innovate its products and services to reach new customer segments, while tailoring its existing propositions to better serve established partners. These factors, in tandem with an impressive set of financial results, ensured that QIB scooped the regional top spot. In 2018 the bank’s net profits increased by 14.55%, while its total assets and Tier 1 capital grew by 1.9% and 1.5%, respectively. This built on an equally impressive performance in 2017 when net profits grew by 11.6%.
More encouragingly, QIB’s return on equity has consistently improved over the past three years. In 2016 it was 15%, while in 2018 it had climbed to 17.4%. This was accompanied by improvements to the bank’s cost-to-income ratio, which dropped to 25.7% from 29.8% over the same period. All of this was achieved in the midst of heightened regional political and security concerns from which Qatar has suffered more than most.
In 2018, QIB launched its ‘Instant Financing’ digital service that enables existing and pre-approved customers to secure personal financing with just a few clicks online. The process is completely paperless and is executed through the QIB mobile application. For its corporate clients, QIB introduced the first Islamic point-of-sale and online payment gateway in Qatar. The sharia-compliant point-of-sale solution, developed by Android, offers secure and efficient payment processing services and supports contactless card transactions, e-wallets, mobile payments and QR code scanners.
To cater to Qatar’s large population of blue-collar workers, QIB also launched a dedicated bancassurance plan known as the WPS takaful family shield. This product provides financial security in the case of accident or injury at affordable prices. Meanwhile, the bank has also been an active financier of Qatar’s corporate sector, including financing five projects with a value of QR3.2bn ($880m) with Bin Omran Trading & Contracting covering major transport infrastructure.
Winner: Samba Financial Group
Samba Financial Group’s Islamic banking division has gone from strength to strength in recent years. Robust growth has been accompanied by the provision of high-end sharia-compliant financial services solutions across a range of business segments. In addition, the bank is continuing to invest in its suite of Islamic product and service offerings, all of which marked it out in a highly competitive award category. Beyond these factors, the Islamic banking division’s performance figures were also impressive. In US dollar terms, net profits increased by 10% in 2018 while the lender’s return on equity reached 12.7%.
These achievements are notable in a market that has, over the past 18 months, endured a number of pressing headwinds. With Saudi banks facing limited credit growth, the sector as a whole – though expanding at a steady rate – is performing below its potential. Nevertheless, with investments in the government’s Vision 2030 agenda accelerating and the prospects for privatisation and increased foreign investment looking more favourable in 2020, the outlook remains broadly positive. With demand for Islamic financial services increasing, units such as Samba’s Islamic banking division look set to prosper.
Indeed, the Islamic banking division has been making a number of headline investments in its capabilities that will position it well to benefit from this growth story. This includes the hiring of a new set of commodity brokers to cover sharia-compliant transactions, a move that should improve operational efficiency in the division. Meanwhile, the Islamic banking division also offers a high-end suite of structured Islamic treasury products with the sophistication to match any conventional counterpart.
The Islamic banking division has also been involved in a number of headline regional syndicated financing deals through Samba Financial Group’s presence in the United Arab Emirates. This includes the financing for the Nad Al Sheba villas, a residential property development that involved Dh500m ($136m) and Dh1bn ijarah (leasing agreement) financing instruments. In the domestic market, Samba’s Islamic banking division typically plays a leading role in Islamic syndicated financing transactions.
Winner: Standard Chartered Saadiq Bangladesh
Bangladesh’s economy is growing at a blistering pace.In the 2019-20 fiscal year the Asian Development Bank expects it to expand by about 8%, positioning the south Asian market as one of the fastest growing countries in the world. This impressive growth, together with a positive demographic profile, makes Bangladesh one of the most exciting jurisdictions in the global Islamic finance marketplace. But sharia-compliant banking is relatively nascent in the country; Islamic banks hold about a 24% share of total financing, according to figures from the central bank.
Notably, the winner of the 2019 Bangladesh award, Standard Chartered Saadiq, is the first bank to secure the top prize. And it is an achievement that should be recognised by the bank’s industry peers. The judging panel was impressed by Standard Chartered Saadiq’s innovative suite of products and services and its commitment to expanding Islamic financial service offerings to new customer segments as well as new regions of the country.
In early 2019, the bank introduced the Saadiq Special Notice Deposit (SND) account, which is a profit-bearing deposit account for business groups. It is the first profit-bearing account for small and medium-sized businesses banking with Saadiq. By providing its clients with a lucrative offering in which to deposit funds, the bank expects to boost its business banking deposit base by about 20%. Beyond its business banking proposition, the bank has also launched the Saadiq Graduate account, tailored to the needs of university students. This offering has a higher profit rate than other saving accounts as well as reduced charges and no maintenance fee.
Meanwhile, Standard Chartered Saadiq Bangladesh has become the only Islamic bank in the country to partner with mobile financial service group bKash. Through this partnership customers of the bank can easily transfer funds from their account to a bKash account, while businesses with a SND account can enroll with bKash and send salaries to their staff. bKash boasts a network of more than 180,000 agents across the country along with more than 30 million registered accounts.
Winner: Abu Dhabi Islamic Bank Egypt
This is the first year that Egypt has featured in The Banker’s Islamic Bank of the Year awards, but it is unlikely to be the last. In common with other fast-growing, populous, majority-Muslim countries, Egypt remains relatively untapped when it comes to sharia-compliant financial services. The growth story of the first ever winner of the country award – Abu Dhabi Islamic Bank (ADIB) Egypt – reflects the size of this opportunity. The bank’s net profits surged by high double-digit figures over the three-year review period as its return on equity jumped from 22.8% in 2016 to 29.7% by the end of 2018.
Underpinning this performance is ADIB’s approach to product and service development which prioritises the needs of its growing customer base. The bank’s cashback card, for example, is the only card in the market designed to give customers 2% cashback on local purchases and 5% on international purchases with no limit and a 55-day grace period. In terms of the bank’s savings offerings, ADIB has a wide range of current, savings and investment accounts that offer repeat profit disbursements and tiered benefits for individual customers.
Meanwhile, ADIB’s recently launched ‘Diamond’ and ‘Gold’ value offerings deliver a wide range of benefits for its customers. These include a personalised photo chequebook, special rates on products and services, and a priority service through customer channels, among others. Under its ‘Diamond’ proposition, ADIB’s customers can make use of the bank’s
Mastercard World Debit card, which provides 1% cashback on all local purchases, access to VIP lounges at international airports, hotel and car rental discounts, insurance services and priority reservation and discounts at exclusive restaurants in the country.
ADIB Egypt has also developed a successful vehicle financing portfolio by providing financing solutions for new and old vehicles with flexible payment terms. These initiatives, and others, will serve the bank well as Egypt transitions into the next phase of its growth story.
Winner: Islamic International Arab Bank
Islamic International Arab Bank (IIAB) has scooped a competitive Jordan country award as a result of its impressive set of results and its commitment to financial inclusion. In 2018, IIAB registered an 11% increase to its net profits, while total assets and Tier 1 capital grew by 9.6% and 11%, respectively. The bank’s return on equity, meanwhile, hit an impressive 16.4% by the end of 2018, while its cost-to-income ratio was 41.6% and non-performing loans were at 1.9%. Taken together, this was a strong performance in an economy that has been ticking along at a sub-optimal pace for the past few years.
IIAB’s success is in part a product of the bank’s ability to tailor its customer offerings to the demands of the local market. The success of its Arabi Islamic Installment credit card is a case in point. Launched in 2013, the card is built around a revolving credit limit based on the concept of ‘qard hassan’, which is an interest-free loan. Under this structure IIAB customers can pay off the card’s utilised limit through monthly instalments without incurring any additional fees or commissions. This was the first sharia-compliant revolving credit card to be introduced in Jordan and by 2018 IIAB claims that the card reached its target maturity level in terms of customer take up.
The bank also boasts impressive financial inclusion credentials when it comes to serving low-income groups and micro, small and medium-sized enterprises. In particular, IIAB offers 0% financing to support individuals’ hajj, umrah and udhiah requirements. For start-ups and small and medium-sized enterprises, the bank also provides soft financing options coupled with transparent terms and conditions to offer attractive funding packages for Jordan’s business community.
Indeed, IIAB is working to develop additional products and services to cater to underserved groups in Jordan’s economy. In this regard, the bank envisions a unique role for sharia-compliant financial institutions in supporting social and economic development in Jordan and beyond in pursuit of the global sustainable development goals.
Winner: Boubyan Bank
Few banks in the Middle East are as technologically savvy as Kuwait’s Boubyan Bank. Indeed, the bank’s management culture reflects, to some extent, that of an innovative digital start-up. This strategy has been necessary in a highly competitive domestic banking sector; thinking outside the box and becoming an early adopter of new technology has rewarded Boubyan Bank handsomely. Since 2016, the bank’s net profits have increased every year by more than 15%. In 2018 they grew by 18%, as total assets and Tier 1 capital expanded by 9% and 10%, respectively.
More impressively, Boubyan Bank’s return on equity reached 13% by the end of 2018, up from 11.8% in 2017. Over the same period its cost-to-income ratio dropped to 40.6% from 42.1%. This strong performance was underpinned by the launch of a number of market firsts. These include Kuwait’s first chatbot, known as ‘Mosa3ed’, an interactive service based on artificial intelligence that is designed to help customers engage with the bank’s mobile application. Mosa3ed enables Boubyan Bank’s clientele to process transactions more quickly, check account and card balances and credit and mobile payments, among others.
Meanwhile, in 2018 customers were given the ability to create a term deposit through Boubyan Bank’s mobile banking application, without having to visit a branch. Through the app, individuals can select the type of deposit to invest in along with a maturity and profit rate suited to their needs.
Boubyan Bank is also at the forefront of efforts to develop Kuwait’s fintech scene. The bank is partnering with a number of start-ups through its dedicated Digital Innovation Centre as well as its partnerships and innovation department. Through these mechanisms, Boubyan Bank has worked with startups to test and launch proof of concepts. A partnership with global accelerator programme Plug and Play has also given the bank a window into fintech developments around the world, including access to new ideas, talent and trends. Boubyan is also a sponsor of the Arabnet workshop, a major digital conference that helps designers, developers and entrepreneurs build better digital products.
Winner: Blom Development Bank
Lebanon’s Islamic finance industry is nascent. Sharia-compliant assets remain just a fraction of total banking system assets, while the number of Islamic banks is relatively small. Even so, the winner of the 2019 Lebanon country award, Blom Development Bank, has demonstrated the kind of customer service excellence and innovation seen in more mature markets. This fact, coupled with the bank’s strong performance over the review period, ensured that it scooped the top spot. In 2018, Blom Development Bank saw its net profits increase by 4.21% while total assets and Tier 1 capital grew by 13.7% and 7.4%, respectively.
This performance is notable for a number of reasons. Above all, the Lebanese economy has been suffering as a result of regional political and security issues, as well as an array of domestic challenges. This has contributed to sluggish growth and limited opportunities for the country’s financial sector. But even as these conditions have taken their toll on the country’s banks, Blom Development Bank’s return on equity was a respectable 8.2% in 2017 and 7.95% in 2018. Meanwhile, the lender has markedly reduced its cost-to-income ratio from 54% in 2016 to 42% in 2018.
In early 2019, Blom Development Bank launched Lebanon’s first sharia-compliant investment fund, the ‘Blom Murabaha Fund’. As an open-ended pooled investment fund it will look to strike a medium- to long-term balance between capital growth and capital preservation by investing in assets in sharia-compliant money markets. The fund’s structure will enable the bank’s corporate clients to consider short-term investment opportunities for their liquid funds. This will be particularly attractive to some entities, given that investment accounts in sharia-compliant Lebanese banks have a minimum six-month tenor under the country’s laws.
Meanwhile, Blom Development Bank is also pushing hard to enhance its e-banking proposition in order to reach to new customers in rural and remote locations. At present, the bank’s dominant customer base is found in the major urban centres of Beirut, Tripoli and Sidon.
Winner: Standard Chartered Saadiq Pakistan
Pakistan’s economy is facing a number of serious challenges. High debt levels, rising inflation and plunging foreign currency reserves have all contributed to a less favourable growth outlook, with the International Monetary Fund projecting gross domestic product growth of 2.9% in 2019, down from 5.2% in 2018. But despite these difficulties, some optimism remains. Investment activity linked to the China-Pakistan Economic Corridor is robust and energy supply across the country continues to improve, while the government has set about imposing a range of structural reforms to the economy.
Indeed, for the country’s Islamic banks, business has been favourable. The winner of the Pakistan country award, Standard Chartered Saadiq, is no exception. In 2018 the bank’s net profits increased by 70% while total sharia assets and Tier 1 capital expanded by 12% and 22% (in US dollar terms), respectively. This mirrors the bank’s performance in 2017, with all three metrics growing by double digits. More impressively, the bank’s return on equity has surged over the past three years, climbing from 27% in 2016 to 45% in 2018.
Beyond the numbers, the judging panel was particularly impressed with the bank’s tailored support for Pakistan’s small and medium-sized enterprises (SMEs). The Saadiq business term finance offering, for example, is designed to meet the liquidity and working capital needs of the country’s SMEs. In addition, the Saadiq business mortgage finance helps Pakistani businesses to acquire property for commercial use. Offerings of this kind provide vital tools to support the country’s small businesses.
In addition, Standard Chartered Saadiq Pakistan also provides off-balance-sheet solutions for its corporate and commercial clients under an Islamic ownership structure. Through an advanced payment murabaha (cost-plus financing), the bank’s customers are provided extra leverage to secure additional debt without the liability on their books. This kind of innovative product offering, coupled with its suite of digital banking services and strong financial performance, have ensured that Standard Chartered Saadiq scoops the 2019 country award.
Winner: Alinma Bank
Alinma Bank has established a name for itself as one of the Saudi Arabia banking sector’s leading digital innovators. This reputation is mirrored in the bank’s achievements over the past 12 months, which include the launch of ApplePay, mada Pay (for Android), 24/7 digital branch banking and online current account opening, among other milestones. The bank’s approach to innovation, coupled with its outstanding results in recent years, ensured that Alinma captured the judges’ attention and secured the Saudi country award.
In 2018, Alinma Bank’s net profits expanded by 25% in local currency terms as total assets and Tier 1 capital grew by 6% and 8%, respectively. This followed an equally impressive performance in 2017 when the lender’s net profits surged by 34%. Encouragingly, Alinma’s return on equity has been moving in the right direction in recent times: in 2016 it was 8.01% while in 2018 it had climbed to 12.09%. This was accompanied by a downward movement in the lender’s cost to income ratio which fell to 38% in 2018, from 45% in 2016.
To better support the development of the Saudi economy, Alinma Bank renewed and enhanced its memorandum of understanding with the Kafalah programme (small and medium-sized enterprise [SME] financing) in the country. This enhanced agreement will see the bank play a larger role engaging with Saudi SMEs, underscoring its existing SME banking unit. In doing so, Alinma Bank is meeting the objectives laid out in the Saudi government’s Vision 2030 reform agenda.
Meanwhile, Alinma Bank has distinguished itself globally by publishing a compendium of all its sharia rulings over the past 10 years. This compendium, coupled with the launch of version two of the bank’s sharia application, will go a long way to advancing global standards and norms in the Islamic finance industry. By opening up these rulings, the bank is giving researchers access to the kind of critical, practical thinking that is used at a major Islamic bank. In turn, this is likely play a part in advancing the agenda of harmonising standards across the wider industry.
Winner: Amãna Bank
Amãna Bank continued its recent strong track record by once again taking the Sri Lanka country award. The lender’s impressive set of results, coupled with its innovative suite of product and service offerings, caught the judges’ attention.
In 2018 the bank saw its net profits, in local currency terms, increase by 11% as total assets and Tier 1 capital expanded
by 22% and 4%, respectively. Amãna Bank’s return on capital at the end of 2018 was 4.6% while its cost-to-income ratio was 56%. Its non-performing loan ratio was 2.8%.
In line with the bank’s objective of reaching out to Sri Lanka’s small and medium-sized enterprises (SMEs), Amãna launched its Business Plus platform, which is dedicated to the needs of this customer segment. The idea behind Business Plus is to provide additional services, customer care and benefits to business owners so they can devote more time to growing their enterprises. The bank’s success in the SME space is clear, with about 42% of its total advances going to this customer segment. As part of its SME drive, Amãna also pushed hard to build its SME client base outside of Sri Lanka’s Western Province. In doing so, it has diversified the geography of its customer base and increased financial service offerings to underserved regions of the country.
Meanwhile, Amãna Bank has pursued other customer-centric initiatives, including self-banking centres. These enable customers to perform most banking
services 24 hours a day, seven days a
week. The introduction of self-banking centres has seen Amãna Bank increase its service touchpoints to 43 in 2018, from just 29 in 2017.
In addition to physical service points, the bank is also working on customer education through its knowledge marketing unit. The unit works to educate existing and prospective customers about the ways in which Islamic banking differs from its conventional counterpart, as well as the various products and services on offer. The knowledge marketing unit was responsible for 25 public awareness programmes offering education of this kind in 2018.
Winner: Abu Dhabi Islamic Bank
These are leaner times for the United Arab Emirates. Though its economy expanded by 1.7% in 2018, well above the 0.8% registered in 2017, it is still performing below its potential. Slower job creation, particularly in higher paid professions, is contributing to mounting pressure on the domestic real estate market which, in turn, is raising asset quality concerns in some of the country’s smaller banks.
Nevertheless, it is not all bad news. Even as these difficulties have emerged a number of Emirati banks have continued to benefit from sound growth opportunities. Chief among these is the winner of this year’s UAE country award, Abu Dhabi Islamic Bank (ADIB).
In 2018 the bank’s net profit increased by 15%, while total sharia assets expanded by 1.6%. Meanwhile, by the end of 2018 the institution’s return on equity sat at a healthy 19.3%, while its cost-to-income ratio was 45.8%. Non-performing loans were relatively steady – if high – at 4.8%. Taken together, ADIB’s recent performance has been impressive in somewhat sluggish economic conditions. Underpinning this achievement is the bank’s commitment to product and service development. In the wealth management space, for example, ADIB has launched a 100% capital-protected sharia-compliant equities basket note offering customers exposure to a group of companies in the cybersecurity sector.
Over the past 14 months, ADIB’s wholesale banking business has executed 15 high-profile transactions, including structured and syndicated finance, sukuk, mergers and acquisitions and advisory deals. On behalf of government-related entities, corporates and financial institutions, the bank acted as mandated lead arranger and bookrunner for deals to the tune of Dh11.7bn ($3.2bn), positioning ADIB as a leading Islamic bank for structured and syndicated transactions.
The bank’s continued growth and success saw it welcome its 1 millionth customer in 2018. This was nearly double the number it had just five years ago, according to ADIB’s figures. The growth of ADIB’s digital channels has also contributed to a significant rise in its number of active customers.
Winner: QIB UK
Islamic banking in the UK may be small but it is booming.Today, the UK is arguably the leading non-Muslim majority country when it comes to the provision of Islamic financial services, with a limited but healthy community of Islamic banks making inroads into the wider economy. In addition, the UK government was the first Western sovereign to issue a sukuk, effectively cementing the country’s position as the leading Islamic finance hub outside of the Middle East and Asia. Encouragingly, this success story looks set to continue.
The winner of the 2019 UK country award, QIB UK, is playing its part in contributing to this success through the provision of attractive products and services. The bank obtained the licence to offer sharia-compliant regulated mortgages in 2016 and today these account for 25% of its private banking portfolio. In addition, in October 2018 the bank partnered with Raisin UK, the British offshoot of a Europe-wide savings marketplace, to offer sharia-compliant term deposits in the UK retail market. On offer is a one-year fixed-term deposit at 1.90% and a two-year fixed-term deposit at 2%. Both deposits require a minimum of £1000 ($1275) and have a deposit ceiling of £85,000.
As a result of this offering, QIB UK is seeing increased interest from non-Islamic customers who are looking to benefit from the bank’s competitive rates, as well as its high ethical standards and customer service. Indeed, this trend is being replicated across the UK, as well as global Islamic banking market, as non-Muslim customers are increasingly contributing to the industry’s growth momentum.
Meanwhile, QIB UK was also a senior participant in the £250m senior Islamic facility for the development of a Grade I listed London property known as Regent’s Crescent. The deal was notable for being the largest sharia-compliant financing in the country for a number of years. The development will see the creation of luxury flats in the Marylebone area. Islamic finance providers are playing a growing role in the UK’s real estate market. Over the past couple of years, sharia-compliant instruments have been used to finance a number of developments in London and Sheffield, among other locations.
