Al Rayan Bank PLC (مصرف الريان formerly known as Islamic Bank of Britain) is a

commercial bank A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

in the United Kingdom, established in August 2004 to offer

Sharia Sharia, Sharī'ah, Shari'a, or Shariah () is a body of religious law that forms a part of the Islamic tradition based on Islamic holy books, scriptures of Islam, particularly the Quran, Qur'an and hadith. In Islamic terminology ''sharīʿah'' ...

compliant financial service products to customers of any faith. The Bank serves its Premier and Commercial customers through Relationship Managers based in London. Retail customers are served through the Bank's Digital Banking and Telephone Banking services. The bank welcomes people of all faiths and has become popular with many non-Muslims looking for an ethical alternative to conventional banks. The bank has a Sharia department and an independent Sharia Supervisory Committee to ensure that its products are compliant with the principles of Islamic finance. As of 2020, Al Rayan Bank served 80,000 customers.

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 The Financial Services Authority (FSA) was a quasi-judicial body accountable for the regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investments Board (SIB) in 1985 ...

, FSA. Potential investors were invited, mainly from the

Persian Gulf The Persian Gulf, sometimes called the Arabian Gulf, is a Mediterranean seas, mediterranean sea in West Asia. The body of water is an extension of the Arabian Sea and the larger Indian Ocean located between Iran and the Arabian Peninsula.Un ...

, who put together a

private placement Private placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. Generally, these investors include frien ...

document which allowed the company to raise £14 million in

start up capital Start can refer to multiple topics: * Takeoff, the phase of flight where an aircraft transitions from moving along the ground to flying through the air * Starting lineup in sports * Starts use in sport race * Standing start, and rolling start, i ...

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, and subsequently led to the Islamic Bank of Britain becoming available to the public. Giles Cunningham is the current CEO of Al Rayan Bank; he joined the Bank i
April 2021.
In 2022, the Bank acquired a new headquarters in

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

's West End, 4 Stratford Place. The Grade II listed mansion houses the Bank's Board, Executive, Commercial and Premier Banking divisions.

Macroeconomic conditions

Like all financial institutions, the Bank was adversely affected firstly by the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

and the

Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.

. 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. 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.

Rapid growth

In 2016, the Al Rayan Bank was named as the third fastest growing bank in the UK by 'Bank League Tables 2017', a complete financial analysis of all 155 UK incorporated banks, published by Searchline Publishing. Commercial property finance increased by 44% to £396.5m in 2016 becoming the fastest growing element of Al Rayan Bank's property portfolio. 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 Moody's Ratings, previously and still legally known as Moody's Investors Service and often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its histo ...

assigned a Aa3 deposit rating to Al Rayan Bank in November 2017. Later that month the Bank's previous CEO, Sultan Choudhury was appointed an OBE for his services to Islamic finance by His Royal Highness Prince William, Duke of Cambridge.

New strategy

In 2022 the Bank announced that it intended to become a financial institution which is focused on premier banking and property, mainly high value residential investments, to deliver a viable, resilient, Sharia compliant business. Al Rayan Bank said its existing retail banking business will be maintained, but will not be the primary focus in the future. This change of strategy was one of the reasons behind the Bank posting record profits for 2022.

References

External links

Q & A Islamic Finance (BBC)
{{DEFAULTSORT:Al Rayan Bank 2004 establishments in the United Kingdom Banks established in 2004 Banks of the United Kingdom Islam in the United Kingdom Islamic banks