50,000 customer strong Islamic Bank of Britain seeks to expand its business
With a new chief executive and profit in mind, Islamic Bank of Britain is looking to expand its products and services to attract new customers.
Islamic Bank of Britain (IBB) is the only sharia-compliant retail bank in the UK, and with over 50,000 customers, it has enjoyed a level of success. But with a new chief executive on board, it is seeking to broaden its target audience by expanding the products and services it is owed.
Sultan Choudhury, who was announced as the new chief executive on 23 June, told Reuters that the bank is planning to grow its commercial property business as part of a plan to increase its profitability.
Commercial property is one of the sectors which has the most potential to provide fee-based income – the property finance business has doubled in size over the past 12 months. That will be central to the bank’s plans to finally turn a profit for the first time since it was founded in 2004.
Retail operations will stay focused in the UK for the foreseeable future, Mr Choudhury said, but areas such as property finance offer plenty of potential expansion into Europe. With countries such as Germany, France having sizeable Muslim populations of their own, that could mean a massive new customer base for the institution.
Mr Choudhury is now IBB’s longest-serving employee, and the bank said while announcing his appointment that he has worked developing the product range at the bank. Now, he is working with the bank’s new parent company on a strategy to deliver expansion as well as profit – and he says that will extend to Gulf-based customers who are seeking to invest in the UK.
IBB was acquired at the beginning of the year by Masraf Al Rayan QSC, an Islamic bank based in Qatar which contributed nearly £76 million to fund IBB’s growth plans. According to Mr Choudhury, the buy-out was a “watershed” moment for the bank.
“What it means is that we will be adjusting the direction of IBB,” he told Reuters. “We will shift to a much stronger focus on commercial banking.”
It is also hoping to buy a substantial portion of the £200 million of sukuk that will be issued by the government this week – a liquidity tool denominated in sterling that will make the bank’s everyday operations easier. Mr Choudhury hopes that another sale will follow using a more favourable structure.