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The Islamic Bank of Britain (IBB) is to launch a public offering for shares worth £40mn (US$73mn), raising the capital of the country’s only Islamic bank to £54mn.
IBB which was granted formal approval to operate by Britain’s Financial Services Authority recently is due to offer the sale of 160mn shares.
The move is aimed at smoothing the implementation of the bank’s expansion strategy across a number of countries in the European Union.
IBB which is due to open the doors of its first branch next month in London, is the first bank in Europe to specifically address the needs of muslims, of whom there are 1.8mn in Britain alone.
Islam’s sharia law imposes a series of restrictions on the activities of banks, including a ban on charging interest for loans and prohibiting clients’ money from being invested in companies linked with areas such as alcohol, tobacco and pornography.
The notion of sharia-approved finance first emerged in Egypt at the start of the 1960s, and was developed in Saudi Arabia and United Arab Emirates.
Around 150 Islamic financial institutions operate in 40 countries, but their unconventional financing arrangements make them complicated to set up in the west.
Economists estimate that the Islamic finance market worldwide is worth an estimated US$200bn and is growing at 15% a year.