The Islamic finance industry in the UK has gone from famine to feast in the past six months, according to one of the country’s leading Islamic institutions.
‘We have seen more business transactions in the past six months than we achieved in the previous three years,’ said Gatehouse Bank chief executive officer, Richard Thomas. ‘Business is booming not only in the UK and Europe but in new markets in Africa and in republics of the former Soviet Union in Eastern Europe.
‘People have been talking about the potential for growth for some time but now it is happening and we are seeing the rhetoric turn into activity.
‘A year ago the market was stagnant, but not now and we are getting so much business that we are going to have to develop human resources to cope with the flow,’ he said.
‘We need to manage this and that will meant co-operating with other banks to meet the demand,’ added.
He said that while globally, the Islamic banking industry was believed to be worth around $1.3 trillion, and growing fast, he felt the industry was considerably larger than that.
‘That figure only really represents bank transactions and does not include Sharia-compliant business carried out by family businesses and corporates.
‘The potential for further growth is tremendous when you look at the size of the market because Islamic finance is still worth just about half a per cent of the conventional financial industry,’ he added.
Islamic finance is bouncing back in its traditional Muslim markets but is unlikely to experience the growth levels it achieved a few years ago, according to Ernst & Young partner Sameer Abdi.
‘There is no doubt that Islamic finance suffered in the economic downturn, with some areas hurting more than others,’ he said.
‘But there are no signs of a recovery but I do not believe it will be quick or that we will see a return to the levels of growth of before the crisis.
‘I would expect 2011 to remain a difficult year but we can look for growth particularly in retail and corporate banking.
‘The industry now has to look at consolidating to achieve scale but it remains a very young industry and that could prove difficult,’ he added.