Record breaking profits for Islamic bank

Challenger bank Al Rayan Bank has announced record pre-tax profits of £8.2m, an increase of 32%.

The figure has been driven by the rapid growth in the bank’s balance sheet, which increased by 43% to more than £1.44bn.

The Birmingham-based bank, which opened a branch in Bradford last year, is the UK’s largest Islamic bank by assets.

Its performance benefited from an increase in home purchase and commercial property loans.

In its annual results statement, the bank said Home Purchase Plan (HPP) financing had increased by 41% to £637m, while Commercial Property Finance had grown by 44% to £393m.

In addition, retail deposits grew by 67% to more than £1.2bn. The bank’s investment in Sukuks (Islamic bonds) increased by 38% to £167m.

In 2016, the bank attracted new customers in record numbers, with more than 16,000 new accounts opened – at an average of nearly 44 a day. This was achieved while the bank strengthened its management team and continued with its transformational business strategy, a move designed to ensure it maintains steady growth, control over its costs and sustained profitability in the years ahead.

It also opened three new branches in the UK, in Wembley, Bradford and Glasgow – the latter being the bank’s first physical presence in Scotland.

To ensure its strong growth and profitability are sustained, the bank intends to expand its HPP services, increase its exposure in the Commercial Property sector, boost its number of high net worth clients, lobby government for a level playing field for Islamic finance and improve its digital offering.

The positive results continue the growth trajectory set in motion when the bank was acquired by Masraf Al Rayan QSC (MAR), one of Qatar’s largest banks, in February 2014.

Sultan Choudhury, CEO, Al Rayan Bank said: “The bank is strong and profitable, and continues to grow. Whilst these numbers are central to the continuing success of the bank, equally important is the growing appeal to its non-core markets. Today more than a quarter of our customers, and almost a third of the bank’s employees are estimated to be non-Muslim. It is through this wide appeal that Al Rayan Bank will become an enduring British banking brand.”