Islamic Bank of Britain’s losses continue despite Qatari bailout

BIRMINGHAM-based Islamic Bank of Britain has reported half-year losses of £4.3m  despite a £20m bailout earlier this year.

In June, the bank placed £20m of new shares with Qatar International Islamic Bank after being caught by the economic downturn, which has seen yields in Islamic inter-bank markets reach historic lows. The same conditions continued to bear down on the bank, said chairman Mohsen Moustafa, reporting a reduction in net income from Islamic financing transactions of £0.5m.

Net operating income was just below £0.7m, the bank said, and losses were reduced by £0.3m compared to the same period last year.

Mr Moustafa said: “The Bank has been working with its advisors to raise additional capital.  The Bank has continued to achieve growth in finance assets during the six months to 30 June 2010 whilst ensuring the adequacy of its capital resources and achieving modest growth in customer deposits.

“The Bank has implemented specific measures during the period to counter the reduction in operating income including cost reductions by improving operational efficiencies.  These measures resulted in a decrease in operating expenses to £5.0m (6 month period to 30 June 2009: £5.6m).
 
Consequently the loss for the period decreased to £4.3m (6 month period to 30 June 2009: £4.6m).”