Kuwaiti firm opens Islamic investment bank in London

LONDON-Kuwait’s Securities House said it had launched an Islamic investment bank in Britain, allowing Gulf-based firms to access capital markets and Western borrowers to diversify portfolios.

The unit, Gatehouse Bank Plc, will focus on Islamic capital markets, institutional wealth management, Islamic treasury business and advisory services, it said on Tuesday. “London looks well placed to become the Western centre of choice for Islamic finance,” Gatehouse Bank Chief Executive David Testa said in a statement.

Muslims are increasingly seeking banking and investment products that comply with their faith, and experts say assets managed by Islamic lenders are set to hit $1 trillion by 2010. “With predicted annual growth of 15-20 percent globally, the demand for sharia-compliant products amongst investors, Muslim and non-Muslim alike, is growing at an unprecedented rate,” Testa said in the statement.

Britain is home to 1.8 million Muslims. Kuwaiti company Investment Dar, which owns 50 percent of carmaker Aston Martin, is also setting up an Islamic investment bank in Britain, an executive told Reuters in February. “We see a huge potential ... everybody knows the UK will be the Islamic finance hub of Europe,” Adham Charanoglu, business development manager at Investment Dar, said at the time.

Other Islamic investment banks, such as Bank of London and the Middle East and European Finance House, operate in London. Islamic banking complies with Islamic religious law. It does not lend on interest and offers investments that avoid activities such as dealing in pork, alcohol or gambling. From Islamic banking’s origins in the Gulf and Malaysia, there are now over 300 Islamic financial institutions spread among 75 countries, from very few 30 years ago, Kuwait’s Global Investment House said in a January report.