UK looks to become a global provider of Islamic finance

A government organisation is looking to educate financial institutions in a bid to help the UK become a global provider of Islamic finance.

UK Trade & Investment, which incorporates the work of the Foreign & Commonwealth Office, has leant its support to a breakfast briefing hosted by the Association of Corporate Treasurers.

The aim of the briefing is to give financial companies more understanding of Islamic finance by explaining whom it applies to, how it can complement existing financial services strategy, and what the benefits are.

Sharia Islamic law forbids the practice of making money from money, such as charging or paying interest.

Sharia-compliant mortgages involve the bank buying the property with the buyer then buying it back and renting it at a slightly inflated price. Buyers also have to be sure that the money the bank is using to buy the property has come from permissible sources.

The sector is currently thought to be worth $500bn (£294bn) and it is predicted the sector will grow by a further 15% per annum over the next few years.

Andrew Cahn, chief executive of UK Trade & Investment, says: “In these tough times it's more important than ever that we make the most of growing sectors like Islamic finance.

"That's why it is important the UK's financial industry provides an open door and positions London as a leading western financial centre for Islamic finance.”

Richard Raeburn, chief executive of ACT, says: “A reduction in funding options with markets offering continually more expensive rates means that seeking alternative funding away from the traditional routes is an increasing trend.

"Islamic funding may not have been at the forefront of borrowers’ minds but the credit crunch has made an understanding of this market essential.”
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edeus rumoured to be going into administration

Rumours are rife that edeus has gone into administration and that chief executive Michael Bolton has been made redundant from the firm.

Managing director Alan Cleary is thought to still be at the lender.

Nobody from edeus was available to comment.

edeus launched into the mortgage market in a blaze of glory in July 2006 with Michael Bolton and managing director Alan Cleary (both former HBOS employees) at the forefront of the firm.

The duo assembled an all star team from across the industry and were even
one of the first firms to adopt ‘eu’ at the end of the firm's website and email
address.

The new lender was an overnight success and edeus soon became the fastest growing new entrant the mortgage market had ever seen.

But the freeze in the credit markets quickly put paid to the ultimate Bolton and Cleary dream ticket.

edeus was quick to retaliate to market conditions and after successfully recruiting over 100 staff from rival lenders soon had to put out the fire with a swathe of redundancies in November last year.

By April this year another 50 jobs had gone to the wall.

In July 2008 it started to offer its now renowned and since copied Golden Goodbye offer to borrowers on its books. It also started to offer structured savings products from Newcastle Building Society.

Bolton and Cleary unveiled the name of their new lender edeus in July 2006, officially launching in September 2006.
Bolton said at the time the firm had been looking for a name that emphasised innovation, that was challenging and “would echo our core brand values of excellence, service, quality and speed”.

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