London is working hard for an increased share of the global Islamic finance market as the sector expands to a forecast $ 1.6 trillion in assets over the next three years. Boris Johnson, Mayor of London, said there were “huge opportunities” to strengthen the capital’s position in Islamic Finance after a meeting with the Malaysian Prime Minister Najib Razak.
London would be benefitted by the fact that it would be hosting the 9th World Islamic Economic Forum to be held from 29-31 October at the ExCel London, this would be the first time that the event will be held outside the Muslim world. The forum has been previously held in Malaysia, Kazakhstan, Indonesia, Kuwait and Pakistan, but London will be hosting the event for the first time in collaboration with London and Partners, the official promotion organisation for the city. Deals worth £ 5.8 billion are hoped to be signed in the regal event, expected to be attended by bigwigs of the Islamic finance industry. The key areas of focus at the upcoming forum in London would be Islamic banking and finance, technology, infrastructure development, health, exports, education and youth development. The prize for London is to garner a slice of these “shariah compliant” assets, which have grown by almost 50 percent in the last two years, from $ 826 billion in 2010 to $ 1.2 trillion in 2012, according to the TheCityUK, the finance sector lobby group. The figure is expected to rise by $ 1.6 trillion by 2015.
Gordon Innes, CEO of London and Partners, the official promotional organisation for the World Economic Islamic Forum (WIFE) said “We started liasing with the representative of WIEF and discussing that it would be great to bring the forum to a western city. They liked the idea and London was our first option as it has a huge Muslim population, international bureaus and a large number of corporates. Malaysian Prime Minister also said the choice of London was recognition “not only of London as a place of ideas and discourse but also a bastion of tolerance and inclusivity amidst an often divided world.” WIEF is a Malaysian based business platform that displays business opportunities in the Muslim world and strengthens exchange and collaboration between Muslim and non-Muslim countries
As of now nearly 25 law firms in the U.K offer Islamic finance expertise. The U.K. has three licensed Islamic banks, and 22 traditional banks now offer Islamic banking services. Some of the renowned banking giants such as HSBC, Royal Bank of Scotland and Barclays Bank offer Islamic banking services. However, the sector has its own share of problems with the economic slowdown and uncertainty caused by the Arab spring hampered recovery. The retail side of Islamic Finance has also been in the receiving end with HSBC closing Islamic retail banking operations in six markets in October 2012. The corporate finance business has however continued to expand, Farmida Bi, European head of Islamic finance for the law firm Norton Rose Fulbright, said “In the past, the majority of finance in the Gulf was conventional finance. That has changed phenomenally over the past 3 or 4 years with lots financing in the region moving to being wholly Shariah compliant. ”