Islamic Bank of Britain to raise £20m through share placing

Jul 27 2010 by Graeme Brown, Birmingham Post

The Birmingham-based Islamic Bank of Britain is raising £20 million through a share placing.

The funds will be raised through the placing of new one pence shares, to be subscribed by Qatar International Islamic Bank, an existing shareholder in Islamic Bank of Britain.

Meanwhile, the loss-making bank, which has its national headquarters in Edgbaston, has told investors that market conditions remain challenging and it is planning an efficiency drive.

Managing director Gerry Deegan said: “Qatar International Islamic Bank was instrumental in establishing Islamic Bank of Britain as one of the first Islamic banks in the west and this capital injection demonstrates its continuing commitment.

“This is very good news for Islamic Bank of Britain’s shareholders, staff and customers as well as for the Islamic banking sector in the UK.”

The Birmingham Post reported in March that the bank went further into the red last year following a downturn in revenues from investments on the Islamic interbank market.

It reported losses of £9.5 million, increasing its losses from £5.9 million in 2008, a drop which it said was down to ongoing market conditions.

The bank’s board of directors said they have been pleased with the levels of new business applications for last year.

However, this has not been reflected by a corresponding growth in the asset base due to the lack of capital and available funding.

In a statement, the group added: “The Company continues to face challenging trading conditions and continues to review its operating cost base in light of future plans and potential efficiency improvements.”