Introducing Al Rayan Bank plc Keith Leach Chief Commercial Officer alrayanbank.co.uk Banking you can believe in Introducing Al Rayan Bank First wholly Sharia compliant retail bank alrayanbank.co.uk Banking you can believe in Introducing Al Rayan Bank UK’s First wholly Sharia compliant retail bank Head office in Knightsbridge Founded in 2004 Over 60,000 customers Background 140 employees Over 30 products Formerly Islamic Bank of Britain Member of FSCS Authorised & regulated by FCA & PRA Part of MAR Oversight via SSC & SCO Asset backed & based Sharia compliant Our values Islamic Different Operates without interest Professional Finance Never invest in prohibited areas Pioneering Aspirational Secure Based on trade entrepreneurship and risk sharing ‘Banking you can Believe in’ Ethical alternative to conventional Muslim and Non-Muslims alrayanbank.co.uk Banking you can believe in Introducing Al Rayan Bank Rapidly growing (3% to 5% in 10 years) 1.53M adult UK Muslims. 76% target UK Muslim market 70% of Muslim non-users would consider 36% of Muslims use Islamic finance Young, have children, employed, less affluent than average Retail – banking, savings & home finance Financing up 54% Deposits up 62% Business – banking and property finance Online sales up 48% Wide product range GCC – property finance Total assets €857m Sustained growth HNW – wealth mgmt & premier banking 8 branches & agencies Outstanding Integrated, multi channel customer Online and telephone banking service Strong customer loyalty UK based, multi-lingual call centre alrayanbank.co.uk Banking you can believe in Al Rayan Bank’s key milestones 2004 2005 2006 2007 2008 A further four branches IBB is the first standalone Online banking is IBB launches an IBB launches the Home are opened across the Sharia compliant Bank to launched, expanding Internet savings Purchase Plan UK receive an FSA Licence reach beyond the branch account network IBB launches additional The first branch is opened IBB launches further IBB launches its Young savings products including in London products including a Persons Savings the 60 Day Notice Current Account and Account and Wakala unsecured finance for Treasury Account personal and business customers The Bank launches its first IBB launches its first Following the credit Telephone and postal ever commercial property savings account crunch, the Islamic model banking are launched finance product of banking proves more resilient than the conventional banking model alrayanbank.co.uk Banking you can believe in Al Rayan Bank’s key milestones 2009 2010 2011 2012 2013 2014 2015 The UKs first IBB announces Al Rayan Bank IBB launches its IBB adds Wealth The Buy to Let Masraf Al Rayan Sharia compliant that Masraf Al posts best Premier Banking Management Purchase Plan is (MAR) announces ISA is launched by Rayan has financial Service Services to its launched its intention to IBB become the new performance . HPP is launched proposition Home Purchase purchase parent company Operating income in Scotland Plan Premier majority +168%; customer aimed at GCC shareholding IBB works with financing +86%; IBB launches its clients is added the UK retail deposits Fixed Term to the Premier IBB launches the Government to +59%. After tax Deposit Savings proposition 120 Day Notice provide a HPP profit of £1.2 Accounts Account backed by the million. Help to Buy IBB’s table Guarantee Al Rayan Bank topping FTD opens proves to be IBB is rebranded Knightsbridge popular. The as Al Rayan Bank branch for majority of new to more closely Private and customers are align it to Masraf Premier non-Muslim Al Rayan . customers alrayanbank.co.uk Banking you can believe in Products The Bank has launched and continues to offer an extensive range of products 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 • Current • Young • Internet • Home • HPP in • Wealth • Buy to • 120 Day • Notice • Help to • Fixed Account Persons Savings Purchase Scotland Services Let Notice Cash ISA Buy HPP term ISA Savings Account Plan Purchase Account Plan • Property Develop ment finance • Personal • CPF • 60 Day • Fixed • Home Finance Notice Term Purchase Account Deposit Plan Savings Premier Accounts • Business • Wakala Finance Treasury Account alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 The Bank after 10 years ► Renamed Al Rayan Bank in Dec 2014 ► Capital increased to £100m ► Assets to exceed £1billion before year-end 2015 ► 2014 was the first year of full profitability ► Within 4 years assets to exceed £2billion ► Highly experienced strong board alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 Business model ► Grow existing retail banking business ► Develop Private Banking for HNW ‘Arab’ clients ► Build UK real estate asset book ► Expansion into Europe, Paris, Germany and Italy? ► Significant growth in the balance sheet over the next 5 year alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 Business model - Funding ► Attract retail deposits to fund asset growth ► Attract new deposits through Private Banking ► Seek a credit rating to attract institutional deposits ► Issue a real estate backed Sukuk? ► Continued support from our parent bank alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 Business model – Asset growth ► Home finance products ► Owner occupier; Investment property; Buy to Let ► Help to Buy Scheme (backed by the UK Government) ► Residential finance to non-UK buyers in the UK ► Commercial property finance for UK and non UK investors ► Commercial Investment property ► Residential investment property ► Residential development property alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 A modern fast growing bank ► Modern systems with on-line banking ► Soon to be launched mobile banking platform ► Cloud based sales and marketing platform ► Contact less payment cards ► New ‘flagship’ Knightsbridge Branch alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 Modern relevant products ► Selection of table topping savings products frequently offer the highest returns in the UK ► ISA savings accounts for tax efficient saving ► Help to Buy scheme supported by the government ► Children’s savings accounts ► Discretionary Portfolio Service ► Provides access to Islamic will writing service alrayanbank.co.uk Banking you can believe in Distribution channels Branch/Agency Distribution channels Online banking Intermediary Contact Centre SelfSelf Service Service alrayanbank.co.uk Banking you can believe in Distribution channels Online • Partnership with aggregators In 2013, Al Rayan Bank began a programme to drive • MoneySupermarket.com online sales: • Moneyfacts.com • A brand new, fully mobile responsive, website • Money.co.uk • Significant conversion enhancements to online • LoveMoney.com customer acquisition process • Advanced web call tracking • Targeted pay per click advertising: • Google Adwords and Display Network • Bing Ads • Facebook and Twitter advertising • Social engagement with prospects • Facebook • Twitter • Linked IN • Google Plus • Video and animation on website and through YouTube alrayanbank.co.uk Banking you can believe in Distribution channels On-line marketing ► Drives clients to the website or call centre ► Highly successful in attracting depositors through use of the ‘best buy’ tables ► 80% of our long term savers are non-Muslim and accounts in the source of nearly 60% of our long- term savers alrayanbank.co.uk Banking you can believe in Al Rayan Bank - 2015 alrayanbank.co.uk Banking you can believe in Strategy has generated a twenty-fold increase in direct sales in four years alrayanbank.co.uk Banking you can believe in alrayanbank.co.uk Banking you can believe in alrayanbank.co.uk Banking you can believe in Evolution of Islamic finance in the UK alrayanbank.co.uk Banking you can believe in Evolution of Islamic finance in the UK Financial Exclusion ► 2 – 3 million Muslims living in the UK ► Many living in deprived areas with high unemployment and a disaffected youth ► Led by the new Labour Government in 1997 ► Supported by Sir Eddie George governor of the Bank of England ► Government headed working party formed to examine barriers to entry alrayanbank.co.uk Banking you can believe in Evolution of Islamic finance in the UK Economic reasons ► Strong liquidity in the oil producing states resulted in the rapid growth of Islamic finance in the region ► UK plc saw the potential for large capital inflows as a global financial centre ► The law and tax changes seen as a result of the developments in the domestic market supported the City’s case that the UK is open to Islamic finance alrayanbank.co.uk Banking you can believe in Evolution of Islamic finance in the UK Tax and regulation ► The biggest obstacle in Western economic systems is the taxation environment ► In Islamic finance the buying and selling of ‘real’ assets creates a taxation impact ► There is a requirement to create “level playing field” so that the Islamic finance transaction is treated as a finance transaction ► In UK nearly every Finance Act since 2003 has had taxation legislation to adjust for sharia compliant products alrayanbank.co.uk Banking you can believe in Taxation regime 2003 2005 2006 Finance Act 2003: Relief Finance Act 2005: Alternative • VAT treatment of Islamic from double Stamp Finance Financial Products Duty Land Tax “SDLT” Arrangements: (Murabaha, Mudaraba, on Home Finance • Profit Share Return Musharakah, Wakala and Murabaha and Ijara “Mudaraba” Ijara) • Alternative Finance Return Products • Finance Act 2006: Extend