Arab Banking Corporation’s UK banking operation Alburaq has paired up with the Bank of Ireland to offer the UK’s first Shariah-compliant structured deposit for Muslim investors.At the end of April, Alburaq plans to introduce a guaranteed equity bond, which will have a minimum investment of £500 and will be sold directly and via IFAs in the UK, and will be available to overseas investors.
Although the bank has not finalised details, it expects to launch the first issue in early May. One of the problems in launching a deposit that complies with Muslim financial principles is that to earn a return on capital a degree of risk is generally required, explained a source at the bank. The FSA is believed to have agreed non-standard wording to the contract to cover this deviation from the UK norm. The product has been in development for two years.
Full details will appear on the UK database in due course.
