Al Rayan Bank posts a profit and announces its strongest performance to date

Al Rayan Bank PLC, (www.alrayanbank.co.uk), formerly known as Islamic Bank of Britain (IBB), today announced its strongest financial performance to date, resulting in the Bank more than doubling its operating income and posting its first profit since its inception in 2004.  Highlights from its 2014 Annual Report & Financial Statement include:

  • An 86% increase in total customer financing, to £450.3m, including;
    - Home Purchase Plan (“HPP”) financing which increased by 50% to £311.6m
    - Commercial Property Finance which increased by 304% to £138.5m;
  • A 59% increase in retail deposits to £509.8m and 53% increase in wholesale deposits to £31.7m
  • The transformation of a £5.5m loss (restated), reported for 2013, into a profit after tax of £1.2m
  • A 168% increase in operating income to £11.8m (£4.4m in 2013)
  • Increase in Core Tier 1 capital ratio to 36.1% (18.8% in 2013)
  • No evidence of impairment in the real estate finance portfolios

Al Rayan Bank’s achievements follow its acquisition by Masraf Al Rayan, QSC (MAR) in early 2014.  This was accompanied by a £75million additional investment by MAR and the implementation of a number of strategic initiatives in order to help the Bank achieve sustained profitability. These included:

  • Developing products that enable the Bank to secure higher value transactions  that deliver enhanced profitability, such as commercial and development finance
  • Driving process efficiencies and managing inherent risks including:
    - Enhancing online banking services with the automation of the ‘end-to-end’ application to drawdown process;
    - Significantly enhancing the Bank’s website, enabling it to be mobile device friendly, increasing its accessibility to existing and potential customers; and
    - The realigning of resources to those areas which deliver the greatest levels of risk return for the Bank.

Al Rayan Bank also received formal shareholder approval, in December 2014, for a change to its name and brand, in line with its new parent company. MAR has an extremely strong brand presence in Qatar and the Gulf Cooperation Council countries (GCC) and the name change will help to align Al Rayan Bank more closely with its parent, both internally and externally. It will also enable the Bank to grow both nationally and internationally by creating a unified brand for the Group. 

Commenting on Al Rayan Bank’s performance, Robert Sharpe, the Bank’s newly appointed Chairman said, “The financial year 2014 has been a momentous one in the Bank’s history and has laid the foundations for a prosperous future.  The £75 million additional investment from Masraf Al Rayan was a transformational event, the first results of which we have proudly announced today.  The Board believe that stakeholders in the Bank including shareholders, customers and employees have good reason to be optimistic about its future prospects.  This is based on Al Rayan Bank having a clear and balanced strategy to increase assets, liabilities and shareholder value, having a strong risk culture and a regulatory capital position that is well above the regulatory requirement.”
 
Sultan Choudhury, Chief Executive Officer, Al Rayan Bank, added, “Increasing consumer confidence, the continued strength of the housing market and opportunities to provide property finance to the commercial sector as well as to investors in the Gulf has enabled Al Rayan Bank to post its best results to date.  This has all been underpinned by the strong financial and strategic support of the parent company, Masraf Al Rayan.  We look forward to even better results in 2015.”

Al Rayan Bank opened its doors in 2004 as the UK’s first wholly, Sharia compliant retail bank. The Bank currently has over 50,000 retail, business and premier customers and has earned a reputation for providing innovative products which appeal to people of any faith.  

As an independent UK bank, Al Rayan Bank is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of Financial Services Compensation Scheme.

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