Facts & figures
As the UK’s leading provider of Sharia compliant retail banking products, Al Rayan Bank is uniquely positioned within the UK Muslim marketplace. Working with organisations such as data experts, Experian and research specialists, 2Europe, the Bank has developed a clear picture of this diverse, young and growing audience.
Some of the primary findings are documented below:
The UK Muslim market
The study ‘Understanding the market, understanding the potential’ was produced for Al Rayan Bank, under its previous name Islamic Bank of Britain (IBB), in spring 2012 by Experian, the global information services company, drawing on its data insight and analytics expertise.
Using a combination of public, modelled and research data, Experian estimates that:
- The UK is home to 1,530,000 Muslim adults, which represents 3.1% of the UK adult population.
- There are 764,000 Muslim households in the UK, representing 3% of the UK household population.
- The highest populations of Muslim adults are in:
- Greater London postcode area - 428,000 Muslim adults representing 8.9% of the county’s adult population.
- Birmingham postcode area – 137,000 Muslim adults representing 9.7% of the city’s adult population.
- City of Manchester and Oldham postcode areas (both part of the Greater Manchester area) – 92,000 Muslim adults, representing 17.37% of the combined adult population for the two areas.
- Bradford postcode area – 71,000 Muslim adults representing 16.55% of the city’s adult population.
- Blackburn postcode area – 39,000 Muslim adults representing 10.51% of the town’s adult population.
- The UK Muslim population is disproportionately young when compared to the UK population as a whole. 72.4% of adult Muslims are aged 18-45, compared to 51.5% of the whole UK.
- The UK Muslim population has a disproportionately high number of households with children under the age of 18 years. 72.1% of Muslim households have children under 18, compared to 40.6% for the whole UK.
- The majority of British Muslims are economically active: 59.1% are in full-time employment, compared to 50.3% of the overall UK adult population, and 15.7% of
- Muslim adults are classed as ‘Part-time/Housewife’ compared to 16.8% for the overall UK adult population.
- 49.7% of Muslim adults earn less than £20,000 per annum (p.a.), compared to the 53.1% of UK adults overall. 43.2% earn between £20,000 and £50,000, compared to the 39.5% of all UK adults. 7.1% UK Muslim adults earn over £50,000 which is similar to the overall UK picture which shows that 7.4% of adults earn in excess of this figure.
- The majority, 59.5%, of Muslims live in owner-occupied properties. This is under the figure for all UK adults which is 67.9%.
- To support Experian’s findings, the 2011 Census of England & Wales identified the following:
- The total population, including children, of England & Wales is 56.1 million.
- There was a 3.7 million rise in population between 2001 and 2011, 2.1 million being from immigration.
- ‘Muslim’ is the second highest religion behind Christianity and ‘no religion’. 2.7m people are Muslims, up from 1.5m in 2001. This represents 4.8% of the population, up from 3.0%.
- The most frequent countries of birth from outside of the UK include:
- India (1): 694,000 in 2011, up from 456,000 in 2001
- Pakistan (3): 482,000 in 2011, up from 308,000 in 2001
- Bangladesh (6): 212,000 in 2011, up from 153,000 in 2001
- People of Asian origin are up 2.5%.
- London is the most ethnically diverse region with 44% of the population describing themselves as ‘White British’.
- Manchester is one of the fastest growing populations with an increase of 19% from 2001 to 2011.
Attitudes to Islamic finance
The first national survey to look into British consumers’ understanding of, and attitudes towards, Islamic finance was conducted in August 2013 by independent research company, 2Europe, on behalf of Al Rayan Bank, under its previous name Islamic Bank of Britain (IBB).
- A high level of support for Islamic finance, amongst both Muslim and non-Muslim consumers, was reflected in the survey findings:
- 66% of those surveyed felt that Sharia compliant finance is appropriate in a modern western society, such as the UK.
- 65% understood that the way Islamic banking works is different to the way conventional banking works.
- 60% agreed that Sharia compliant finance is relevant to all faiths (N.B. within this figure there was no significant difference in attitudes by individuals of different faiths with the majority of non-Muslims surveyed – 57% – agreeing that Islamic finance is relevant to UK consumers of all faiths).
- 57% knew that Sharia compliant finance is a system in which the Islamic banks pay profits rather than interest on savings products, and charge rent not interest on their home finance products.
- 58% considered Islamic finance to be an ethical system of finance and one which considers the impact of its activities on society.
- 53% understood that Sharia compliant finance is based on ethical principles that are derived from trade, entrepreneurship and risk-sharing.
- 81% of Al Rayan Bank’s customers are likely to use Sharia compliant finance again; the results being the same for Muslim and non-Muslim customers. A specific focus on the 200 Muslim customers and prospective customers surveyed showed that:
- 36% of Muslims currently use Sharia compliant finance, of which 9% use it exclusively.
- A further 45% of Muslims, who don’t currently use Sharia compliant finance, are likely to consider doing so in the future.
300 British Muslim and non-Muslim consumers throughout the UK were questioned; a third of all respondents (i.e. 100) were non-Muslim and a third of all respondents were a combination of Muslim and non-Muslim customers of Al Rayan Bank. Al Rayan Bank customer data was provided randomly by the Bank and prospect data was sourced randomly by 2Europe from accredited third party sources.
The growth of the Bank
2016 was the most profitable year in Al Rayan Bank's history. Pre-tax profits rose by more than 32% to £8.2million. The results continue the Bank’s upward profitability trajectory that was set in motion when the Bank was acquired by Masraf Al Rayan, QSC (MAR) in February 2014.
Highlights from the Bank’s Annual Report include:
- Customer financing increased by 43% to £1.44bn and includes:
- Home Purchase Plan (HPP) financing, which increased by 41% to £637m
- Commercial Property Finance, which increased by 44% to £393m
- Retail deposits grew by 67% to over £1.2bn
- The Bank’s investments in Sukuks (Islamic bonds) increased by 38% to £167m
- Islamic assets represent about 1% of the global financial market.
- The global market for Islamic financial services, as measured by Sharia compliant assets, is estimated by the UK Islamic Finance Secretariat (UKIFS) to have reached $1,460bn at end-2012. This represents a 222.5% increase since 2006, when assets totalled £462bn.
- The UK is the world’s ninth largest market, the leading Western country and Europe’s premier centre of Islamic finance with $19bn of reported Sharia compliant assets.
- More than 20 international banks operating in the UK are working in Islamic finance, 6 of which are fully Sharia compliant.
- The London Stock Exchange has raised a total of US$34 billion through 49 issues of Sukuk.
- The UK has the largest legal services market in Europe and around 25 major law firms with offices in the UK are supplying Islamic legal services.
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