The UK’s status as the leading Western centre for Islamic finance will be confirmed today (28 April 2016) when ministers, central bank governors, and regulators from around the world meet in Manchester to discuss the sector’s growth.
Co-chaired by the Economic Secretary to the Treasury, Harriett Baldwin, and the Foreign and Commonwealth Office Minister for State, Hugo Swire, the third annual meeting of the Global Islamic Finance and Investment Group (GIFIG) will focus on global efforts to break down the barriers restricting the Islamic finance sector’s growth.
First convened by the UK government in 2014, the GIFIG highlights the pivotal role the UK has played in coordinating global leaders in Islamic Finance and driving innovation across in sector.
Economic Secretary to the Treasury Harriett Baldwin said:
The government is determined that the UK cements its status as the leading Western hub for Islamic finance.
The sector is already worth around £1.4 trillion globally and has the potential to grow further. It has a crucial role to play in encouraging financial inclusion, bringing underutilised capital into use, supporting the real economy and driving innovation.
Today’s meeting is a fantastic opportunity to strengthen bonds with other key countries and support the development of Islamic finance sector across the globe.
Foreign Office Minister of State Hugo Swire said:
The UK continues to be a leading Global Islamic finance centre.
The Global Islamic Finance and Investment Group has been an invaluable forum in allowing key figures to work collectively to tackle the issues that face the Islamic Finance sector.
The Group paves the way for innovative growth, which has meant that Islamic banking assets is forecasted to grow by 19.7% a year to 2018.
Today’s Global Islamic Finance and Investment Group meeting will build on the government’s previous work in this area and is the next step in ensuring a competitive, growing Islamic finance sector across the globe. It will focus on:
- current macro-economic conditions in the Islamic finance market and the impact of the low oil price;
- market conditions and the challenge of liquidity, including the Bank of England’s Sharia compliant facilities project
- the nexus of Islamic finance with the real-world economy, with reference to UKEF’s guarantee for the Emirates Airline issued Sukuk
The summit marks the latest milestone for Islamic finance in the UK over the past two years. Previous milestones include:
- June 2014: the government cemented the UK’s position as a global centre for Islamic Finance by becoming the first country outside the majority Muslim world to issue sovereign Sukuk for £200 million. It received very strong demand, with orders totalling around £2.3 billion - nearly 12 times oversubscribed.
- March 2015: UK Export Finance guaranteed its first Sukuk bond. This guarantee was for the 10-year US$913 million Sukuk bond issued by Emirates Airlines and was used to finance the acquisition of 4 Airbus A380 aircraft. This is the largest ever capital markets offering in the aviation sector with an export credit agency guarantee.
Today: Over 20 international banks operating in the UK offer Islamic Finance products and the UK has the largest legal services market in Europe, with over 20 law firms supplying legal services relating to Islamic Finance for global and domestic markets.