Islamic insurance company Salaam Halal closes to new business UK

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Syed Zaib
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Islamic insurance company Salaam Halal closes to new business UK

Post by Syed Zaib » Thu Dec 24, 2015 2:29 am

So, as we now approach the sixth anniversary of IBB’s launch, I’m sad to finally have to admit that Islamic finance in the UK has been a huge flop. IBB may still be limping on as probably the last bastion of the cause, but it’s difficult to imagine it holding out for much longer.

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Since its inception IBB has never made a profit. Not once, not ever. Rather, the company has reported combined losses of almost £45 million (GBP), and its shares have lost more than 95% of their value since the highs enjoyed during the early years. But at least it’s fared better than many of its contemporaries in the industry. So what about the rest of the UK’s Islamic finance providers?

Well, the UK’s first Halal insurance firm, Salaam Insurance, spectacularly shut up shop in 2009 after less than 18 months of trading. Lloyds TSB, which made a half-hearted stab at Shariah-compliant products in 2004, doesn’t seem to have promoted its offering for years. alburaq – owned by Arab Banking Corporation – has effectively withdrawn its savings and mortgage products from the mass market and now serves only the wealthiest of customers.

Even HSBC Amanah, probably the most credible and efficient provider of Halal banking in the UK, has dramatically reduced its dedicated Islamic banking staff in Britain, and its marketing volume has been turned way down. Clearly things haven’t gone well for the UK’s fledgling Islamic finance market since the promise of the early noughties.

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There are now hundreds of Islamic finance companies around the Muslim world, and the industry has demonstrated consistent annual growth of between 15%-20%. So it was only a matter of time before venture capitalists in the West decided to throw their weight behind this potential cash cow.

Few realise that the people driving the establishment of Islamic Bank of Britain and Salaam Insurance were not Muslims. Rather it was European entrepreneurs, attempting to mimic the financial success of Halal finance companies in the Middle East, who got the ball rolling for these flagship Shariah-compliant corporations. The flowering of Britain’s Islamic banking movement had little to do with the Koran and much more to do with capital gains.
source: ummah.com
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