Arab Banking Corporation launches Islamic home loan with Bristol & West
One of the foremost banks in the Arab world, Arab Banking Corporation (ABC),
has entered into an agreement with one of the UK’s leading mortgage providers
to launch an Islamic home finance scheme tailored to the needs of the Muslim
community in the UK.
Through its London subsidiary, ABC will market the product under an Islamic
brand name, alburaq, that will also be used to market financial services in
the Arab world. Financing for the product and full backoffice support services
will be provided by Bristol & West (B&W), part of the Bank of Ireland
Group.
the agreement will bring togethe r Bristol & West’s expertise
in the UK housing market and ABC’s authority within the world of Islamic finance
to create a competitive and flexible product that will adhere strictly to
Islamic law.
the initial alburaq home finance packages are expected to
be available within the next three months. In essence, the y will enable the customer to become the coowner of a home alongside B&W, with future payments
structured to buy out B&W’s share while also paying rent for occupation
of the property. No direct loan is involved, enabling the customer to comply
with the strict Islamic prohibition on payments of interest.
the net cost of an alburaq package will be broadly comparable
to the cost of an equivalent mortgage, thanks in part to last year’s Budget
which exempted coownership schemes along the se lines from the need to pay
double Stamp Duty.
the UK has a large and growing Muslim community, with many
households likely to opt for a financing package that will comply with the ir
religious beliefs.
Keith Leach, a senior manager at ABC said: “We are very excited
to be working with Bristol & West to launch the alburaq brand and home
finance product in the United Kingdom. I believe our arrangement will offer
customers the best of both worlds, marrying our experience and knowledge of
Islamic finance with the Bristol & West’s undoubted reputation as a leading
provider of home finance."
Julie Blunden, head of market development at Bristol &
West said: “Working with Arab Banking Corporation has given us a valuable
insight into the financial needs of the Muslim community. This agreement furthe rs
our aim of ensuring that home ownership is accessible and affordable for anybody
who wishes to purchase the ir own property”
