By Denise Marray/Gulf Times Correspondent/London
The launch of the Knightsbridge branch of Al Rayan Bank on Thursday evening took place on a day of relentless rain — but inside the impressive interior of the bank it was all sunshine and optimism. There is plenty to be optimistic about as CEO Sultan Choudhury made clear in his welcoming address to the large gathering of clients and guests enjoying the launch party.
Choudhury paid tribute to parent bank Masraf Al Rayan: “The positive impact of Masraf Al Rayan cannot be overstated. We built a business model that essentially required the fuel to take us forward. That is what Masraf Al Rayan has enabled us to do. They injected £75mn taking our capital up to over £100mn; but it’s more than just financial support. We have worked together in a very positive and supportive way; whether with regard to IT or product development, leveraging their relationships in the Middle East or leveraging our relationships here with the UK government — it has really worked very well,” he said.
“Qatar brings expertise on treasury and capital markets enabling us to build up a sukuk portfolio. We get investment yields which we never had before. Their knowledge on product development means we can leverage that without having to reinvent the wheel,” he added.
He said: “We had our take over in February last year; we broke even on a monthly basis within five months and we posted a profit at the end of the year. We more than doubled our income last year.”
Al Rayan Bank reported a profit after tax of £1.2mn in 2014.
Choudhury emphasised that Al Rayan’s retail operations remain the bedrock of the bank, while its new business directions will add to existing strengths. “For the first time last year our commercial real estate finance grew as much as our retail asset book and that made a big difference in terms of reaching profitability,” he said.
“This is about targeting affluent customers from this wonderful location to build more income for the business and providing a service that we think is required. We can offer transactional services from something as simple as a debit card to a branch network; some of our competitors who are subsidiaries of overseas banks just can’t do some of the basics of transactional banking,” he said.
The model of the bank and ethos of the staff were fundamental to its success, he emphasised. “There is a genuine, deep felt commitment to do things right. The regulator talks about ‘good conduct’ — we have our Shariah-compliant principles and committed staff coupled with how the board works.”
Keith Leach, chief commercial officer, said the establishment of the Knightsbridge branch, situated in a prime location right opposite Harrods, “shows the commitment of the shareholders to grow the business.”
“We are now in a position to capitalise on the fundamental, solid underlying business which has taken a number of years to develop. We can introduce new products, bigger ticket deals; all being well you should see quite a rapid escalation in our assets and the amount of financing that we are providing, and that will filter through to the bottom line over successive years,” he commented.
“We are developing a new private banking service; one of the advantages the bank has is the infrastructure that was established when we were just a retail bank in the UK. So we have facilities such as contactless payment cards, online banking, and we are developing an App so our clients can access their bank details on their mobile phones. These are the sort of facilities that I think some of our competitor banks will struggle to match. They are here primarily just to service a few high net worth clients when they visit London. We have got the infrastructure to service these clients with the technology we have developed to meet the UK requirements also,” he explained.
He added: “We have got about 60,000 clients and interestingly over 80% of these are non-Muslim. That’s a testament to the strength of our product range.”
Some of the clients present at the launch spoke to Gulf Times about why they choose to bank with Al Rayan.
Vojkan Brankovic of Obligo Investment Management said: “Al Rayan is the perfect partner for us. We are a fully Shariah-compliant investment fund — our clients are mostly from the Middle East. We are one of the few in the UK focusing on the social housing side. For us it was very important to find a bank which could provide Shariah finance. We are based in Mayfair, so the Knightsbridge branch is very convenient for us. They have a very professional team who have been there to support us during open hours and beyond, always putting in the necessary resources and time.”
Naomi Heaton, chief executive, London Central Portfolio Limited (Lcp) said: “I’ve known the bank for many years. We feel there is a fantastically strong, proactive team, particularly on the private client, commercial lending side of things. We have property funds — Shariah residential funds — in target prime Central London. Al Rayan understands Central London and the kind of people who invest in our property funds. They are easy to talk to about structuring and developing the kind of bank facilities that we need.”
