Al Rayan Bank (UK) gets Aa3 rating from Moody’s in a first for UK Islamic banks

Al Rayan Bank has received an Aa3 rating from global ratings agency Moody’s Investors Service (Moody’s), a leading provider of credit ratings, research, and risk analysis.Al Rayan is the first Islamic bank in the UK to receive a public credit rating from the agency. Al Rayan Bank has pioneered Shariah-compliant retail banking in the UK and now offers the largest range of Shariah-compliant retail financial products in Britain. These include Shariah-compliant mortgage alternatives, the Home Purchase Plan (HPP) and Buy to Let Purchase Plan (BTLPP), current accounts and savings accounts. The bank was also the first to introduce Shariah-compliant business banking to the UK, and now offers a wide range of institutional and business banking products and services, including Commercial Property Finance. Several of the Bank’s products remain unique in the UK retail financial market. Citing Al Rayan Bank’s sound asset risk profile, robust capitalisation and sufficient liquid resources as credit strengths, Moody’s judged the Bank’s Counterparty Risk Assessment to be Aa3 (equivalent AA-). Its Baseline Credit Assessment (BCA) is judged to be A2 (A) with the support of its parent Masraf Al Rayan, and Baa2 (BBB) independently.  Commenting on Moody’s rating, Sultan Choudhury, CEO of Al Rayan Bank, said: “This credit rating marks an important milestone in the history of Al Rayan Bank. Since the acquisition by Masraf Al Rayan in 2014, we have implemented a growth strategy to strengthen the balance sheet and build a high credit quality and stable asset book. We very much value the on-going backing from our parent, Masraf Al Rayan, and the Qatar Investment Authority, both of which support our position in the UK. Moody’s credit rating recognises the significant progress that we have made in recent years.” Amir Firdaus, treasurer of Al Rayan Bank added, “The credit rating enables further diversification of the Bank’s funding. We will provide alternative opportunities for the wholesale markets that are competitive as well as ethical. Banks, local authorities, other institutional investors as well as our established retail customer base will be reassured by the strong credit rating that Moody’s has assigned to Al Rayan Bank, providing them exposure to the Islamic Finance markets.”  Al Rayan Bank, founded in 2004, has enjoyed unprecedented recent growth in recent years. The value of its assets increased by 450% between 2012 and 2016, while its liabilities book grew by 444% during the same period. As of 2016, the Bank’s financing asset-book was £1.4bn and is expected to pass £2bn in 2018. As an independent UK bank, Al Rayan Bank is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of Financial Services Compensation Scheme.