BLME was first incorporated in London on 7 August 2006, originally under the name House of London and The Middle East, changing to Bank of London and The Middle East in July 2007. Humphrey Percy, Founder and CEO, met with the original sponsors, Boubyan Bank, establishing their common ambitions to build a market leading wholesale Islamic bank. BLME received authorisation from the Financial Services Authority in July 2007 with a full set of permissions and European passporting. Since its launch the bank has grown significantly. In 2008 BLME completed their second private placement bringing their total capital base to £250million. BLME launched their Wealth Management division including a Private Bank and Asset Management offering in early 2009. Since its establishment, BLME has won numerous awards for its services, including several from Islamic Finance News Awards: Best Islamic Bank in Europe, Best Islamic Bank in UK Best Islamic Leasing Provider and Deal of the Year. BLME was also awarded the WIBC Institutional Excellence Award in 2009. In 2011, 2012 and 2013 BLME was awarded Best Islamic Bank in Europe by Global Finance Magazine. In 2013 BLME won Reuters/Zawya Best International Asset Manager of the year award.
Islamic Finance
Islamic finance is a very large and fast growing industry, which is predicted to be worth $5 trillion by 2015. Sharia’a-compliant financing avoids speculation, short selling and excessive credit creation whilst encouraging sound risk management procedures. Complying with Sharia’a also means that BLME does not invest in activities prohibited by Sharia’a or against the public interest, including arms production or trade, alcohol, pornography and gambling. Under Sharia’a law, interest is usury and thus haram. Islamic finance therefore prohibits the payment or acceptance of interest charges for the lending and accepting of money. There are four main types of contract used by Islamic financial institutions in the UK:
Ijara is a bilateral lease contract allowing the transfer of the use of an asset rather than the sale of the asset. This contract can be structured so that the ownership is transferred to the lessee at the end of the original agreement.
Mudarabah is a partnership contract, where one party provides the funding and the other, usually a financial expert, manages the project, after which the customer and the bank share any profits.
Murabaha is a form of credit, enabling the customers to make purchases without taking out an interest bearing loan. It is a cost plus financing transaction which includes an agreed profit margin, where the payment is deferred for an agreed period of time.
Musharakah is a flexible partnership contract between two or more parties who all contribute capital towards the funding of a project or asset. Profits are pre-agreed, with any losses being shared on the basis of the contributed capital.
BLME and Sharia’a Compliance
As an Islamic bank, BLME ensures that its services are wholly Sharia’a compliant and uses this principle to underpin all of its practices. From the very beginning, the bank has had a dedicated a Sharia’a Supervisory Board to review contracts and agreements. This ensures that all policies, practices and governance are in compliance with Sharia’a and Islamic jurisprudence, rooted in transparency, fairness and clarity. This Sharia’a specific regulation and governance is in addition to the conventional regulation that applies to all UK based financial institutions.
Key Areas of activity
Corporate Banking
Corporate Banking at BLME provides a full suite corporate banking offering that includes property finance, leasing, acquisition finance, asset based lending finance and trade finance. Clients range from family business to multinational corporations; they work in a variety of business sectors including online shopping, real estate, transport, energy, health care and technology.
Wealth Management
Private Banking
BLME provides a private banking service that centres on property acquisition, sourcing and finance for high-net-worth individuals.
Asset Management
BLME launched the first Sharia’a $ Income Fund at the start of March 2009 which has its own SSB. In 2011 BLME launched two new funds: the BLME High Yield Fund and the Light Industrial Building Fund. In February 2011 BLME launched a Sterling and Euro share class for the US Dollar Income Fund.
Islamic capital markets focus on structuring and distribution of Sharia’a-compliant assets. BLME manages large club transactions in equipment leasing and property. Treasury BLME's treasury management is responsible for the funds of the banking division and manages liquidity. Moneyfacts Awards 2018 Best Fixed Account Provider: Winner
