Masraf Al Rayan’s wholly-owned UK subsidiary Al Rayan (UK) has acquired Shariah-principled Islamic Bank of Britain (IBB), more than a year after it made the first attempt.
Through this acquisition, Qatar-based Islamic bank – with assets worth QR67bn as on September 30, 2013 – aims to make inroads into the UK and continental European markets.
The IBB acquisition follows a cash offer from Al Rayan (UK) on November 28, 2013 for which the acquirer received valid shareholder acceptances exceeding 95% together with the approval of the prudential regulatory authority to take control of IBB.
“This provides the opportunity for Masraf Al Rayan to expand its footprint and introduce its range of products to a fertile market which has great potential for continued growth,” its group CEO Adel Mustafawi said in a communiqué to the Qatar Exchange.
It will also enable Masraf Al Rayan to offer its existing Gulf-based customers additional services as they expand their activities into the UK, the bank said, adding Masraf Al Rayan’s vision is to become a leading and innovative international financial institution and acquiring IBB represents an important step in achieving this.
Both the lenders had reached an agreement on the terms of a recommended cash offer made by Al Rayan (UK), a limited liability company incorporated in England and Wales, for the entire issued and to be issued share capital of IBB.
Masraf Al Rayan offered £24.1mn and each IBB shareholder was entitled to receive 0.53 pence in cash for each IBB share, which IBB considered as “fair and reasonable”, according to the offer document of Masraf Al Rayan.
IBB is considered the pioneer in Islamic banking in Britain and has very strong awareness amongst consumers there.
Masraf Al Rayan’s move stem from its confidence that it could build a stronger bank that is more capable of exploiting enormous business opportunities available in the UK market for the benefit of its customers, shareholders, employees and the economies it operates in.
“Going forward, IBB will have a parent company which has a clear focus on how to develop the bank as well as having the necessary resources to achieve this. We look forward to continued success as part of the Rayan group,” said Sultan Choudhury, interim managing director of IBB.
The acquisition would give Masraf Al Rayan the opportunity to introduce its already developed financial products into the UK and continental European markets and provide the bank’s existing customers with additional services as they expand in the UK and Europe.
IBB offers Masraf Al Rayan the opportunity to invest in a financial institution with an established platform and with an existing client base of over 50,000 customers.
Masraf Al Rayan first made the offer in October 2012 when the previous offer from IBB’s majority shareholder International Islamic lapsed.
“As one of the leading banks in Qatar, we look forward to supporting the IBB in its growth plans by strengthening its balance sheet and position in the market,” Mustafawi had said at the time of making revised offer in November. Gulf Times