Britain plans to reissue Islamic bonds in 2019, a government official told Reuters, in a sign the country’s exit from the European Union may accelerate plans to develop an Islamic finance industry.
In 2014, Britain became the first Western country to issue an Islamic bond or sukuk, raising £200mn ($268mn) from a five-year deal that was 10 times oversubscribed.
British government officials said at the time this was a one-off transaction rather than part of a regular programme.
But a Treasury spokesperson said the UK government now planned to reissue the bonds when they mature in 2019.
“The UK is the leading Western centre for Islamic finance and the government is committed to ensuring the future success of the sector,” the Treasury spokesperson said.
Brexit could threaten London’s dominance as a financial centre by potentially making it more difficult for London-based companies to sell products across the EU.
A Reuters survey showed around 10,000 finance jobs may shift out of Britain or be created overseas in the next few years because of Brexit, with Frankfurt and Paris benefiting most.
Bilal Khan, co-chairman and partner at London-based Islamic finance consultancy Dome Advisory, said developing Islamic finance was one way to counteract this, by strengthening London’s ties with Southeast Asia and the Gulf, the world’s two top centres for Islamic banking.
Islamic finance follows religious principles such as bans on gambling and outright speculation, with interest-bearing products deemed off-limits.
There are more than 20 firms in Britain that offer Shariah-compliant financial products, the most of any other Western country.
This includes five Islamic banks: Gatehouse Bank, Qatari-owned Al Rayan Bank, Bank of London and the Middle East , Abu Dhabi Islamic Bank and a unit of Qatar Islamic Bank.
Issuance of sukuk globally stands at around $342 billion. On the London Stock Exchange there are 65 sukuk listed totalling $48 billion, making it a major listing centre.