In less than a decade, Bank of London and the Middle East (BLME) has risen from relative obscurity to become Europe’s largest standalone Islamic financial institution.
Set up in 2006 by investors in Kuwait’s Boubyan Bank, BLME’s mission statement was to take advantage of lucrative capital flows between the UK and the Gulf by providing services including wealth management and asset-based lending.
The bank, which has around $100m in assets under management, is now betting big on future growth in the region, with the opening of its first Dubai office and a listing on the NASDAQ Dubai bourse. It is now looking to take advantage of exponential growth in the Islamic bonds market, as well growing inflows of capital from the Middle East towards the British capital.
Its success, today, however is a far cry from 2006, when its founder sat down with the intention of creating “the pre-eminent Islamic bank in London”.
“We started off with a blank piece of paper with just ‘BLME’ on it,” recalls founder and CEO Humphrey Percy.
One of the lender’s first points of order, he says, was that it was not going to go out and hire seasoned Islamic bankers, of which there is something of a dearth in London, despite its unofficial status as one world’s capitals for Islamic finance.
“I thought, ‘if I’m going to build a bank, where am I going to get the people from?’. Do we go to Dubai or go to other Middle Eastern centres and find them just waiting to be picked up at the bus stop as it were? I knew already from my experience in the Middle East already that that wasn’t going to happen.”
Instead, Percy chose to build the company around bankers with solid expertise in conventional finance, whose skills were then converted to Islamic finance. BLME’s management team today consists of veterans of both conventional and Islamic flavours of banking, while Percy himself spent more than 30 years at institutions including Barclays Merchant Bank and J Henry Schroder Wagg.
Percy says that BLME’s philosophy is to “provide a bridge between London and the Middle East”. “The idea was and remains to be a modern merchant bank providing services and products both in the UK market and also into the Middle East,” Percy says. “So we can then harness and get involved in capital flows and savings, investments and also provide finance in both directions.”
Its clients include high net-worth individuals in both markets who wish to invest according to Islamic sensibilities, such as avoiding speculation and practices prohibited by the religion, which is often extended into other services such as prime property sourcing and corporate banking. “Those same individuals have their own private businesses, and what can start as a private banking relationship can move into a commercial banking relationship, or vice versa,” Percy explains.
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