HSBC, Lloyds Banking Group: Defeat on Islamic banking
By Will Peters Available at: http://www.economy-news.co.uk/lloyds-banking-group-21201006.html
Lloyds Banking Group accused of ‘half hearted stab’ at Islamic finance provision. Lloyds Banking Group and HSBC Holdings have reportedly had to scale back their march into Islamic finance.
A report in this morning’s edition of the Times says Lloyds Banking and HSBC have failed to make much of an impact with their Sharia-compliant products which were set up to appeal to the UKs 2 million strong Muslim population.
The Times quotes Junaid Bhatti, a founder of the Islamic Bank of Britain, as saying HSBC Holdings and Lloyds Banking Group were seen as having made the most effort in trying to corner this niche market. “Lloyds, which made a half-hearted stab at Sharia-compliant products in 2004, doesn’t seam to have promoted its offering for years,” says Bhatti.
Lloyds Banking Group to acknowledge that while it no longer markets its Islamic products they are offered in detail on the Lloyds website.
HSBC Holdings says its Sharia accounts were growing 15% a year. Lloyds Banking had no figures to divulge on the issue.
Mohammad Qayyum, the director general of the Institute of Islamic Banking and Insurance in the UK said that the main problem the banks face is pricing – the products are too expensive – and standard alternatives are a much more attractive option.
However the Times reports that there could be legislative changes on the cards that will allow the likes of Lloyds Banking Group and HSBC Holdings to offer Islamic finance at reduced prices. The Treasury has made changes in the tax law to accommodate Sharia Qayyum says, The FSA (soon to be redundant) is also reportedly consulting on a new framework for issuance and regulation of sukuk bonds.
The Rock of Gibraltar “Jabal Tariq”.