The Arab Banking Corporation and Bristol & West have joined forces to launch an Islamic home finance product.
Tailored to the needs of the Muslim community in the UK, the product will be marketed by ABC under an Islamic brand name, alburaq. Financing and full back-office support services will be provided by B&W.
The agreement will bring together B&W's expertise in the housing market and ABC's authority within the world of Islamic finance to create a competitive and flexible product that adheres to Islamic law.
Islamic law prohibits payment or receiving interest so no direct loan is involved. Alburaq will enable the customer to become the co-owner of a home alongside B&W, with future payments structured to buy out B&W's share while also paying rent for occupation of the property. The net cost of the package is broadly comparable to the cost of an equivalent mortgage.
B&W head of marketing Julie Blunden says: “Working with the Arab Banking Corporation has given us a valuable insight into the financial needs of the Muslim community. This agreement furthers our aim of ensuring that home ownership is accessible and affordable to anybody.”
ABC senior manager Keith Leach said: “I believe our arrangement will offer customers the best of both worlds, marrying our experience and knowledge of Islamic finance with the Bristol & West's undoubted reputation as a leading provider of home finance.”