London, 5^th March 2018: The Islamic Development Bank (IsDB), one of the world’s largest multilateral development banks, is today hosting the 2018 Sukuk Summit – in partnership with the UK Government and London Stock Exchange Group – to convene experts and investors from across the world to discuss Islamic Finance and the Sukuk*.

The Sukuk is a bond designed in accordance with Islamic law which is structured to generate returns to investors without infringing on Shariah law, which prohibits taking or charging interest. The Sukuk market represents a key component of the Islamic financial system, which has grown at a double-digit rate for the last decade and reached approximately $3.5 trillion (£2.4 trillion) last year[1].

The Islamic Development Bank has today announced its funding plan for the first half of 2018, which is estimated at $2.5 billion -  the largest since the Bank's inception - where a benchmark sized Sukuk issue will soon be launched, subject to market conditions. The proceeds will be used to support infrastructure, education and health projects across the IsDB’s 57-member nations, which span across four continents and include 1 in 5 of the world’s population.

Today’s Summit brings together over 125 experts from government; senior management of supra-national institutions; representatives of central banks; representatives of international and regional banks; FinTech and academia in order to explore trends and opportunities in Sukuk-led Islamic capital markets.

Speakers at the Summit include:

• Rt. Hon. Sajid Javid MP, Secretary of State for Housing, Communities and Local Government
• H.E. Dr. Bandar Hajjar, President of the Islamic Development Bank
• John Glen MP, Economic Secretary to the Treasury and City Minister
• Nikhil Rathi, CEO of London Stock Exchange PLC
• Fahad Al Saif, Head of Debt Management, Kingdom of Saudi Arabia Ministry of Finance

The Summit is hosted at London Stock Exchange, with H.E. Dr. Bandar Hajjar, President of the Islamic Development Bank, formally opening trading in London with Sadiq Khan, Mayor of London, and Sultan Choudhury OBE, CEO of Al Rayan Bank, at 08:00. Following the main Summit, the Chancellor of the Exchequer will host a reception for delegates at Number 11 Downing Street.

The Summit’s location reflects the UK’s growing expertise in Islamic Finance and the UK Government’s support for the sector over a number of years. This has included the launch of the UK Government’s own £200m Sukuk in 2014: cementing Britain’s position as the western hub for Islamic Finance by becoming the first country outside the Islamic world to issue sovereign Sukuk. Furthermore, last month, Al Rayan Bank - the UK’s largest Islamic bank[2] - became the first bank in the world to issue a public Sukuk in a non-Muslim country. The Bank’s ‘Tolkien Funding Sukuk No.1 Plc’ is the largest ever Sterling Sukuk issued and the first UK RMBS issue to be structured on Islamic Finance principles.

Rt. Hon. Sadiq Khan, Mayor of London, said: “I’m proud that London has been chosen to host this summit, which reflects the capital’s emergence as a powerhouse in the Islamic Finance sector – an area which is driving positive and ethical change around the world. This is further evidence that London is open for business and open to investment from across the globe.”

Rt. Hon. Sajid Javid MP, Secretary of State for Housing, Communities and Local Government, said: “With over 1.6 billion Muslims worldwide, Islamic Finance is a massive global industry with huge economic potential to expand. The Government has long backed the development of Islamic finance in this country. So much so that back in 2014, Britain became the first Western country outside of the Islamic world to launch a sovereign Sukuk.”

 
“I look forward to having productive discussions with a wide range of partners at today’s summit and reaffirm this Government’s commitment to continue promoting the economic and community benefits and opportunities Islamic Finance offers.”

John Glen, Economic Secretary to the Treasury and City Minister, said: “Britain is open for business, and our support for Islamic Finance is a perfect example of our ambition to promote London as the financial centre of the world. We’re already recognised as the Western hub for Islamic finance and we’re committed to ensuring this continues.”

H.E. Dr. Bandar Hajjar, President of the Islamic Development Bank, said: “We called this Summit to bring together experts and investors from across the world to look in depth at the Sukuk. Sukuk are based on risk sharing contracts backed by real assets. We want to explore the great growth and investment opportunities that this product offers the whole finance industry - here in the UK, in our Member Countries and across the world.”

“We have seen growing numbers of investors attracted to the Sukuk market due to the diversification benefits for their portfolios. Furthermore, an IsDB Sukuk provides investors with a high degree of certainty that their money will be used for a specific purpose: developmental projects that have a positive, sustainable development impact.”

The Islamic Development Bank has an annual volume of operations above $10 billion and subscribed capital of $33 billion. In total, the IsDB has approved finance of $12.2bn in more than 250 projects. Turkey, Indonesia, Pakistan, Egypt and Turkmenistan are the bank’s top financing recipients, while sub-Saharan Africa has $3.1bn in funding approved.

Today’s Summit will be streamed live across the world – http://www.sukuksummit.org – from London Stock Exchange. All IsDB Sukuk are registered at the London Stock Exchange, with a programme size of US $10.25 billion and a “AAA” rating by the three major international rating agencies.

Nikhil Rathi, CEO of London Stock Exchange PLC, said:
“Today’s Summit builds on the success of the UK’s standing as the leading global hub for Islamic Finance and further demonstrates London Stock Exchange’s ability to offer international issuers access to deep liquid pools of investor capital. We are delighted to host IsDB, the Mayor of London, UK Government and the global Islamic business community, and proud to be the partner of choice for funding the growth of global Islamic Finance.”

[1] Data from Islamic Research and Training Institute (IRTI) 

[2] Al Rayan Bank is the UK’s largest Islamic bank by assets as per 2016 published accounts