Islamic Bank of Britain eyes new business

Islamic Bank of Britain eyes new business
Updated 24 June 2014

Islamic Bank of Britain eyes new business

Islamic Bank of Britain eyes new business

LONDON: Islamic Bank of Britain (IBB), the country’s only Shariah-compliant retail lender, plans to broaden its product range to win business both locally and across Europe, aided by the backing of its new Qatari shareholder.
IBB is developing its commercial property business to widen fee-based income as it aims to post a profit for the first time, newly-appointed CEO Sultan Choudhury said.
“The acquisition was a watershed moment for us, what it means is that we will be adjusting the direction of IBB. We will shift to a much stronger focus on commercial banking,” said Choudhury, who previously served as interim managing director.
The lender was acquired in January by Masraf Al-Rayan, Qatar’s largest Islamic bank by market value, which in February injected 75.8 million pounds ($129 million) into IBB to support its expansion plans.
Birmingham-based IBB has around 50,000 customers and 380 million pounds worth of retail deposits, but it has struggled to turn a profit since its inception in 2004.
That could soon change as its property finance business has doubled in size in the last year, which could allow IBB to expand later into Europe, said Choudhury, adding its retail operations would remain focused in the UK.
“Clearly that is the objective (to break even) no only in the medium term but also in the short term, and we are on course to do that.”
IBB also aims to buy some of the 200 million pounds of sukuk that the British government will issue this week, a much needed sterling-denominated liquidity tool for the bank.
Choudhury said he hoped demand would be such that the government would consider a future issuance, which could be facilitated through the use of a different sukuk structure.
Britain’s maiden sukuk will use an ijara structure, a Shariah-compliant sale and lease-back contract, allowing the rental income of three central government offices to underpin the transaction.
But a structure known as wakala, or agency agreement, could side-step the need to find unencumbered government assets, instead securitizing cash flows from roads or bridges, he said.


Middle East organic milk company sees surge in sales during COVID-19 lockdown

Dairy and plant-based drink company Koita Foods saw a 350 percent rise in online sales last year. (Supplied)
Dairy and plant-based drink company Koita Foods saw a 350 percent rise in online sales last year. (Supplied)
Updated 30 min ago

Middle East organic milk company sees surge in sales during COVID-19 lockdown

Dairy and plant-based drink company Koita Foods saw a 350 percent rise in online sales last year. (Supplied)
  • Online demand for Koita Foods’ dairy, plant-based drinks soar by 350%

RIYADH: Dairy and plant-based drinks company Koita Foods saw a 350 percent rise in online sales last year as consumers working from home during the coronavirus disease (COVID-19) pandemic embraced e-commerce and healthier diets.

“Many platforms are asking for our products as globally there is a big move toward buying online,” Mustafa Koita, the firm’s founder and CEO, told Arab News.

Established in 2013 in Dubai, Koita Foods’ mission is to make healthy food more accessible for families in the Middle East, North Africa, and South Asia (MENASA) region.

The company’s data showed that during the first half of 2020 total sales in Saudi Arabia increased by 111 percent year-on-year, with a 150 percent rise in demand for plant-based drinks, and a 140 percent growth in sales of lactose-free produce.

There has been a huge demand in Saudi Arabia recently for more organic, lactose-free, and non-dairy milk options, with sales up by around 31 percent.

Dairy and plant-based drink company Koita Foods saw a 350 percent rise in online sales last year. (Supplied)

“People are looking for vitamin D, especially when you’re looking at immunity. Immunity is now a buzzword with coronavirus,” Koita said.

Although the business’ online sales have increased during the period of the global health crisis, Koita noted that the virus outbreak had impacted on the sector.

“Seventy percent of my business is retail and grocery stores. The other 30 percent is hotels, restaurants, and catering. So, the hotels got shut down, but the grocery stores were the only thing open in the region,” he added.

In order to monitor the fast-growing new sector, the Saudi Food and Drug Authority (SFDA) has put in place stringent product labelling requirements, in a bid to adhere to international standards.

“They want consumers to see and to have more information at hand. So, we’ve also updated our labels with the SFDA requirements. And we’re very excited that the SFDA is acting as the leader,” Koita said.

Mustafa Koita, Founder and CEO of Koita Foods. (Supplied)

The company already has its own strict labelling policy on ingredients. “We already have very good ingredients, such as our organic chocolate milk which is made from organic cocoa, organic brown sugar, and organic milk.”

A self-funded venture, Koita conducted extensive research into the marketplace before launching his namesake products. Via social media, he interviewed thousands of mothers in Saudi Arabia, the UAE, Kuwait, Jordan, and Singapore to find out what they were looking for in a good organic milk solution.

When it came to production, he picked Torino, in Italy, a region known for making some of the best milk in the world. “I found out that the quality of milk depends on what the cows are eating or what is in the soil, as well as how the cows are treated, the pasteurization process, and packaging of the milk.”

He added that the land in Italy was very fertile and that cows there enjoyed a good quality of life. “They have a better view than I do in my own home,” he said.

Koita Foods’ products are sold in more than 1,000 retail outlets throughout the MENASA region and other emerging markets, with revenue continuing to grow.

“We did a lot of expansion in 2020, and I think now what we want to do is focus on doing a better job in the 11 countries that we’re already in.”

Koita added that Saudi Arabia was one of its core markets and that he aimed to improve the firm’s distribution network in the Kingdom over the next 12 months.