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Aston Martin owner to set up UK Islamic bank

Tue Feb 5, 2008 3:24pm GMT

By John Irish

DUBAI (Reuters) – Kuwait’s Investment Dar (TIDK.KW: Quote, Profile, Research) is setting up a British investment bank this year to offer advisory services for Gulf investors doing business in Britain and tap into growing demand in Europe for products that comply with Muslim law, an executive said.

Investment Dar, which owns 50 percent of carmaker Aston Martin, plans to submit its application to the Financial Services Authority (FSA) this month, Adham Charanoglu, business development manager at Investment Dar, told the Reuters Islamic Finance Summit on Tuesday.

Dar Capital, which is already operating outside the UK until it receives a license, will be headed up by Ahmad Salam, the former global head of Islamic finance at Credit Suisse (CSGN.VX: Quote, Profile, Research).

Salam will initially be assisted by two other bankers from Barclays Plc (BARC.L: Quote, Profile, Research) and Morgan Stanley (MS.N: Quote, Profile, Research), before staffing rises to at least 15 people.

“We see a huge potential … everybody knows the UK will be the Islamic finance hub of Europe,” Charanoglu said.

Britain has taken steps to attract the world’s booming Islamic finance industry — estimated to be worth $1 trillion in assets by 2010 — including new legislation to make Islamic transactions easier and plans to issue a sovereign Islamic bond.

London’s Islamic banks have been positioning themselves to cater to the estimated 15 million Muslims in Europe, where the industry has so far made little impact outside the British capital.

In the “first phase”, Dar’s British unit would serve the requirements of the company and its affiliates, before becoming a fully fledged Islamic investment bank, Charanoglu said.

Qatar Islamic Bank QISB.QA, the Gulf’s fourth-largest lender by market value, said on Monday it had received an investment banking license from the FSA for its UK unit, European Finance House.

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