5 February 2009
ISLAMIC BANK OF BRITAIN ("IBB", "Company" or "Bank")
The Board of the Islamic Bank of Britain PLC announces the following trading update.
The continued decline in economic conditions and its impact on the financial services sector, and banks in particular, is well publicised. Since we last commented on current trading and prospects in the circular to shareholders on 26 November 2008 we have seen further declines in the UK banking environment.
Since obtaining its banking licence in 2004, the IBB Board has pursued a strategy to grow the Bank and generate revenues from varied sources including fee and commission income. However, unlike many high street banks, IBB's main revenue source remains the profits it earns on deposits. Net margins earned on these deposits have declined due to the general market conditions. This has had a negative effect on the income of the Bank.
The financial results of IBB over the last few years have shown steady improvement. The Directors believe, as a result of the current economic climate, the results for the year ending 31 December 2009 will be negatively impacted and that it will now take longer for the Bank to reach breakeven.
The Board is currently assessing action to mitigate the impact of the decline in revenues on profitability as a result of declining margins. The Board will continue to review the Company's financing structure and pursue opportunities for profitable growth. Whilst IBB has sufficient capital for its current requirements, the Board intends to raise further capital in the future to support the Company's growth.
IBB remains the only full-service wholly Sharia-compliant retail bank operating in the UK. The Bank enjoys low exposure to unsecured or high risk assets. The Bank will continue to strive for growth in revenues from its Sharia-compliant products and to attract longer term customer deposits.
For further information:
Islamic Bank of Britain plc
Gerry Deegan, Managing Director 0121 452 7300
Grant Thornton UK LLP (Nominated and Financial Adviser)
Gerry Beaney 020 7383 5100
Charles E Cattaneo 0121 212 4000