MANAMA: The London-based European Islamic Investment Bank (EIIB) has decided to change its strategy and refocus on the Islamic markets of the Middle East and Asia.
As part of that strategy, it is relocating some of its key personnel from its London office to its representative office in Bahrain.
"When we were established in 2005 in the UK we were looking to enter the Middle East markets to raise capital of Sharia-compliant nature through sukuk and other instruments," said the head of EIIB Bahrain office and strategic business development Alwaleed Kamal.
"The idea was to raise money here for companies and institutions in Europe and one of the strengths of operating out of London was the availability of a strong pool of financial experts in the city.
"There were a number of weaknesses in this initial strategy and when Subhi Benkhadra joined us in 2007 from Esterad Investment company, he began a reappraisal of our strategy which, now that he has taken over as chief executive officer, we are putting into place.
"In the wake of the financial crisis, the growth markets are not the US and Europe but the Middle East and Asia and that is where we will be targeting our Islamic financial products and services in future," Mr Kamal said.
"The initial strategy was not wrong, and it is one that could work in the future, but at present the problem is there are tax advantages in the UK for conventional bonds that are not enjoyed by sukuk," said Mr Benkhadra.
"When EIIB was set up there was growing interest in Islamic finance in the UK and Europe and the British government was looking to launch a sovereign sukuk which would have meant looking at the tax regime for such instruments.
"However, with the financial crisis more important issues had to be addressed and since then it has been less of a priority," he said.
"We currently have 44 staff with 12 of them in Bahrain but we will be moving some key staff here," he said.
"Setting up in London meant we could recruit people of a calibre we would have found difficult to find locally.
"But with the change in strategy and Bahrain as the financial hub of the region it makes sense to have people who can fly to anywhere in the region in a couple of hours rather than spend a lot of time travelling from London," he said.
He added that while they were looking to Asia as well as the region they had no plans at this time to open an office in Malaysia which is seen as that region's hub.