Bank of Ireland has completed the sale of its Sharia-compliant home-finance portfolio to Offa, a UK-based fintech company specialising in Islamic property finance.
The portfolio, valued at £17m ($21.6m), comprises over 350 home-purchase plans, reported Irish Independent.
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This move marks a significant transition for customers seeking Sharia-compliant property financing options.
The partnership between Bank of Ireland and Arab Banking Corporation’s UK operation, Alburaq, began in 2008, launching the UK’s first Shariah-compliant structured deposit.
This initiative aimed to make home ownership more accessible to the Muslim community, adhering to their religious investment principles. However, the Alburaq product has not been available to new customers since 2009.
A spokesperson for Bank of Ireland confirmed, “The sale of the small remaining portfolio will provide customers with access to a wider range of Sharia-compliant property re-financing options.”
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By GlobalDataOffa is claimed to be the first financial institution to acquire an Islamic home-finance book in the UK. The Birmingham-based team has developed a Sharia-compliant funding structure designed to address legal and tax challenges.
Offa chief financial officer Amir Firdaus said: “It is testament to Offa’s abilities that Bank of Ireland has agreed to sell their Islamic home-finance portfolio to us. This marks another chapter in Offa’s ambitious growth plans.
“Members of the Offa executive team are already very much familiar with Alburaq’s clients, having helped distribute this book almost two decades ago, and we are delighted these customers are now coming home to us.”
Offa aims to revolutionise Islamic property finance through advanced software and paperless operations.
The company’s ethical finance model, which excludes charging interest and investing in industries like alcohol, tobacco, and arms, is gaining traction among non-Muslim clients as well.
Offa, established in 2019, is also the UK’s inaugural bridge-finance provider that adheres to Islamic financial principles.
Recently, GoldenTree Asset Management has agreed to purchase a UK consumer loan portfolio worth around €800m ($871.24m) from Bank of Ireland.
