Al Rayan Bank delivers record financial performance

• Pre-tax profits reached £30.61m (2022: £20.8m) for the 12-month period ending 31 December 2023
• Assets in commercial property finance reached £904m during the period (2022: £792m), with total assets remaining steady at £2.49bn (2022: £2.4bn)
• The Bank continued to boost efficiencies, strengthening its cost to income ratio to 53% (2022: 62%)
• Chief Executive Officer, Giles Cunningham, says the Bank expects continued strong growth in 2024 as it embarks on a new three-year strategy

Al Rayan Bank, the UK’s most successful Islamic bank, achieved another record financial performance in the year ending 31 December 2023 as it delivered strong growth across its commercial property financing and premier banking divisions.

The Bank, which employs more than 200 people in the UK, recorded pre-tax profits of £30.61m in the period, up almost 50% from £20.8m in 2022.

The Bank's commercial property finance asset book reached £904 million in 2023, reflecting a significant 14% year-on-year rise from 2022. This growth was fuelled by funding for developments across various residential sectors, catering to the needs of high-value real estate investors.

Total asset value remained steady year-on-year at £2.49bn (2022: £2.4bn) in line with the Bank’s strategy, with the cost to income ratio falling to 53% (2022: 62%). The base rate cycle also partially aided financial performance in 2023, as is the case with most UK banks.

The Bank also regularly topped rate tables for its award-winning savings products in 2023 and delivered an enhanced digital banking service that is now used by more than 40,000 customers. Additionally, it started making savings products available through aggregator platforms, which has enabled the Bank to diversify funding streams and reach more UK savers.

At the start of 2024, the Bank launched a new three-year strategy that will continue to hold commercial property financing as its core focus, with an ambition to accelerate growth in residential and shift incrementally to higher margin assets, such as commercial offices and bridging finance.

It will also see the Bank focus on growing its GCC high-net worth customer base, particularly business origination in Qatar, as well as further opportunities in Saudi Arabia and the UAE, working closely with the Bank’s parent bank , Masraf Al Rayan. These initiatives will be supported by further enhancements to its premier banking proposition.

Giles Cunningham, Chief Executive Officer of Al Rayan Bank, says the Bank is well-placed to deliver another strong performance in the current period.

He said: “Our performance in the last financial year cemented our position as the most profitable and successful Sharia compliant bank ever in the UK.

“The success reflects our strategic resilience and dedication, the strong support of our stakeholders, the skill and effort of our colleagues and the trust and engagement of our customers.

“We’re proud of the progress we have been able to make in the last year and look forward to building on this performance as we take forward our new three-year strategy.”

2023 also marked a pivotal year for the Bank’s commitment to environmental, social, and governance (ESG) issues, which saw the establishment of an ESG committee and the offsetting of 256.5 tonnes of CO2e – twice as much as the Bank produced in 2022 - in partnership with Carbon Neutral Britain, enabling the Bank to become operationally carbon neutral.

Additionally, the Bank made further material improvements in the compensation, rewards and working culture for its employees, contributing to consistently high employee engagement scores.

The latest engagement survey, which is anonymous and independently run, was conducted in November 2023, and completed by 97% employees (2022: 92%). It revealed an engagement score of 86% (2022: 81%), confirming continued progress as a great place to work, and showed 93% (2022: 90%) are proud to work for Al Rayan Bank and 96% (2022: 92%) want to develop their career with the Bank. 

Michael Williams, Chairman at Al Rayan Bank, said: “The record year in 2023 marks our third record year in succession and represents a marked improvement over 2020 when we recorded PBT of just over £4m and a Cost Income Ratio of 89%. 2023 showed not only an excellent financial performance but we also achieved growth in our financing activities and made strategic investments that have transformed our operations, including our new flagship Head Office in Stratford Place London.

“Looking ahead, we are now focused on a new three-year strategy building on our core strengths with the aim of delivering long-term sustainable growth, providing the best services for our customers, nurturing a productive and supportive working environment, and achieving sustained and long-term returns for our shareholders.

“The achievements the Bank made in 2023 - the most successful year in its history - would not have been possible without the ongoing support of all our stakeholders. We thank all of our customers, investors, regulators, colleagues and Masraf Al Rayan for their continued support and our dedicated and hard-working employees for their role in helping us achieve our success.”

Al Rayan Bank, founded in 2004, is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.

For more information on Al Rayan Bank, please visit: https://www.alrayanbank.co.uk/