Bank of Ireland has made a significant move by finalising the sale of its Sharia-compliant home finance portfolio to Offa. This portfolio, valued at £17m ($21.6m) and consisting of over 350 home-purchase plans, marks a transition for customers seeking such financing options. The partnership between Bank of Ireland and Alburaq began in 2008, launching the UK's first Shariah-compliant structured deposit. However, the Alburaq product has been unavailable to new customers since 2009.

Significance of the Sale

A spokesperson for Bank of Ireland confirmed that the sale of the remaining portfolio will offer customers a wider range of Sharia-compliant property re-financing options. This move is seen as a positive step in providing diverse financial services to meet the needs of different communities.

Bank of Ireland's decision to sell the portfolio showcases its commitment to adapting to market demands and providing innovative financial solutions. It also highlights the growing importance of Sharia-compliant finance in the UK and globally.

The sale to Offa, a UK-based fintech company specialising in Islamic property finance, brings new opportunities for customers. Offa's expertise in this area and its development of a Sharia-compliant funding structure are expected to benefit customers seeking ethical and compliant financing.

Offa's Achievements and Ambitions

Offa 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 unique funding structure that addresses legal and tax challenges.

Amir Firdaus, Offa's chief financial officer, expressed pride in the agreement, stating, "It is testament to Offa's abilities that Bank of Ireland has chosen to sell their Islamic home-finance portfolio to us. This marks another chapter in Offa's ambitious growth plans."

Offa aims to revolutionise Islamic property finance through advanced software and paperless operations. Its ethical finance model, which excludes certain industries, is gaining traction among both Muslim and non-Muslim clients. The company, established in 2019, is also the UK's inaugural bridge-finance provider adhering to Islamic financial principles.

Recent Deals and Market Impact

Recently, GoldenTree Asset Management agreed to purchase a UK consumer loan portfolio worth around €800m ($871.24m) from Bank of Ireland. This further indicates the active role of Bank of Ireland in the UK financial market and its ability to navigate different business transactions.

The sale of the Sharia-compliant portfolio and other deals like this have implications for the overall market. They showcase the evolving nature of the financial industry and the demand for specialised and ethical financial services.

Offa's acquisition of the portfolio is expected to contribute to the growth and development of Islamic finance in the UK. It also sets an example for other financial institutions to explore and embrace Sharia-compliant finance.