Offa purchases Bank of Ireland’s Islamic home finance portfolio
Offa, the UK’s leading Islamic property finance fintech, has acquired Bank of Ireland’s Alburaq Sharia-compliant home finance portfolio in a landmark deal utilising a unique funding structure, including more than 350 home purchase plans.
The Offa team, based in Birmingham, worked with global law firm Norton Rose Fulbright to create a pioneering sharia-compliant funding structure, overcoming tax legislation issues affecting Sharia-compliant finance firms – and became the first financial institution ever to buy an Islamic home finance book in the UK.
The Alburaq portfolio is one of the oldest sharia-compliant home finance products to have launched in the UK.
The deal means that the customers transferred over to Offa will now have access to a wider range of Sharia-compliant property finance products.
Amir Firdaus, Chief Financial Officer at Offa, 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 that these customers are now coming home to us.
“Those who have been transferred as part of this purchase and are eligible will now have access to a wider range of Sharia-compliant property re-financing options. We are now focused on ensuring a seamless migration for customers to our servicing platform.”
David Shearer, Partner at Norton Rose Fullbright, said: “Our focus is always on delivering successful outcomes for our clients and we are delighted to have aided Offa in acquiring the Alburaq portfolio via one of the first Sharia-compliant tranched private securitisations in the UK. It marks a significant evolution of the UK’s Islamic finance market and we expect that UK Sharia-compliant securitisations will quickly grow in volume and sophistication.”
Offa recently launched an innovative new buy-to-let (BTL) service – with fast funding decisions delivered via a modern paperless process – aiming to disrupt and transform the traditionally old-fashioned and cumbersome world of Islamic finance. Instead of using interest, Offa’s BTL product involves the Islamic finance principles of co-ownership-with-leasing. Customers acquire the property in partnership with Offa and make monthly payments to increase their share, over time owning it.
The company provides an ethical finance model designed in accordance with Islamic finance principles, which means not charging interest and investment into sectors deemed harmful to society – such as alcohol, tobacco, and the arms trade.
Offa has £230 million of sharia-compliant funding for its BTL product, offering significant capacity for the business to expand and diversify its financial propositions in the UK property market.