AlRayan Bank UK Review - Halal Finance Products

AlRayan Bank PLC began life in 2004 as Islamic Bank of Britain, the first wholly Sharia compliant retail bank licensed in a Western country. Masraf Al Rayan of Qatar acquired the business in 2014 and rebranded it Al Rayan Bank (now styled AlRayan), recapitalising it and reorienting it around three franchises: retail savings, Premier banking for wealthier and GCC-connected clients, and commercial property finance. The bank is authorised by the PRA and regulated by the FCA and PRA, and eligible deposits carry FSCS protection up to the 120,000 GBP limit in force from December 2025.

The strategic pivot is the single most important fact for a prospective customer. From 2022 the bank progressively closed its retail current accounts, its retail Home Purchase Plan range and several savings lines to new customers, exiting the mass-market segments it had created. What remains open is a savings shelf run through the bank's Digital Banking app (Everyday Saver at 2.75% with a 10,000 GBP floor, fixed term deposits at 4.73%/4.43%/4.55% for one/two/three years, all crawled 2026-08-06), the negotiated Wakala Treasury Deposit above 250,000 GBP, Premier Home Finance, and the commercial property desk. Anyone looking for an Islamic current account or a published-rate home purchase plan must now look elsewhere - to HBZ Sirat for the former and Gatehouse for the latter.

The savings franchise remains genuinely strong. The 12-month fixed term deposit has been a fixture of national best-buy tables for years, competing with and often beating conventional banks, and the bank states it has always paid at least its expected profit rate since 2004. The structural honesty of 'expected' rather than guaranteed profit is handled with published fatwa certificates per product, a signed annual report from the Sharia Supervisory Committee confirming profit allocation followed approved bases, and a commitment to strip any non-compliant earnings to charity. The weaknesses are practical: 10,000 GBP minimums across the shelf, an instant access rate (2.75%) that Gatehouse beats from a 1 GBP minimum, and certificates published as undated image scans rather than living documents.

Home finance is where the pivot bites hardest. AlRayan built its name on diminishing Musharaka Home Purchase Plans; today's Premier Home Finance is instead Commodity Murabaha (Tawarruq) - the bank facilitates commodity trades to generate the finance amount, repaid at a pre-agreed price. The product page is admirably direct about this, and the SSC has approved it, but scholars who regard co-ownership as the gold standard consider Tawarruq weaker, and mass-market borrowers cannot access the product at all: it is negotiated, relationship-managed, England and Wales only, with admin fees typically 1 to 1.5% of finance. The flip side is genuine flexibility for its target client - no early settlement fees, profit-only payment options, GCC resident eligibility and refinancing without stamp duty.

Commercial property finance is now the bank's engine. Launched in 2006 on Diminishing Musharakah and Ijara, the desk writes 2.5m to 32m GBP facilities for residential-focused commercial property on 1 to 25 year terms, passed 2 billion GBP of gross finance, and drove the record FY2025 results. Nothing is published - rate, FTV and fees are all negotiated - so professional borrowers should tender AlRayan against BLME and QIB (UK). The 2.5m GBP floor leaves smaller landlords to HBZ Sirat and Gatehouse.