UK's Birmingham seeks chunk of Islamic finance market

By Alastair Sharp

LONDON, July 11 (Reuters) - Once an industrial powerhouse, Britain's second largest city Birmingham is eagerly rebranding itself as a key European centre for retail Islamic finance.

Britain sees itself as the European leader in providing sharia-compliant financial services, aiming to serve both domestic Muslim markets as well as tapping into the vast wealth of Gulf investors keen to access Western assets.

London dominates Britain's financial sector but, with a growing Muslim population of about 250,000 and two flights a day to Dubai, Birmingham seems well-placed for the new sector.

"It's like in America's Silicon Valley -- you will get clusters of expertise in certain areas," said Stephen Amos, spokesman for the Islamic Bank of Britain (IBB).

"The two areas of expertise are always going to be London ... and hopefully Birmingham."

The IBB -- which holds 130 million pounds ($256 million) and was the first stand-alone Islamic retail bank in the European Union -- has been based in Edgbaston, a suburb of Birmingham, since its inception in 2004.

At a conference on Islamic banking this week in London -- where the British government again repeated its intention to issue its own sukuk Islamic sovereign debt in future -- promoters from the region were pushing the city's case. "Birmingham is generally acknowledged to have developed expertise in this emerging market, and we have a very well-rooted, successful Muslim community in the city," said Mike Loftus, from Locate in Birmingham, a government body promoting investment in the city.

The IBB's Amos agrees.