Is moving into Islamic finance such a good idea?

Islamic finance courses have been popping up in the UK over the last couple of years, and an increasing number of bankers with conventional backgrounds are looking to get in on the act. But the industry has not been immune to problems and it's debatable whether there are that many job opportunities at the moment.

"A lot of Islamic banks were looking to the UK as a wholesale centre in order to develop the industry," says Ken Eglinton, head of the Islamic Financial Services Group at Ernst & Young in the UK. "The City has a number of strengths to play to - innovative products, secondary markets, benchmark prices and indices, asset finance and structuring. However, the crisis has knocked London's reputation, meaning France and Singapore have attempted to steal a march as an Islamic finance centre."

London is home to four Islamic investment banks - including Bank of London and the Middle East (BLME), Gatehouse Bank and the European Islamic Investment Bank - and a retail bank, Islamic Bank of Britain.

Gatehouse is the product of a merger between Gatehouse Bank and Global Securities House UK - both local subsidiaries of Kuwaiti firm The Securities House - in August.

Gatehouse had barely completed a single deal since its establishment in 2008, and lost its CEO David Testa as a result of the merger.

"There is an interest from institutional investors and that's why there are a number Islamic investment banks in UK," says Professor Habib Ahmed, Sharjar chair in Islamic Law and Finance in the school of government and international affairs at Durham University. "However, the industry has not performed as expected and during recent times the crisis has also dampened its growth."

However, he says there's "huge demand" for Islamic finance courses at the moment, "so large that it's difficult to cope with".

Besides the degree available at Durham, there's an MSc at Reading University, an MBA at Cass Business School, and CIMA and the Securities and Investment Institute also offer Islamic finance qualifications.

CIMA's global Islamic finance qualification director John Willsdon tells us that there's been an influx of bankers from a conventional backgrounds signing up to the course "speculatively" in the hope it will add an extra cavaet to their CV.

But how likely is it that you'll find a job? Islamic finance opportunities in the UK do exist, but they are still relatively rare. BLME, for instance, has just recruited three for its new private banking arm, although Gatehouse has hired 30 investment bankers since it started last year.

Prior experience seems essential. Humphrey Percy, CEO of BLME, said: "All of our staff are seasoned professionals with a good range of Islamic finance credentials."

And Eglinton suggests that some firms are now beginning to feel the pinch.

"Islamic banks have been hit hard by the financial crisis just like conventional institutions - borrowers are defaulting on loans and property investments have slumped."