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London takes a further step in its push to become the leading western financial centre for the fast-growing industry of Islamic banking, with the launch Tuesday of the fifth Islamic bank to be awarded a UK licence, reports the FT on Tuesday.

The launch of Gatehouse Bank highlights the resilience of Sharia-compliant finance amid a credit crisis that has wiped billions off the balance sheets of conventional banks.

Britain is the only EU country to have licensed Islamic banks - reflecting the government’s realisation of the potential of the Sharia finance market for the City’s further development as a financial centre. It has also seen the development of Islamic finance as a way of building bridges with the 2m Muslims who live in the UK, notes the FT.

Current Islamic banking assets are currently estimated at $500bn - about 20 per cent above the estimate during last summer’s credit squeeze, according to Moody’s.

The five Islamic banks in Britain comprise one retail bank, the Islamic Bank of Britain, launched in 2004, the European Islamic Investment Bank, given a licence in 2005, the Bank of London and Middle East, launched in July 2007, the European Finance House, set up in January this year, and Gatehouse.