The UK and Bahrain have signed an agreement to strengthen Islamic finance capabilities in both countries.
A preliminary framework outlining how the two countries can work together was signed in London on 8 April between senior foreign office minister Baroness Waris and Central Bank of Bahrain governor Rasheed Mohammed al-Maraj.
The agreement outlines an education and skills programme and a working group that will aim to increase trade and investment between the UK and the Gulf country.
The UK is aiming to strengthen itself as a hub for Islamic finance outside of the Gulf. London has 25 Islamic banks already and the government would like to attract more. The UK is also planning to issue its debut £200m ($332m) sovereign sukuk (Islamic bond).
The sukuk was announced in October last year and UK law firm Linklaters and UK bank HSBC were appointed in January to advise on the issuance. The bond is expected to be launched in September this year and will be welcomed in London by Islamic financial institutions looking for investment opportunities.
Bahrain has played a major role in developing the Islamic finance sector, issuing the first international sovereign sukuk in 2001.
The Gulf country is looking to strengthen its banking sector through encouraging consolidation between banks.
Last year, a number of lenders in the country, including Islamic finance providers, completed mergers. This included the sharia-compliant Al-Salam Bank, which merged with BMI Bank, which is affiliated with Omans Bank Muscat.