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ISSUE 102
ISSUE 102 DJIBOUTI’S ISLAMIC FINANCE FUTURE HE Ahmed Osman, Governor, Central Bank of Djibouti
DJIBOUTI’S ISLAMIC FINANCE FUTURE HE Ahmed Osman, Governor, Central Bank of Djibouti
A CPI Financial Publication
PLUS:
bleed guide.indd 1
TAKAFUL:
World Takaful Conference 2017
SUKUK:
UAE issuance hits new highs
MALAYSIA: KFH Malaysia’s strategy
20/04/2017 15:39
bleed guide.indd 1
28/08/2016 10:58
CONTENTS
ISSUE 102
REGULAR SECTIONS
EDITOR'S LETTER
10
Greetings, all
W
elcome to our latest issue of Islamic Business & Finance. This is the 102nd issue of the first and longest-running Islamic finance magazine in the world. It was a pleasure meeting those of you in the Takaful space at the World Takaful Conference 2017. Of the main pillars of Islamic finance, it often feels like Takaful doesn’t get enough focus, so having a chance to speak to Takaful professionals from multiple continents was a fantastic way to get a global perspective of this widely-spread industry. I hope you enjoy our cover story, with some news coming from the Governor of the Central Bank of Djibouti, HE Ahmed Osman. As many of you know, I’ve been a fixture of the International Islamic Banking Summit Africa, moderating the last two years, and it’s been wonderful to watch the nation and the continent develop its Islamic economy further, and there are some fascinating insights in our latest conversation. There is plenty to peruse. I hope you enjoy digging into another great issue. Until next time,
OPINION
8
36
AN INDUSTRY LEADER RETIRES...
COVER INTERVIEW
10 DJIBOUTI’S ISLAMIC
FINANCE FUTURE HE Ahmed Osman, Governor, Central Bank of Djibouti
SUKUK
36 DUBAI’S SUKUK ISSUANCES NOW HIGHEST IN WORLD
42
40 MARKET WATCH TAKAFUL
42 A FOCUS ON TAKAFUL’S FUTURE
DIARY AND NEWS ANALYSIS
6 News & Analysis 50 Dates for your diary
William Mullally www.islamicbusinessandfinance.com
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CONTENTS
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ISLAMIC BANKING
EXPERT OPINION
16 GCC ISLAMIC BANKS SET
28 A NEW NORMAL FOR
TO BE MORE PROFITABLE THAN CONVENTIONAL IN 2017
ISLAMIC FINANCE?
ISLAMIC TECH
20 THE TRANSFORMATION
32 THINKING LIKE A START-UP
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THE INSIDE STORY
24 BAHRAIN ISLAMIC BANK:
46 THE ROLE OF WOMEN IN
Gaining customer’s trust
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ISSUE 101
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T H E A U T H O R I TAT I V E V O I C E O F I S L A M I C F I N A N C E
HE Ahmed Osman, Governor, Central Bank of Djibouti
PLUS:
TAKAFUL:
World Takaful Conference 2017
page 3-4 contents102.indd 4
UAE issuance new highs
hits
TAKAFUL:
Takaful in Indonesia
SUKUK:
Fadi Al Faqih, CEO, Bank of Khartoum A CPI Financial Publication
Islamic Business & Finance | ISSUE 102
PLUS:
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DUBAI:
Metito’s experience DIEDC’s updated in Africa strategy
15/02/2017 14:45
PLUS:
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TAKAFUL:
Mixed results for GCC Takaful in 2016
SUKUK:
Turkey aims for a bigger slice
AWARDS:
The Islamic Business & Finance Awards 2016
09/11/2016 16:57
MALAYSIA:s KFH Malaysia’ strategy
17/04/2017 15:30
page 3-4 contents102.indd
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Bank of Djibouti Governor, Central
SUKUK:
GLOBAL SUCCESS
AN EXCLUSIVE WITH HRH PRINCE KHALED BIN ALWALEED BIN TALAL
A CPI Financial Publication
HE Ahmed Osman,
FINDING
KBW LAUNCHES ISLAMIC FUND
DJIBOUTI’S CE ISLAMIC FINAN FUTURE A CPI Financial Publication
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FINANCE FUTURE
PRINTED BY United Printing & Publishing – Abu Dhabi, UAE
FINDING GLOBAL SUCCESS Fadi Al Faqih, CEO, Bank of Khartoum
KBW LAUNCHES ISLAMIC FUND An exclusive with HRH Prince Khaled bin Alwaleed bin Talal
DJIBOUTI’S ISLAMIC
Registered at the Dubai Media City
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06/02/2017 14:05
NEWS & ANALYSIS
A slowdown in Islamic financing growth in the UAE will reveal a deterioration in banks’ asset quality as portfolios season more quickly, Fitch Ratings says. Asset quality has improved for Islamic and conventional banks in the UAE since the financial crisis. The Islamic banks’ average impaired financing ratio was six per cent at end-1H16, significantly improved from 11.5 per cent at end-2012. But deterioration due to portfolio seasoning has started in some corporate segments, particularly SMEs, and we expect this to filter down to other segments, including retail. The banks that suffered the most during the crisis are still benefiting from some recovery and this may offset any deterioration in asset quality metrics in the short term. BASHAR AL NATOOR, Fitch Ratings
Saudi Arabia’s push towards renewable energy projects could be a boon for Sukuk in the Kingdom, according to a recent report from Moody’s. Moody’s expects the plans will be achieved through independent power producers, consistent with goals to reduce the share of the public sector in the economy to 35 per cent from 60 per cent currently, as outlined in the government’s “Vision 2030”, introduced in April 2017. Moody’s expects new opportunities for lenders to independent renewable power producers in Saudi Arabia, as the government seeks to move the country away from a heavy dependence on oil in the face of fast growing electricity demand. Saudi renewable plans will help reduce the share of the public sector in the economy and leverage project finance opportunities for lenders—both Sukuk and non-Sukuk. CHRISTOPHER BREDHOLT, a Moody’s Vice President – Senior Analyst
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M
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OPINION
An industry leader retires…
I
n early April, one of the biggest voices in the Islamic finance world retired from his key position. Yes, the Islamic Financial Services Board (IFSB) announced the retirement of its SecretaryGeneral, Jaseem Ahmed, after a six-year term at the helm. Ahmed made many contributions to the Islamic finance world since he began his tenure in May 2011. These contributions included the introduction of the second generation of the IFSB Standards and Guidelines (SAGs) in enhancing the soundness and stability of Islamic financial services industry (IFSI), within the mandate given to the IFSB. He also spearheaded the formulation of the IFSB’s Strategic Performance Plans, the inaugural one was introduced for the term 2012 – 2015, followed by the second in 2016 – 2018. “The IFSB also initiated during Mr. Ahmed’s tenure as SecretaryGeneral the IFSB’s flagship publication, the annual Islamic Financial Stability Report (from 2013); the IFSB’s annual Standards Implementation Survey, and the preparation of Core Principles for Islamic Finance Regulation (CPIFR or IFSB-17) which aim to facilitate greater integration of Islamic finance into the international economy and global financial architecture. In addition, Mr. Ahmed oversaw the dissemination of the Prudential and Structural Islamic Financial Indicators (PSIFIs) (2015), a longstanding goal of the IFSB,” said the IFSB in a statement. These accomplishments bring me back to the hour-and-a-half conversation I had with Ahmed in Kuala Lumpur in 2014, where his focus was very much on bringing the Islamic economy more in sync with the global economy. “The challenge for Islamic finance is where that growth will come from, and how it will link to what looks like continued expansion of emerging markets more broadly. I think that’s the real challenge for us—we need to see a greater linkage between Islamic finance and the drivers of the global economy—trade, manufacturing. We’re seeing that, and that’s where it’s going to happen. That’s where the future will be determined—how we can integrate ourselves into the global economy,” he told me. Those issues are more pressing than ever. With technological innovation coming more to the forefront, the path forward for Islamic finance will be a difficult one. But though we may lose Ahmed from the IFSB, the industry cannot forget this key goal, even if he is not actively working with the body to pursue those goals himself.
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Islamic Business & Finance | ISSUE 102
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William Mullally
Editor
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20/04/2017 12:59
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COVER INTERVIEW
10
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COVER INTERVIEW
DJIBOUTI’S
ISLAMIC FINANCE
FUTURE
IN AN EXCLUSIVE INTERVIEW, HE AHMED OSMAN, GOVERNOR, CENTRAL BANK OF DJIBOUTI DISCUSSES THE ROAD TOWARDS ITS FIRST SUKUK, ITS NEW SHARI’AH BOARD, AND HUMAN CAPITAL DEVELOPMENT
W
e’re aware that you’ve been meeting with The Islamic Corporation for the Development of the Private Sector (ICD). What do you have in the pipeline?
With ICD, we are pushing them to help us to build the first Sukuk in Djibouti. I met with CEO Khaled Al-Aboodi last year in Washington DC, who promised to bring his staff to Djibouti in order to look over our assets to decide which will support the Sukuk. We are also happy to work with Afaq Khan, who is an advisor of ICD and worked with many other international bodies, and he has a lot of ideas on how we can manage a Sukuk here. He’s been helping us set that up so that it works in conjunction with our plans for development, as we have many projects in development.
Will the Sukuk signal your departure from working with China for funding? HE Ahmed Osman, Governor, Central Bank of Djibouti
China has a lot of resources and they want to use them. But in Djibouti, we have to use a more economical option. If we find resources that are better suited for us, we have to go with them. cont. on pg 12
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COVER INTERVIEW
cont. from pg 11
I have to look for the best way to serve our population, and it seems that Sukuk could be that. If we find that, in setting it up, that it is not the best option, we will change our plan.
Have you spoken with other nations about their experiences with Sukuk? We have not thus far. We’re happy with just utilising the ICD’s expertise, and trust them to aid us in this.
We have a lot of work to do to get the members of Islamic finance environment of Djibouti to be more operational, more structured and more efficient in making use of the income that they are generating from customers. HE AHMED OSMAN, Governor, Central Bank of Djibouti
How else has Islamic finance developed in the last year in Djibouti? Things do not go very fast in Africa. Islamic products are new, and our administration goes slowly, and in the last years, we’ve taken the engagement to build a Shari’ah committee. It is built, and so now we can start to train them. We’re planning to organise training in cooperation with other more developed Islamic finance markets like Sudan. We’ve budgeted for that and we have programmes prepared and ready for them, and we have a physical location for them within the Central Bank. The second most important thing is the construction and establishment of Islamic finance studies at the University of Djibouti. For the several years, we have been looking for the best manager to spearhead it to set up a permanent training centre for both people working within the Central Bank of Djibouti and students who want to get involved. This will lead to Islamic banks having better qualified potential employees available in the market. In 2016, we set up several technical assistance training programmes for the employees of the Central Bank, and we hope to have more training programmes in 2017 and beyond. We have a lot of work to do to get the members of Islamic finance environment of Djibouti to be more operational, more structured and more efficient in making use of the income that they are generating from customers.
Are the students of Djibouti motivated to get more involved in Islamic finance, or are you trying to increase that motivation? In Djibouti, and the rest of Africa, there are a lot of people who are very educated but do not have an easy time finding a job. The people that have a hard time finding an opportunity know that Islamic finance offers a huge opportunity, which
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Islamic financial institutions are growing in both stature and number. As a result, the programmes offered in our university are currently full. We will now start a four year programme within the cooperation of the Central Bank of Sudan, and we think it will be very easy to find motivated students for these programmes. There are even some students from Djibouti who have gone to study Islamic finance in Malaysia. But with these new programmes, they will not need to go all the way to Malaysia—they can do it right here in Djibouti.
How are you working with other nations in Africa or beyond to promote Islamic finance? We have started to work with the Central Bank of Sudan. In the previous years a delegation came, and that led to the agreement I mentioned about sending our staff to train with them in order to make use of their vast experience.
What other priorities do you have for 2017? The strategic development initiatives of the Central Bank of Djibouti in the past few years focus on five main areas: • Modernise the financial infrastructures; • Provide the BCD (Central Bank of Djibouti) with adequate means to carry out supervision that meets the required standard of the banking sector. To this end, the agenda consists of developing human and technical resources with the ability to implement effective and efficient supervision and to ensure the financial soundness of financial institutions; • Further strengthen the anti-money laundering and anti-terrorism financing framework to preserve the integrity and reputation of the financial centre in the context of significant inflows of capital and investors from abroad.
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COVER INTERVIEW
The development and proliferation of financial delinquency on the international scene calls for continued vigilance and clampdown in this area; • F urther strengthen financial inclusion: Despite the growth of the national financial sector, there are still inadequacies in the financing of the economy, in particular for SMEs/SMIs, while the rate of banking services barely reaches 20 per cent; • C ontinuously have legal and regulatory frameworks in line with the changing context and financial activities: supervisory guidelines for Islamic financial institutions, microfinance, regulation of electronic means and instruments of payment, etc.
The priorities for the 2017 agenda include the operationalisation of many projects considered to be of major economic and social importance. These include: • The adoption of regulatory standards for the introduction of mobile banking in the domestic market; • Th e i m p l e m e n t a t i o n o f t h e n e w, fully automated and integrated payment system; • U nlocking and full exploration of the potential of Islamic banking, which after notable results in the last decade, is likely to bring significant resources to meet the financial challenges of our economic development.
HE Ahmed Osman cont. overleaf
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COVER INTERVIEW cont. from pg 13
Do you have any plans to help contribute to Djibouti’s role as a regional gateway to East Africa? Due to its geographical location, Djibouti is naturally positioned to serve as a gateway for East Africa open to the world, particularly Asia and Europe. Djibouti’s development strategy already includes a broad platform of services and logistics to exploit its natural advantage. In line with this strategy, the financial sector needs to expand and solidify to provide sufficient depth and robustness to support the intensity of the economic development model, which must extend its influence across a vast economic space. Thus, having a broad, solid and modern financial industry is a fundamental objective that we have been continuously working towards over a decade. The supply of the financial sector must be able to respond to the challenges posed by the country’s current economic development, while also capturing all the opportunities provided by the vast economic area of the Greater Horn of Africa. In practical terms, this vision is reflected in operational plans that give rise to considerable reforms and investments, which I mentioned earlier; a robust and secure financial ecosystem framed by efficient regulation. Today, the financial sector hosts all ranges of basic finance and is a leader in the sub region. It needs to be strengthened further and become an international financial reference centre. I believe that all the ingredients necessary to realise this vision are being implemented progressively.
14
economic development, is of strategic importance. Without a robust financial industry, there can be no significant impact in terms of development. In order to guide this process, the government introduced important reforms targeting investment promotion and the streamlining of administrative procedures. Professional skills and training have also attracted considerable investment in gearing the performance of the education system towards the new challenges of the labour market. In order to streamline its actions, the Government set up the Djibouti Economic Development Board (DEDB), a high-level steering and monitoring body for reforms and investments, headed by the Prime Minister.
Is Djibouti on track to achieve the goals outlined in Vision 2035? It would seem that for the most part the answer is yes because if I were to summarise in simple terms the Vision 2035, it is about creating a peaceful and prosperous society where everyone has the opportunity to succeed in life and even to flourish.
Due to its geographical location, Djibouti is naturally positioned to serve as a gateway for East Africa open to the world, particularly Asia and Europe.
Which industries do you see as key to assisting in Djibouti’s development and what policies do you have in place to support these?
HE AHMED OSMAN, Governor, Central Bank of Djibouti
Djibouti’s development model stems from Vision 2035, which implementation targets a profound transformation of our society. To achieve this, the strategic industries, promoted to initiate the economic emergence of Djibouti, are above all those with high potential structuring. These industries are mainly associated with the large logistics platform and transportation infrastructure. Energy and water access is also a critical condition, and even a prerequisite for the success of Djibouti’s economic policy In this context, the financial industry, in connection with and in support of sustained
To address this point, the objectives set out in Vision 2035 are being realised in stages, the essential components of this policy are taking shape—meeting the basic needs of the population has significantly improved in the last few years. Indeed, access to healthcare and housing has increased, poverty incidence has declined from 74.4 per cent to about 42 per cent. The production, transportation and supply of water and electricity at competitive costs, have already been accomplished and for the past few months, the new train is carrying out its experimental trips. At the same time, new port
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COVER INTERVIEW
HE Ahmed Osman
construction projects are being launched, along with that of the future Chinese free trade zone.
What opportunities do you see for Djibouti and the Central Bank in 2017? The current favourable climate, which is the result of a well-thought-out development policy, must be preserved and the Government is making every effort to keep up the pace of foreign direct investment and achievements: by Sunday 12 March 2017, the “Single Window� was launched which aims to bring together the entire administrative body (administrative paperwork) in one place. This leads to more simplified business start-up procedures with costs are reduced by half. The aim is to speed up business registration so that it does not exceed 72 hours (three days). The Central Bank is associated with all these projects and fully involved in their implementation, notably through the modernisation of financial infrastructures and the automation of financial operations. Through these initiatives, we intend to strengthen the process of financial inclusion by a significant uptake of low-income populations and/or on the fringe of the formal financial and economic circuit.
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Generally speaking, following the rollout of the first wave of projects and the emergence of integrated economic hubs, the year 2017 should, by knock-on effect, allow to exploit other highpotential and unexploited economic sectors such as fishing or tourism.
The Central Bank is associated with all these projects and fully involved in their implementation, notably through the modernisation of financial infrastructures and the automation of financial operations. HE AHMED OSMAN, Governor, Central Bank of Djibouti
ISSUE 102 | Islamic Business & Finance
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20/04/2017 13:59
ISLAMIC BANKING
Net profitability will not rise at old rates, but will continue.
(enciktepstudio/SHUTTERSTOCK)
GCC Islamic banks set to be more profitable than conventional in 2017 ACCORDING TO ANITISH BHOJNAGARWALA, ASSISTANT VICE PRESIDENT – ANALYST AT MOODY'S, ISLAMIC BANKS WILL CONTINUE THE TREND THEY STARTED IN 2016 IN OUTPACING NET PROFITS OF CONVENTIONAL BANKS
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ISLAMIC BANKING
T
here are many arguments for why Islamic banks are superior to their conventional counterparts, but from 2010 to 2015 in the GCC, profitability was not one of them. In fact, in that time frame, GCC Islamic banks were less profitable, which, according to Moody’s, was due to their higher operating costs and the cost of risk, which outweighed their strength in margins, which were in fact more favorable than those of conventional banks.
But the tide began to change. The profitability gap slowly shrink starting in 2014 before disappearing completely. In 2016, Islamic banks actually surpassed the conventional heavyweights in the markets in terms of p r o f i ta bil it y, ‘h e l p e d b y continued stronger margins and an improved cost of risk p e r fo r m a n c e ’, a c c o r d i n g to Moody’s. And the good news for Islamic banks doesn’t end there. Moody’s expects this p o s i t i ve p e r fo r m a n c e t o continue in 2017, with Islamic banks set to once again report higher net profitability in comparison to conventional banks. “This reflects our view that the Islamic banks’ lower funding costs will support their margins against a backdrop of rising interest rates, while their cost of risk eases due to improvements in their risk management and asset quality,” said Nitish Bhojnagarwala, Assistant Vice President -- Analyst at Moody's. The Islamic banks’ stronger performance has been reflected in some recent rating actions in the GCC region.
ISLAMIC BANKS HAD WEAKER PROFITABILITY IN 2010-1015 Net Income/Tangible Assets Islamic Banks
Conventional Banks
2.0% 1.8% 1.6% 1.4% 1.2% 1.0% 2010 2011 2012 2013 2014 2015 Q3 2016 SOURCE: Banks' financial statements, Moody's Investors Service
ISLAMIC BANKS HAVE HIGHER CASA BALANCES CASA balances as a % of Customer Deposits Islamic Banks
Conventional Banks
70% 60%
58%
55%
50% 40%
37%
54% 41%
42%
45%
57%
56%
55%
54%
47%
45%
48%
30% 20% 10% 0%
2010 2011 2012 2013 2014 2015 Q3 2016
SOURCE: Banks' financial statements, Moody's Investors Service
In terms of their stronger margin, it is mainly driven by low funding costs, which is due to their reliance on current and savings account balances, as well as their higher asset yield tendency. This tendency is due to their focus on retail lending to the real estate sector, according to Bhojnagarwala. “We expect Islamic banks to retain a margin advantage of about 40 basis points over conventional banks in 2017. Islamic banks’ net profit margins are analogous to conventional banks’ net interest margins.”
While net profitability will surpass conventional, Islamic banks will remain less cost-efficient in 2017. This higher cost base, according to Bhojnagarwala, is due to the fact that they are “younger and because they are more focused on retail customers, entailing higher levels of investment in branch network and technology. Conventional banks in the GCC, in contrast, have already established their branch networks.” Another reason for the higher profitability is due to convergences in the cost of risk. cont. overleaf
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ISLAMIC BANKING
cont. from pg 17
“Higher impairment charges on loans and investments have historically dampened Islamic banks’ profitability,” said Bhojnagarwala. “However, we expect their diversification away from real estate lending towards other sectors, and their improving risk management practices, to reduce the pressure on their cost of risk over next 12-18 months.” Th e i m p r o v e m e n t i n the GCC Islamic banks’ profitability and broader risk profile has been reflected in recent rating actions. In the last 24 months, Moody’s has changed the rating outlook of two Islamic banks (Dubai Islamic Bank and Boubyan Bank) to positive from stable, upgraded the ratings of Qatar International Islamic Bank and Masraf Al Rayan; and affirmed the ratings of the largest Islamic bank in the world, Saudi Arabia-based Al Rajhi Bank, at a time when most bank ratings in the country were downgraded because economic headwinds were pressuring their standalone risk profiles. It is due to their favourable f u n d i n g s t r u c t u r e t h at Mo o dy ’s e x p e c t s Is l am ic banks’ to maintain stronger margins than conventional lenders. “The Islamic lenders’ are funded largely by current and savings accounts (CASA), a relatively stable and low cost form of funding. In GCC countries, retail customers at t a c h h i g h i m p o r t a n c e to Islamic banks’ ethical investment principles, providing the lenders with a large and stable base of
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ISLAMIC BANKS' HAVE STRONGER MARGINS Cost to Income Ratio Islamic Banks
3.5% 3.0% 2.5% 2.0% 2010 2011 2012 2013 2014 2015 Q3 2016 SOURCE: Banks' financial statements, Moody's Investors Service
ISLAMIC BANKS ARE LESS COST-EFFICIENT THAN THEIR CONVENTIONAL PEERS Cost to Income Ratio Islamic Banks
Conventional Banks
45%
40%
35%
30% 2010 2011 2012 2013 2014 2015 Q3 2016 SOURCE: Banks' financial statements, Moody's Investors Service
COST OF RISK HAS IMPROVED FOR ISLAMIC BANKS Loan Loss Provision to Pre-Provision Income Islamic Banks
Conventional Banks
35% 30% 25% 20% 15% Q3 2016 2010 2011 2012 2013 2014 2015 SOURCE: Banks' financial statements, Moody's Investors Service
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Conventional Banks
4.0%
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ISLAMIC BANKING
LIST OF RATED FULLY-FLEDGED ISLAMIC BANKS IN THE GCC* BASELINE CREDIT ASSESSMENT
ISSUER / DEPOSIT RATING
OUTLOOK
U nite d A ra b E m ira te s
ba2
A2
Negative
A hli U nite d B a nk K . S . C . P .
K uwa it
baa3
A2
Stable
3
A l H ila l B a nk P J S C
U nite d A ra b E m ira te s
ba2
A1
Negative
4
Al Rajhi Bank
Saudi Arabia
a3
A1
Stable
5
B a hra in I s la m ic B a nk
B a hra in
b3
Ba3
Stable
6
B a nk A l-J a z ira
S a ud i A ra b ia
baa3
Baa1
Stable
7
Bank AlBilad
Saudi Arabia
baa2
A3
Stable
8
B a rwa B a nk Q . S . C .
Q a ta r
baa3
A2
Stable
9
B o ub y a n B a nk K . S . C . P .
K uwa it
ba1
Baa1
10
D ub a i I s la m ic B a nk P J S C
U nite d A ra b E m ira te s
ba3
Baa1
Positive
11
Khaleeji Commercial Bank B.S.C
Bahrain
b1
Ba3
Negative
12
Kuwait Finance House K.S.C.P.
Kuwait
ba1
A1
Negative
13
Ma s ra f A l R a y a n ( Q . S . C . )
Q a ta r
baa2
A1
Stable
14
Qatar International Islamic Bank (Q.S.C.)
Qatar
baa3
A2
Stable
15
S ha rja h I s la m ic B a nk P J S C
U nite d A ra b E m ira te s
baa3
A3
Stable
16
W a rb a B a nk K . S . C . P .
K uwa it
ba3
Baa2
NO
NAME
DOMICILE
1
A b u D ha b i I s la m ic B a nk
2
Positive
Stable
* Moody's also include two unrated Islamic banks in their analysis. SOURCE: Banks' financial statements, Moody's Investors Service
low- cost CASA balances. This leads to weaker efficiency metrics, as the focus on retail customers requires extensive branch networks, but it supports the Islamic banks’ liquidity and profitability,” said Bhojnagarwala. Th i s l o w - c o s t f u n d i n g structure will be particularly beneficial in the current environment of rising interest rates, as upward pressure on borrowing costs will widen the Islamic banks’ cost of funding advantage, according to Bhojnagarwala. “This is because conventional banks hold higher balances of ratesensitive term deposits, which will reprice at higher l e ve l s , d r i v i n g u p t h e i r funding costs.” These factors, coupled with Islamic banks’ stronger retail and real estate lending franchise, 10 which tends to return higher yields, have consistently given them stronger margins than their conventional peers, according to Bhojnagarwala. However, their margin advantage narrowed
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between 2010 and 2015 as they diversified away from relatively high yielding real estate loans. High provisioning charges on loans and investments have dampened the profitability of Islamic banks in the past, but these charges have fallen in line with those of conventional peers in recent quarters, and Moody’s expects this trend to continue.
tangibility of property assets. This, combined with a lack of appropriate risk management practices, led to a deterioration in asset quality and an increase in impairment charges,” said Bhojnagarwala. Lower oil prices will continue to weigh on GCC economies, making the operating environment for banks more challenging. However,
Previously, a high proportion of these charges was driven by Islamic banks’ greater appetite for investing in the volatile real-estate sector, seen as closer to Shari’ah principles due to the tangibility of property assets. ANITISH BHOJNAGARWALA, Assistant Vice President – Analyst at Moody's
“ P r e v i o u s l y, a h i g h proportion of these charges was driven by Islamic banks’ greater appetite for investing in the volatile real-estate sector, seen as closer to Shari’ah principles due to the
Moody’s expects that sustained improvement in Islamic banks’ risk management, combined with more diversified lending, will continue to reduce the pressure on the cost of risks for Islamic banks.
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21/04/2017 17:43
ISLAMIC BANKING
The transformation of KFH Malaysia KFH MALAYSIA HAS LAID THE GROUNDWORK FOR TRUE INNOVATION, WRITES CHIEF STRATEGY, PMO AND COMMUNICATIONS MOMTAZ SAIF
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18/04/2017 11:10
ISLAMIC BANKING
W
ith the dynamic shift in the banking industry and the focus to be more digital, a clear, strategic direction is fundamental to ensure the sustainability of the bank is assured. KFH Malaysia recognises the scale the Group has and consequently will leverage on the Group’s presence and capability t o s u p p o r t o n d e l i ve r i n g against the transformation programme introduced within the organisation. The overall objective is to position KFH Malaysia as a key subsidiary and as a launch pad to be able to tap into this region. Equipped with a clear focus, and a drive to succeed, we have established some key building blocks that will drive the transformation: (Abdul Razak Latif/SHUTTERSTOCK)
PEOPLE
Malaysia’s Islamic finance market is one of the world’s leaders, and KFH Malaysia helps lead the way.
Our people are our most valuable asset and we rely on their support, their energy and their buy-in to change. Change is not always welcome and more often than not can be hindered if our employees do not believe in the change and the outcome of the transformation. As such, we have established a series of communication sessions with our employees to communicate the progress of the programme and have opened up a direct link between the employees and the Executive Management team ensuring all employees are heard.
To accelerate the transformation, the bank has recruited new leadership to support the existing local talent, who are the bedrock of the organisation. The leadership
The notion of working in a collective manner to achieve these goals is enthusing and the measures of our success will soon become evident through our employees. team possess a vast amount of industry and role specific experience and thus are working on a collaborative, collective manner to guide the change.
REGULATORY Islamic banking has and will continue to be a top priority for the Malaysian Government and this weight enables KFH Malaysia to set the pace of its growth and to be able to leverage upon this focus and available frameworks is paramount to our success.
CUSTOMER Our customers should have the option as to how they bank with us and with the focus on digital realisation, one of our key initiatives to support the customer experience is the upgrade of our entire infrastructure for the bank. This will enable us to transition into the digital realm. cont. overleaf
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ISLAMIC BANKING
cont. from pg 21
To ensure our direction is closely aligned with the Group, our immediate imperatives will be our enhanced website, the development of mobile apps, and a revised online banking platform.
CULTURAL SHIFT Our goal is to provide a ‘SIMPLER - BETTER – FASTER’ experience to our stakeholders, our customers and our employees, and therefore our strategic imperatives will underpin these values. For example, we will inject agile programme management into our organisation allowing faster decision making, we will leverage on the Group and its 17000 employees across different industries to ensure we are better at what we do and our overall approach is embedded with simplicity and transparency. From a procedural perspective, the inclusion of a revised governance framework will enable oversight and delegation to allow for rapid decision making and a baseline of the current performance management process has realised the need to enhance the existing process w i t h s t r o n g p e r fo r m a n c e management scorecards with shared goals to ensure alignment with the business focus and product launches. The notion of working in a collective manner to achieve these goals is enthusing and the measures of our success will soon become evident through our employees. The outcome of our recent employee engagement survey allowed us to prioritise key themes and focus areas to address. Subsequently, a definitive set of
22
MOMTAZ SAIF, Chief Strategy, PMO and Communications, KFH Malaysia
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action plans will be implemented to ensure we address these areas of concern and our measures of success will be seen through employee feedback and ongoing engagement surveys. Additionally, with the success of one of the Group HR programmes in Kuwait, we have extended the same into KFH Malaysia. Establishing a clear employee value proposition with a reciprocal purpose is also a key strategic item and as such, the launch of the INSPIRE values initiative will generate some excitement, create a close association to the overall transformation plan and provide a guide for our employees to attribute to.
In essence, INSPIRE is all about how we conduct business, w i t h i n t e g r i t y, p a s s i o n , team work and the ability to succeed and using these value statements, the ‘WE CARE’ programme was introduced. Our goal is to be seen as genuine and how we conduct our business will always be with a level of sincerity coupled with passion and energy. We are relying on our historical, humble beginnings and combining with the new technological advancements to create an exciting digitally transformed Islamic Bank and we look forward to witnessing our own journey.
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20/04/2017 14:04
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18/04/2017 11:05
ISLAMIC BANKING
Gaining customers’ trust BAHRAIN ISLAMIC BANK CHIEF EXECUTIVE OFFICER HASSAN AMIN JARRAR SPOKE WITH ISLAMIC BUSINESS & FINANCE AT WIBC 2016 ON HIS STRATEGY FOR BRINGING MORE CLIENTS TO ISLAMIC BANKING
H
HASSAN AMIN JARRAR, CEO, Bahrain Islamic Bank
ow has your journey been with Bahrain Islamic Bank so far?
Why did you want to switch from conventional to Islamic?
I joined the bank 14 months ago. I was the CEO of Standard Chartered, a conventional foreign bank, and switched to Islamic banking. Bahrain Islamic is a very well known name in the region. We were the fist Islamic bank in the country and one of the first in the region. The bank has a long heritage in this field, but in the last 14 months or so we are reinventing the bank. We are taking it into a completely different direction. We are emphasising digitisation, more services, more products, more wealth management, and more. We offer full service commercial and consumer banking facilities. We are switching from the traditional approach of investment and financing of real estate into a much more commercial bank in serving companies as well as individuals. Business has been good as well as challenging. Times are challenging in Bahrain as well as in the region as a whole for various region. Geopolitics, drop in oil prices, liquidity pressures, and more— but that is enough right there!
I fell in love with Bahrain. I did not want to be transferred by Standard Chartered to another country, it was a simple as that. And then the allure of coming in and reengineering the oldest Islamic bank in the country was very attractive to me. The challenge was too hard to resist and the transition has been very smooth. The two places have very different paradigms and neither one is perfect but the luxury that I have is that I get a chance to use my knowledge of both worlds to help create the best bank in Bahrain. We’re not pigeon-holing it as an Islamic bank—I want to be known as a bank who happens to run on Islamic principles. When you say ‘Islamic’ you’re immediately labelled—I do not want that. We’re going with ‘ethical banking’—but in order to say ethical banking, you better be able to deliver. You better make sure that your bank is clean, your staff has the proper culture. It’s a big challenge to genuinely call yourself an ethical bank right now, but it sure is a great aspiration. cont. overleaf
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cont. from pg 25
I’m a believer that engagement with staff and engagement with clients is absolutely key to our business. You have to, as a CEO, flatten your organisation—you have to have fewer layers between you and your staff to make sure that you communicate with them and they hear you correctly, because messaging is so important when you’re trying to reengineer your place. We have an open door policy with staff and with clients as well. Anyone in the bank can come in, knock on my door, and walk in. If not, make an appointment, and I will see them, no matter what. We do the same thing with clients. We do not wait for clients to come to us, though, we go out to see clients. We visit them at their places of business. We also do engagement with the community. As an Islamic bank, you have to live up to that name. So you reach out to the community whether it’s volunteer work or mentoring of college kids, career planning and development for recent graduates. We’re also hugely engaged with ministries—we have a superb relationship with the Ministry of Labour and the Central Bank of Bahrain. We’re engaged at all levels. It’s a lot of work, but if you do not do it you become garden variety just like every other bank.
When you go to clients, what is the main approach that you use to attract them to working with you? Customers have to trust you—they really do. And there has to be something in it for both them and you. ‘Win-win’ is a cliché, but it’s true. I tell clients, there are plenty of banks out there, and unless it’s good for you, and good for us, then let’s not go forward. What that means is I have to have the products and the services to provide to them exactly what they need. The nature of the product, the features, and the pricing has to work for them. Their risk has to be settled by me as a bank. Is there business in my strategic target settlement? For example, if I do not finance a certain industry, I do not go see clients in that, it doesn’t make sense. It has to be a good fit for both of you. I do not believe in booking a client just to make money—that is called transactions. We want relationships—we want to do deals to build long-term relationships, and we do that by seeing them more, listening to what they have to say, understanding their
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needs and their requirements. It’s just like providing any other service. We are approached for customers for certain transactions, and if it’s a single transaction that is not going to result in a relationship, we do not pursue it, and we tell clients that this isn’t good for either of us. Banking is no different from any other service, except for the fact that there is more emotion in it because people’s money is involved and it’s much more difficult to leave a bank as a customer than a grocery store—especially if you have a lot of products and services with the bank.
It’s a big challenge to genuinely call yourself an ethical bank right now, but it sure is a great aspiration. HASSAN AMIN JARRAR, CEO, Bahrain Islamic Bank
There are clients out there that will bank with an Islamic bank only based on faith. They will put up with poor services, higher costs, and complications as a result. On the other end of the spectrum you have clients who will never bank with an Islamic bank because they think they’re complicated, non-innovative, expensive and so on. So as an Islamic bank you have to position yourself as a bank that provides value for the customer. The difference between both is that the silent majority in the middle. You do not know how many they are until you try to compete with conventional banks without appealing to the faith-side of the customer. Most customers at the end of the day, once you show them the value proposition, they will become agnostic to what type of bank you are. They ask, is the service suitable for them? Is the price suitable for them? Can they trust you? Do they like you? If they like you and trust you, they will most likely give you their business. And that likability and trust comes from being engaged and doing a lot of transactions over and over again and doing them well.
If customers choose to work with a conventional bank, how do you work to address that so they will want to work with you in the future? You need to demonstrate to an Islamic bank that you are a good bank and offer good service.
www.islamicbusinessandfinance.com
20/04/2017 14:06
ISLAMIC BANKING
I had a French gentleman in my office who was trying to sell me something—he’s the CEO of a financial institution. I was telling him one day about how we want to penetrate the non-Muslim segment, and he pulls out his ATM card for our bank! He says, ‘I already bank with you—best bank I ever worked with!’ He wasn’t an Arab, he wasn’t a Muslim. To me, that is a tremendous testimony. If we can do that, and we can have him become an ambassador, and we can make people of all backgrounds feel comfortable in our bank, then we are well on our way. We have to provide superb service and we have to make people feel they belong there. Historically because of Shari’ah compliance, Islamic banks can not offer ever ything conventional banks do. For example, conventional banks can sell you something that they do not own. In an Islamic bank, you cannot do that. During the financial crisis, it was demonstrated that had most financial institutions followed Islamic principles, you would not have had the financial crisis, or it would not have been as severe. So can I offer everything a conventional bank can? No, and I should not. But there is a lot of things you can do now that you could not do ten years ago. For example, 10 years ago you could not do overdraft. Now you can, or now, at least, my bank can. You were not able to do a lot of derivatives in currency exchange, now we do and now we can. So the divide is pulling closer. There are still some things that conventional banks do that Islamic banks should not do.
What products should Islamic banks not offer? Complicated derivative transactions. Ninety per cent of customers, and 90 per cent of the bankers selling them, do not understand what they are selling. This is because the model was built by a younger by an MIT PhD that no one fully understands! I challenge you to find someone who isn’t a mathematician from MIT that fully understands them. I’ve been working in banking for 30 years and even I do not fully understand them! The last thing I want is for a customer of mine to come and say to me, ‘I lost money with you because your relationship manager said that I would make seven per cent but failed to tell me the downside!’ there is a
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lot that conventional banks do that we should not be doing. We started—we hired a specialist from outside the industry. We’re about seven months into it and we should have a pretty good digital programme by third quarter 2017. Why that long? Because as a traditional bank, it’s very difficult to actually switch. You have to make sure you work out the bugs, because if you launch something, and it fails, it’s very difficult to recover from.
Banking is no different from any other service, except for the fact that there is more emotion in it because people’s money is involved and it’s much more difficult to leave a bank as a customer than a grocery store—especially if you have a lot of products and services with the bank. HASSAN AMIN JARRAR
Instead of opening more brick and mortar branches, we will open digital branches. It takes a lot of education and work to change the behaviour of consumers, but if we do not do that, we will simply die.
Do you find that the Islamic banks underserve the high-net-worth community? Yes. Wealth management is a lot of times about offering points, access to lounges in airports, and I think you need to go beyond that. You need to provide value. Do I have products? Do I have enough people to sit with you, depending on your age and risk appetite, to draw your asset allocation model for you, and give you a menu of funds to choose? Most of us do not have that. We are working on it. We are looking at whitelabel funds, and we are working on partnering with world-class institutions that do this better than us than invent it. We’re talking to a couple Swiss banks—very famous ones. I cannot say the names just yet. But we’re telling them that they can come have access to our customer base, and they love the idea. As of now we underserve the HNWI community, but Bahrain Islamic Bank is working on it.
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20/04/2017 14:07
EXPERT OPINION
28
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18/04/2017 11:14
EXPERT OPINION
A new normal for Islamic finance? DR. MOHAMED DAMAK, SENIOR DIRECTOR AND GLOBAL HEAD OF ISLAMIC FINANCE, S&P GLOBAL RATINGS ROUNDS UP THE BIGGEST DEVELOPMENTS IN ISLAMIC FINANCE IN 2017
E
xpectations of the growth of Islamic finance have outweighed the sector’s actual performance over the last couple of years. While the industry is, in our opinion, on course to reach $3 trillion in the next decade, [a 43 per cent increase on the current estimated size of $2.1 trillion], growth will remain muted at around five per cent in 2017. Is this growth rate the new normal for Islamic finance? To answer this, we need to look at the growth drivers of Islamic finance: primarily the oil-exporting countries of the GCC, as well as Malaysia and Iran, which together account for more than 80 per cent of the industry’s assets. Given the dependence of these core Islamic finance markets on oil—and our expectations that oil price will stabilise around $50 per barrel in 2017—economic growth in these countries is expected to remain limited.
Malaysia and Iran could be considered as outliers in this environment. S&P Global Ratings expects GDP growth in Malaysia to reach 4.2 per cent in 2017/18, thanks to its diversified economy, of which the gas and oil sectors make up just 10 per cent of GDP. In addition, Malaysia has introduced various policies such as the removal of oil subsidies and a six per cent goods and service tax to counter the impact of oil price fluctuations. On the other hand, after some sanctions removal, Iran’s financing needs are reportedly high. Nevertheless, the country will only contribute effectively to the growth of the Islamic finance industry once the regulatory environment has matured and remaining sanctions/restrictions are lifted. Policy responses to the drop in oil prices are being implemented in the GCC countries and while the magnitude and the efforts to diversify economies vary from cont. overleaf
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EXPERT OPINION
cont. from pg 29
country to country, the low oil price environment will continue to weigh negatively on economic growth in the GCC in the next two years. There is little wonder then that Islamic finance will be negatively impacted as a result.
ISLAMIC BANKS Islamic banks’ asset growth started declining in 2015, falling to seven per cent from 12 per cent a year earlier. Growth rate remained muted in 2016 at around six per cent and we expect it to stabilise at around five per cent in 2017. Governments and their related entities make up between 20 per cent and 40 per cent of GCC banks deposit bases and the inflow largely depends on oil prices. With lower oil prices meaning lower liquidity, bank’s cost of funding has increased. Similarly, lower economic growth has exposed vulnerable borrowers, primarily sub - contractors and SMEs resulting in higher defaults and larger provisioning needs. This led to a decline in banks’ profitability, prompting some to limit or reduce their cost base. The debate around consolidation has also resurfaced. The merger between First Gulf Bank and National Bank of Abu Dhabi in the UAE that was finalised in March is a good illustration. However, we consider it as a n e x c e p t i o n r at h e r t h a n the new norm.
SUKUK 2016 has been an impressive year for conventional debt issuance in the GCC, which, spurred by the falling oil price, almost doubled in 2016 compared with 2015. However, contrary to market expectations, GCC Sukuk
30
issuance actually dropped by six per cent in 2016, thus not living up to its countercyclical role in Islamic finance markets some had hoped for. GCC countries governments tapped conventional sources of liquidity contributing to the decline in Sukuk in 2016 and we attribute that primarily to the complexity of the process of issuing Sukuk. In the first quarter of 2017, we have seen an increase in Sukuk volume issuance but we think this was primarily due to some issuers’ front loading their issuance plans ahead of the
The complexity of issuing Sukuk is a key factor in the muted performance of the market as issuers turned to conventional debt, which is generally regarded as more efficient from an issuance process perspective. DR. MOHAMED DAMAK, Senior Director and Global Head of Islamic Finance, S&P Global Ratings
Federal Reserve rates increase. S&P Global Ratings still expects the volume of Sukuk issuance to remain subdued in 2017, with total Sukuk issuance around $60 billion-$65 billion. This comes down to two factors: complexity and market conditions. The complexity of issuing Sukuk is a key factor in the muted performance of the market as issuers turned to conventional debt, which is generally regarded as more efficient from an issuance process perspective. Malaysia is, again, an exception here, where the process for issuing Sukuk is reportedly as efficient as it is for conventional bonds. Very little was achieved in 2016 to standardise Sukuk issuance
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despite commendable efforts by some of the market heavyweights and there is still a long way to go to achieve the market desired level of standardisation. Secondly, the increase in Fed rate may squeeze liquidity and increase the cost of funding for issuers. Our base case scenario assumes that the Fed will increase the rates two to three times this year (including the increase that took place few weeks ago). This could dampen investors’ appetite for Sukuk as a component of global capital markets.
Conversely, the European Central Bank is likely to adopt a more dovish stance and the tapering of bond purchases by the ECB is not expected to occur in the next few months. Liquidity from developed markets is therefore expected to continue leaking to some emerging markets in general, and to the Sukuk market in particular, as investors search for higher yields. Of the GCC countries, Bahrain is likely to remain a prominent player in the Sukuk industry while the other members are expected to tap the market this year. Malaysia and Indonesia will also play a significant role following their 2016 Sukuk issues of $28.4 billion and $7.3 billion respectively in 2016.
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18/04/2017 11:14
EXPERT OPINION
Similar to Hong Kong which returned to the market in the first quarter of 2017 raising $1 billion, Senegal and Cote d’Ivoire might also come back again in 2017.
TAKAFUL The trend is echoed in the takaful sector, where premiums growth rate has been declining. While this slowdown is likely to persist in 2017, potential growth could come from a regulatory push and development in Islamic finance more generally. For example, insurance penetration in core Islamic markets is still well below the global average premium to GDP, making up just one to two per cent in the six GCC countries. The introduction of compulsory health insurance in the Dubai and further regulatory environment revisions could create opportunities for the sector.
OUTLOOK While we expect growth to remain muted for the Islamic finance industry at five per cent in 2017, there is some potential for further growth with a few prerequisites. Firstly, more involvement b y m u l t i n at i o n a l l e n d i n g institutions in Islamic finance through Sukuk issuance and Islamic product offerings could revive stronger growth. More standardisation in legal structure and Shari’ah interpretation is critical to put the industry back on a strong growth path. If standardisation is achieved, there will be more capacity to devote to innovation and creation of new Islamic finance instruments, which could foster growth. Lastly, more integration of the industry will help its transformation from a collection
of small industries to a truly globalised sector. Cross-border acquisitions may help the industry unite its Shari’ah interpretation while further progress could be achieved if regulators create a more supportive regulatory environment. Further integration between all of the sectors that form the Islamic economy would
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page 28-31 Expert Opinion 102.indd 31
result in a more united industry, with universities providing the necessary training to foster the next generation of Islamic finance professionals. United and more integrated the industry could achieve higher growth rate and increase its attraction to new players exploring the opportunities it offers.
Dr. Mohamed Damak
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20/04/2017 14:10
(Zapp2Photo/SHUTTERSTOCK)
ISLAMIC TECH
In a once disruptive industry, tech is the way forward to continue that innovative path.
Thinking like a start-up FINTECH ADOPTION IS THE NEXT BIG PHASE FOR THE ISLAMIC FINANCE INDUSTRY ASHAR NAZIM, PARTNER, EY TOLD IB&F AT THE WIBC 2016
I
n the last 20 years of Islamic banking have been about innovation in Shari’ah contracts, and Shari’ah products. There is industry consensus that we have reached a mature level when it comes to innovation when it comes to Shari’ah products. The next 20 years is going to be about combining smart technologies with Islamic finance in order to grow further. cont. on pg 34
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ISLAMIC TECH
cont. from pg 32
As a result of that, we believe that the introduction of fintech is going to increase the Islamic finance customer base, which is roughly around 100 million customers, to around 250 million by 2020, more than doubling the number of customers. This could happen only with the proper adoption of fintech technology. But there are challenges. In the last year, when we speak to banks and when we speak to customers, they have told us that most growth has plateaued. While the Islamic finance industry’s growth is still ahead of conventional, growth is slowing down. And this is happening for a good reason—in a number of markets, Islamic finance has gone mainstream, meaning crossing or reaching 30 per cent market share. This sets up a different dynamic. Once maturity hits, growth requires three game changes, based on how we see it. First, there has to be a transition of the industry from finance intermediation to investment intermediation. Second, fintech should not be seen as a threat or competition, and more and more CEOs are saying the same thing. There is tremendous potential for collaboration between the GCC and Malaysia in the fintech space. Because what is fintech? These are smart technologies that help you talk better, be more transparent, and increase the level of trust and speed in which you do your transactions. There is a growing realisation a m o n g s t b a n k s t h at t h e y cannot afford to do everything by themselves. There has to be collaboration within the industry. At the moment we are seeing collaboration at a national level, and the next collaboration will be at the cross
34
country level. The next 20 years will be about collaborating in terms of smart technologies to better intermediate investments cross country. Th i r d l y , t h e b i g g e s t bottleneck to the transition between Shari’ah innovation and technological innovation is leadership of the Islamic finance industry. When industries get too big, leadership naturally becomes more distrustful of innovation. We have come to this realisation through our extensive analysis. This wasn’t always the case in this industry. Islamic finance was
Bringing a technology by itself is no use unless the organisational culture changes. ASHAR NAZIM, Partner, EY
once a disruption to conventional finance when it came into being. Fintech is now disrupting the overall financial world. So why are the big boys slower to adapt to this technology? Because they’ve got so much legacy business to protect. You see a lot more agility from start ups. Deposit business is being disrupted by m-wallet. Financing business is being disrupted by peer-to-peer platforms. Business operations are being disrupted by robotics. Trade finance is being disrupted by blockchain. Right now, Islamic finance’s leaders are still in their dismissive stage. This is a natural reaction.
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page 32-34 Islamic Tech 102.indd 34
When there is a radical new idea, the first reaction of a human brain is to dismiss it. Then comes acceptance, then excitement, then adoption, then accepting the harsh realities of that implementation. When it comes to fintech, the Islamic finance industry has to change, and start thinking like a start up. That requires a complete change in behaviour economics in terms of how organisations are run. The next 20 years will be about two things: one a change in behaviour mindset, and the coming of smart technologies. Bringing a technology by itself is
no use unless the organisational culture changes. Islamic institutions, we would argue, are in a better position because they are smaller, more nimble, and more local than most conventional competitors. When these things happen, what is going to happen? It is going to address a lot of the critiques of Islamic finance— the critiques that it is only a change in terminology from conventional finance. The reason for this is that with fintech, you can bring down the cost of intermediation, and you’re able to pass on the real returns to depositors and small savers.
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SUKUK
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Dubai’s Sukuk issuances now highest in world WITH A FLURRY OF BIG MOVES IN THE FIRST QUARTER, DUBAI’S SUKUK LISTING IS BIGGER THAN ANY OTHER MARKET, WITH $53.31 BILLION IN VALUE
36
Islamic Business & Finance | ISSUE 102
page 36-39 Sukuk-102.indd 36
www.islamicbusinessandfinance.com
18/04/2017 10:38
SUKUK
S
ince Dubai first announced its intention to become the capital of the Islamic economy, much progress has been made. The key pillars of Islamic finance have each developed in different ways, but Sukuk may be the pillar that shines the most brightly. This was exemplified in the first quarter of 2017, with Nasdaq Dubai seeing some marquee listings pop up one after another.
We aim to provide issuers with maximum flexibility and streamlined procedures before listing, as well as efficient postlisting infrastructure and visibility. HAMED ALI, Chief Executive of Nasdaq Dubai
On the way to becoming the Islamic's capital, Dubai is making impressive strides in Sukuk.
Global Sukuk issuance reached $72.9 billion globally in 2016 according to RAM Ratings Services, with Islamic finance assets as a whole valued at more than $2 trillion, and thus far, 2017 has continued that momentum. February saw the announcement of Dubai Islamic Bank (DIB)’s latest $1 billion Sukuk, for which Mohamed Abdulla Al Nahdi, Deputy Chief Executive of DIB, rang the bell on 1 March. The bell-ringing took place in the presence of Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, Hamed Ali, Chief Executive of Nasdaq Dubai, and senior Nasdaq Dubai and DIB executives. The listing, carried out under DIB’ $5 billion Sukuk Programme, was the largest senior Sukuk issuance by a financial institution globally. It brings the total value
of DIB’s current Sukuk listings on Nasdaq Dubai to $4.25 billion, more than any other UAE issuer. DIB, UAE’s largest Islamic bank, often leads the way in the emirate’s Islamic economy. This issuance carries the additional accolade of being the largest ever such transaction by an Islamic bank in the history of Islamic capital markets. “As a leading Islamic bank, we are committed to promoting successful Shari’ah-compliant financing solutions that support economic development in Dubai and the growth of its Islamic finance infrastructure. Nasdaq Dubai not only provides us with excellent links to investors both regionally and globally but also strong visibility in the marketplace with a wellregulated listing platform,” Dr. Adnan Chilwan, Group CEO, DIB said. The DIB Sukuk listing, which took place on 15 February 2017, raises the total value of all Sukuk listed on Nasdaq Dubai to $45.06 billion, further strengthening the exchange’s position as the world’s largest exchange for Sukuk listings by value. Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, echoed the importance of that relationship. “DIB is one of the key issuers on Nasdaq Dubai and our close relationship supports Dubai’s growth as the global Capital of the Islamic Economy, under the initiative launched by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minster, and Ruler of Dubai. We are working to further strengthen our relationship with DIB as well as other regional and global Islamic finance institutions.”
“As we prepare for further growth in the Sukuk sector regionally and globally, Nasdaq Dubai will constantly enhance its listing processes and links to investors. We aim to provide issuers with maximum flexibility and streamlined procedures before listing, as well as efficient post-listing infrastructure and visibility,” Hamed Ali, Chief Executive of Nasdaq Dubai, said. DIB’s earlier Sukuk listings on Nasdaq Dubai comprise a $1 billion listing in 2013, two listings in 2015 respectively of $750 million and $1 billion.
SOVEREIGN LISTINGS REACH LANDMARK Soon after DIB’s landmark Sukuk issuance, Nasdaq Dubai welcomed the listing of a $1 billion Sukuk issued by the Government of Hong Kong on 1 March. The move was hinted at exclusively to Islamic Business & Finance early in 2016 on the sidelines of the Asian Financial Forum, where Hong Kong reaffirmed its commitment to Islamic finance and its instruments to this publication and offered the possibility of more issuance to come. The listing brings the total value of Hong Kong Government Sukuk listed on the Middle East’s international financial exchange to $3 billion, following two listings of $1 billion each in 2014 and 2015. Th e m o ve s t r e n g t h e n e d Dubai’s position as the world’s largest venue for Sukuk listings by value, raising the total listed in the emirate to $48.81, which has come from a wide range of government, multilateral and corporate issuers across the MENA region and East Asia. cont. overleaf
www.islamicbusinessandfinance.com
page 36-39 Sukuk-102.indd 37
ISSUE 102 | Islamic Business & Finance
37
18/04/2017 10:38
SUKUK
cont. from pg 37
Soon after, the Government of Indonesia listed two Sukuk with a total value of $3 billion on Nasdaq Dubai. This move was most significant as it raised the total nominal value of all Sukuk listed in Dubai above $50 billion for the first time, to a global record high of $52.06 billion. The Indonesian government is the largest issuer on the exchange, with a total value of $11.5 billion from eight listings. Other leading issuers include Saudi-based Islamic Development Bank with $8.5 billion and the aformentioned Government of Hong Kong with $3 billion.
38
“The channelling of Sukuk listings into Dubai reflects the growing collaboration between Islamic finance practitioners based in different parts of the world. By pooling our knowhow and respective traditions, we are creating a more dynamic global industry that better meets the commercial and social needs of everyone who seeks the growth and development of Shari’ah-compliant finance,” said Dr. Robert Pakpahan, Director General of Budget Financing and Risk Management, Ministry of Finance–Republic of Indonesia. “The rapid expansion of Dubai’s Sukuk market is based on intellectual as well as financial
Islamic Business & Finance | ISSUE 102
page 36-39 Sukuk-102.indd 38
The rapid expansion of Dubai’s Sukuk market is based on intellectual as well as financial input from a wide range of issuers, investors and market participants based in dozens of countries. HAMED ALI, Chief Executive of Nasdaq Dubai
www.islamicbusinessandfinance.com
18/04/2017 10:38
SUKUK
input from a wide range of issuers, investors and market participants based in dozens of countries. There is a common desire to come together to achieve new standards of excellence and efficiency and Dubai will further strengthen its role as a facilitator of this process,” Hamed Ali, Chief Executive of Nasdaq Dubai, said. Indonesia’s latest Sukuk listings comprise one issuance of $2 billion and another of $1 billion.
LARGEST ISSUER PUSHES HIGHER In mid-April, Nasdaq Dubai welcomed a listing of a $1.25
billion Sukuk issued by the Islamic Development Bank (IDB), the eight Sukuk listing on the exchange by IDB. The move made IDB one of the largest Sukuk issuers by value on Nasdaq Dubai at $9.8 billion. Based in Saudi Arabia, the IDB has 57 member countries and its activities are designed to foster their economic development and social progress. According to Nasdaq Dubai, the reason for the continued relationship is that it provides the IDB and its other regional and international issuers with close links to investors around
www.islamicbusinessandfinance.com
page 36-39 Sukuk-102.indd 39
Mohamed Abdulla Al Nahdi, Deputy Chief Executive of DIB, relebrates the listing by ringing the bell at Nasdaq Dubai on 1 March.
the world as well as a first-class listing infrastructure. The move pushed Nasdaq Dubai’s record even higher. Dubai’s Sukuk listings have now reached a total nominal value of $53.31 billion, the highest total of any listing venue in the world. Nasdaq Dubai’s further activities to promote the expansion of the Sukuk sector include working with the government of Tunisia to create a framework there for developing Sukuk financing. The exchange together with IdealRatings launched benchmark indices that track the performance of global Sukuk in October 2016.
ISSUE 102 | Islamic Business & Finance
39
21/04/2017 17:44
SUKUK
OUTSTANDING SUKUK MAP OUTSTANDING SUKUK MAP
THE SIZE OF THE OUTSTANDING SUKUK MARKET GLOBALLY AS OF 15 APRIL 2017 The size of the outstanding Sukuk market globally as of 06 Nov 2016
SOURCE: Zawya Islamic
ANNOUNCED/OPEN SUKUK IN APRIL 2017 STATUS
ISSUER NAME
SUKUK NAME
SUKUK STRUCTURE
COUNTRY
CURRENCY
SUBSC. DATE
ISSUE SIZE ($M)
MARGIN
TENOR
ARRANGER/ADVISOR
Announced
Cahya Mata Sarawak Bhd
Cahya Mata Sarawak Sukuk Ijarah Program
Ijarah
Malaysia
MYR
-
-
-
-
-
Announced
ICD Sukuk Company Limited
ICD Sukuk Company Limited. 5.000% 1 Feb 2027
Unknown
Saudi Arabia
USD
1 Feb-17
1,000
-
15 years
ICD
Announced
Hong Kong Sukuk 2017Limited
Hong Kong Sukuk Ltd 3.132% 28 Feb 2027
Unknown
Hong Kong
USD
27-Feb-17
1,000
-
15 years
-
Announced
Warba Tier 1
Warba Tier 1 Sukuk Ltd 6.500% PRP
Unknown
Kuwait
USD
14 March-17
250
-
-
Warba Bank
Announced
Perusahaan Penerbit SBSN Indonesia III
Indonesia III 4.150% 28 Mar 27 - Reg S
Unknown
Indonesia
USD
29 March-17
1,725.4
-
15 years
-
Announced
Perusahaan Penerbit SBSN Indonesia III
Indonesia III 4.150% 28 Mar 27 - 144A
Unknown
Indonesia
USD
29 March-17
274.6
-
15 years
-
Perusahaan Penerbit SBSN Indonesia III
Indonesia III 3.400% 29 Mar 22 - Reg S
Unknown
Indonesia
USD
29 March-17
855.62
-
10 years
-
Announced
Perusahaan Penerbit SBSN Indonesia III
Indonesia III 3.400% 29 Mar 22 - 144a
Unknown
Indonesia
USD
29 March-17
144.38
-
10 years
-
Announced
IDB Trust Services Limited
IDB Trust Services Ltd 2.393% 12 April 22
Unknown
Saudi Arabia
USD
12-April 17
1,250
-
10 years
IDB
Announced
DIB Sukuk Limited
DIB Sukuk 14 Feb 2-22
UAE
USD
15-Feb-17
1,000
Dubai Islamic Bank
SOURCE: Zawya Islamic
40
Islamic Business & Finance | ISSUE 102
page 40 Market Watch_102.indd 40
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20/04/2017 15:58
Strategic Strategic Partners Partners
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In Cooperation with In Cooperation with
18/04/2017 18:20
TAKAFUL
HE EBRAHIM OBAID AL ZAABI delivers the inaugural address at the 12th Annual World Takaful Conference.
A focus on Takaful’s future AT THE 12TH ANNUAL WORLD TAKAFUL CONFERENCE, OVER 350 TAKAFUL LEADERS CONVERGED WITH THE AIM OF FOSTERING INDUSTRY-WIDE COLLABORATION AND DIGITAL INNOVATION 42
Islamic Business & Finance | ISSUE 102
page 42-44 Takaful 102.indd 42
www.islamicbusinessandfinance.com
18/04/2017 10:46
TAKAFUL
W
ith all the ground that the Takaful industry has broken, with all the progress has made, it has a long way to go before it achieves its potential. To address this important issue, 350 of the Takaful industry’s key players travelled from across the Islamic finance world to take part in the 12th annual World Takaful Conference (WTC). Convened once again by Middle East Global Advisors in partnership with the Dubai International Financial Centre (DIFC), this year’s edition tackled the theme ‘Stability, Authenticity and Technological Transformation’.
It is important to continuously engage with your customers to digitise the most compelling and complex processes. ANSHUL SRIVASTAV, CIO & Digital Officer, Union Insurance
One thing was made clear from the outset—if the industry is to achieve that aforementioned potential it is going to have to work together. Renowned industry regulator HE Ebrahim Obaid Al Zaabi, Director General, Insurance Authority (IA) UAE, delivered the opening address to stress exactly that—the need for more collaboration amongst both regulators and standard setters to address the prevalent fragmentation of the Takaful industry. Shedding light on the importance of improving market competitiveness and performance through regulatory enhancements, HE Al Zaabi, said, “The Takaful sector is one
of the most prominent evidences of the products and services that comply with Islamic Shari’ah. There are a lot of white spots that enlighten the development of this sector during the last stage; most prominent of which are the continued growth of this sector and the increasing demand for various types of Takaful products. However, despite the specific laws that have been issued in many countries, we are still in a bad need of preparing Islamic financial systems that cope with the economic changes and overcome the challenges.” Adding further, HE Al Zaabi said, “The UAE is considered a leader in the global Takaful industry and the world’s leader in the Islamic financial transaction codification initiatives. Compared with 2008, the total investments have also increased by 579 per cent to reach AED 4.323 billion in 2016. The World Takaful Conference is contributing to the Takaful sector consolidation in the region and the world.” S a l m a a n J a f f e r y, C h i e f Business Development Officer, Dubai International Financial Centre (DIFC) Authority, placed focus on the technological side of the equation, which was more prevalent at this year’s summit than ever before. “There is an appetite to do more in Islamic fintech. Islamic Takaful Insurance is growing and is underpenetrated and being taken up by the younger generation who embrace new technology. Innovation in products without innovation in business models, AI, dig data, algorithms–is suboptimal. By partnering with the World Takaful Conference, DIFC is demonstrating its commitment to encouraging dialogue in these areas, supporting the
worldwide Islamic economy and helping it achieve long-term, sustainable growth.” Others echoed that need. “The growth in the Takaful industry is double-digit and is here to stay. However, to continue to meet profitability, the industry would need to meet customer needs and embrace modern technology and global best risk management practices,” Safder Jaffer, Managing Director & Consulting Actuary – Middle East & Africa, Milliman, said.
EMBRACING THE INSURTECH ERA On day two of the WTC, the conference made its first standalone leap into insurance technology– InsurTech Integrated. The day brought together both the leaders of Takaful and those from the technology space, under the theme of “Harnessing Disruptive Technologies to Thrive in a Digital Era”. Innovation is coming to Takaful, and the Takaful industry better adapt sooner than later. This was made clear by Peter Englund, Head of Commerical Insurance Middle East, Zurich Insurance, who addressed the packed room. “The insurance industry is on the brink of a major technologydriven transformation. Digital insurance models can gain an advantage over traditional models, reducing expenses and claims. The new business models offer both risks and rewards. As insurers, we need to focus on both innovation and disruption in order to make our products relevant,” said Englund. Chief Executive Officers had a chance to cede the floor to Chief Information Officers, who kept innovation firmly in the spotlight. cont. overleaf
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page 42-44 Takaful 102.indd 43
ISSUE 102 | Islamic Business & Finance
43
18/04/2017 10:46
TAKAFUL cont. from pg 43
“D i g i t a l s t a n d s f o r : ‘D i s r u p t i v e I n G l o b a l l y Inclusive Transformational (and Transitional) Analytical Leadership’. The uberisation of insurance can only happen when everything is offered as service. Consumers should pay for what they consume in insurance as well. Digitisation in insurance is a continuous journey, as for digital strategy one needs to have data to adopt or adapt new technologies whilst checking whether it’s fitting for your business. It is important to continuously engage with your customers to digitise the most compelling and complex processes. Insurance has to move from 4Ps (People, Process, Partner and Product) to 3Ps (People, People, People and Service),” Anshul Srivastav, CIO & Digital Officer, Union Insurance, said. CEO’s from the tech space also took the floor, focusing on their experience studying the customer’s perspective, and
44
the insights they’ve gathered therein. Ambareen Musa, Founder & CEO, Souqalmal.com, said, “Price is not the only criteria that people take into account. It might originally be a key factor that they look at, but once they start looking at other things, we realise that the process is much more detailed. At Souqalmal. com, the average premium that we normally sell at is AED 3000 for one policy which is much higher than the market average. We’ve come to understand that other factors like agency repair, personal accidents, branding, also play a key role in shaping customer decisions.” InsurTech Integrated witnessed a host of sessions tackling the most pertinent issues affecting insurance operators in the day and age of disruption due to massive digitisation. Other issues that were brought to the fore comprised of ways to accelerate the integration of insurtech in the Middle East,
Islamic Business & Finance | ISSUE 102
page 42-44 Takaful 102.indd 44
the massive potential blockchain harbours in transforming the industry and the application of advanced data technologies like RPA & Telematics, among others. Commenting on the event, host Middle East Global Advisors said, “Since its inception in 2006, The World Takaful Conference has been a significant contributor to enhancing growth, excellence and innovation in the global Takaful industry. Committed to pushing the envelope with each edition, WTC has taken stock of the most pressing issues affecting the industry at large, this time conceptualising a dedicated stream in the form of InsurTech Integrated to tackle the prevalent disruption in the insurance industry. Time and again, the conference has proven to be an ideal launching pad for research and intelligence reports that provide strategic insights to the most pressing issues targeting the industry at large.”
The power-packed CIO debate focused on digitisation strategies for business transformation.
www.islamicbusinessandfinance.com
18/04/2017 10:46
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THE INSIDE STORY
46
Islamic Business & Finance | ISSUE 102
page 46-49 Inside Story-Amanie 102.indd 46
www.islamicbusinessandfinance.com
17/04/2017 15:39
THE INSIDE STORY
The role of women in Shari’ah advisory MAYA MARISSA MALEK, MD, AMANIE ADVISORS LLC, GCC WRITES ABOUT HER JOURNEY IN SHARI’AH ADVISORY AND WHERE IT WILL GO IN THE FUTURE, FROM HER PERSPECTIVE
(abank oplet/SHUTTERSTOCK)
T
he future looks promising. Islamic finance assets will rise to more than $3 trillion by 2020, and with an increasing Muslim population predicted to nearly 2.8 billion in 2050, the appetite for Shari’ah-compliant products is expected to increase. Despite the positive outlook, the industry is still hampered by a scarcity of talent especially in Shari’ah advisory. Shari’ah advisory is the backbone of the industry. It is unique in the sense that it is imperative for Shari’ah advisors to be able to grasp the intricacies of all aspects of business i.e. risk, legal, commercial, operations, finance etc, in order to provide holistic, synergistic and workable Shari’ah solutions. Being a new vocation in renaissance Islamic finance as we see today, talents who can combine Shari’ah with other aspects of business and investments are truly lacking. Coupled with this, there is also the purported selective participation and lack of inclusion of women in Shari’ah advisory in many jurisdictions. This ‘double jeopardy’ will stifle the growth of the Islamic finance industry and curtail
Women in Islamic finance are headed towards more prominent roles, says Maya Marissa Malek of Amanie Advisors.
cont. overleaf
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page 46-49 Inside Story-Amanie 102.indd 47
ISSUE 102 | Islamic Business & Finance
47
17/04/2017 15:39
THE INSIDE STORY
cont. from pg 47
the preference of Shari’ah-compliant assets with a larger audience especially Muslim women and potential customers from the Western-backed financial institutions. It should also remain a challenge in creating a big enough pool of talent to propel the industry to the next stage. Women professionals in male-dominated industries from the Muslim ‘world’ are still struggling to break the glass ceiling. The opportunities presented to women in countries such as the UK, US, and Germany, are still not being afforded to women professionals in many Muslim-majority countries, including in the Islamic finance space. Women like Angela Merkel, Hillary Clinton, Theresa May, Sheryl Sandberg and Condoleeza Rice are a force to be reckoned with in their respective fields, but have not managed to open up more opportunities for their female counterparts across the globe and in traditionally patriarchal countries. Having said that, it is important to remember that in Islamic finance, the cause can be more inadvertent rather than deliberate. In addition to talent shortage, there is a lack of bold female role models wanting to venture into this space, and misconceptions on the role of women and various other challenges contributing to this cavity. Fortunately, all is not lost. Countries like Malaysia and Indonesia are supporting professional women in Islamic finance and offering top management positions to women in banks and on Shari’ah advisory boards. In doing so, financial institutions are tapping into a bigger talent pool of academically qualified women professionals, thus elevating the industry to greater heights. However, it is worth noting that despite a considerable number of women professionals occupying middle-management positions, the number seems to dwindle further up the corporate ladder making the coveted top positions available to a lucky few. Link this with Shari’ah advisory practise as a whole where there is no visible path to the top rungs, women advisors are again, facing a solid wall in their career paths, seemingly destined to be shoved aside in their journey to the top. I was blessed to start my career in Islamic finance in Malaysia working for Amanie Advisors Malaysia as the first woman consultant in 2007. Coming from a legal background and with more
48
Islamic Business & Finance | ISSUE 102
page 46-49 Inside Story-Amanie 102.indd 48
Maya Marissa Malek joined Amanie Advisors Malaysia in 2007 as one of the pioneers of the firm and the first female consultant. She is currently the Executive Director for Global Shariah Advisory and Compliance business for the global Amanie Group and the Managing Director of the Amanie Advisors’ global office in Dubai. A specialist in the areas of Islamic finance framework, Shariah governance, structuring, enhancement and conversion exercises, Maya has been instrumental in establishing Islamic financial entities as well as developing Islamic finance policies and standards. Maya has led Amanie in projects such as development of Islamic banking framework for the Central Bank of Afghanistan, development of first ever Shariah standards on gold together with the World Gold Council and AAOIFI and worked on the first ever corporate sukuk out of Oman, along with setting up of various Islamic windows in nonMuslim countries.
than 18 years of experience mainly in corporate legal and Islamic financial matters and having the privilege of working closely with globally renowned Shari’ah scholars, working in Amanie was a step-up and a good platform for me to contribute to the quest of strengthening the Islamic finance market. Admittedly, the start of my career in the industry was not easy. I felt I had to doubly prove that I had what it took to deliver. It was vital to be able to command the
As of today, a major of the long-term financing that the group has received in GCC region is comprised mostly of Shari’ah-compliant financing tools MAYA MARISSA MALEK, MD, Amanie Advisors LLC
respect and attention from colleagues especially from male colleagues in the industry, who rarely work with women and can at times doubt the capabilities of female counterparts. I was lucky, because my opportunity to work in the industry came with mentorship from Dr. Mohd Daud Bakar, an internationally renowned Shari’ah
www.islamicbusinessandfinance.com
20/04/2017 14:13
THE INSIDE STORY
scholar and role model. I am also comforted by the fact that I have encountered Shari’ah scholars and stakeholders who are supportive of what I do and how I do it. Amanie Advisors has its own unique way of doing business, combining Shari’ah entrepreneurship and the passion to develop and educate the industry further. My job has taken me to various parts of the world, including Islamic finance emerging markets in Afghanistan, Russia, Kazakhstan, Kenya etc. In my work as a Shari’ah consultant and as a woman, I believe it’s important to try and be one step ahead; reflect that in my work and be more cognisant of the demands from non-traditional markets. More often than not, we break new grounds in areas where Islamic finance has not had a presence, be it in new countries or in new products or even in new ways of doing things. I have also had to devise my own ways to penetrate newcomers into the industry, convince them about Islamic finance in their own language and step up to the level of standards that they ascribe to. Many times when I meet clients for the first time, they are taken aback by my petite frame and appearance. I am fortunate, that this initial reaction is later replaced by an acceptance to work with me. This boosts my confidence that things can change. I am pleased that a good work reputation can supersede a diminutive build. However, in a male-dominated industry like Islamic finance, I cannot run away from being stereotyped or being discriminated against, but I am hopeful that the industry will be more inclusive in order to better capitalise on women experts in the near future. This challenge propels me to work harder to remove the stereotypes, and try and pave the way for more women to fill in the talent cavity. For me, in order to be successful, I believe you also need attitude. Women should not have to bow down to mainstream perception and expectation, we need to be creative in managing and balancing various responsibilities, be ready to accept challenges and take everything in our stride in a positive manner—all this, without compromising on the unique attributes that we have as women, including our ‘quiet strength’. It is prudent to say women also need to be supported in their endeavours. My achievements thus far are first and foremost from the blessings
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page 46-49 Inside Story-Amanie 102.indd 49
of the Almighty. I was also raised by a strong mother and surrounded by four brilliant female siblings—all of which has contributed to my positive work ethics and my refusal to succumb to clichés. Uprooting my family and accepting the challenge to manage our global office in Dubai was a conscious effort taken to be at the centre of a promising Islamic financial hub. I must give credit to my supportive husband and children for their never-ending love and support.
More often than not, we break new grounds in areas where Islamic finance has not had a presence, be it in new countries or in new products or even in new ways of doing things. MAYA MARISSA MALEK, MD, Amanie Advisors LLC
Where do we go from here? I remain positive that women professionals will be given prominent roles in contributing towards the growth of Islamic finance and the wider Islamic economy. For my part, I would like to help empower more women to enter the Shari’ah advisory space, where women can flourish and make a real difference. I believe that this can be done through better awareness, recognising diversity and celebrating the strengths of women. It is imperative for the current leaders in the Shari’ah advisory space to train new talents—young women and men. Training should not just be about gaining a list of qualifications—we must look at how advisors can be strategic thinkers, solution-based, connect with an audience, both male and female; identify the sweet spots and convince a client that we are indeed an ethical, inclusive and diverse industry. For this to happen, effective mobilisation of talent is key—which includes both men and women.
NOTE: From the Women in Islamic Finance & Islamic Economy: Unlocking Talent report by Simply Sharia Human Capital.
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DATES FOR YOUR DIARY
25-26 May 2017
8-9 May 2017
(Ayman Alakhras/SHUTTERSTOCK)
(ESB Professional/SHUTTERSTOCK)
LONDON SUKUK SUMMIT
CIBAFI GLOBAL FORUM
This year’s Forum will discuss areas of Islamic finance industry that are aligned with the global development goals re-distributive channels such as Waqf, Qard Hasan, Zakat institutions, and deliberate on strategies that play an important role in social protection and transformation. The Forum will also explore strategies for effective and efficient mobilisation of capital for the benefit of the real economy, which in-turn help achieve sustainable development for the economy.
The London Sukuk Summit is a platform for industry experts and those interested in accessing the industry to meet and discuss the key issues, highlight and identify new opportunities and forge new business relationships in the Islamic investment space. VENUE: TBA London, UK https://www.sukuksummit.co.uk/
Venue: Amman, Jordan http://cibafi.org
11 May 2017
16-17 August 2017
(shutterlk/SHUTTERSTOCK)
THE BANKER MIDDLE EAST INDUSTRY AWARDS
The most prestigious Awards in the world of Middle East conventional banking and beyond return once again this year, held by Islamic Business & Finance’s publisher CPI Financial. Be sure to book your table early and keep an eye on when voting opens on our website in order to assure that your institution will be a part of the must-attend event of the year.
(ESB Professional/SHUTTERSTOCK)
11TH IFSB-INCEIF EXECUTIVE FORUM
Held under the title “Creativity and Innovation in Islamic Financial Products: Standardisation and Competitiveness”, this year’s Forum will highlight more than ever the essential issue of fintech and digital development and how it relates to the Islamic finance industry. VENUE: Sasana Kijang, Kuala Lumpur http://www.ifsb.org/event_detail.php?e_id=297
Venue: TBA Dubai, UAE www.cpifinancial.net
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