Barwa Bank: Building a strong brand in Islamic finance

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Barwa Bank CEO Steve Troop

Barwa Bank, a fast growing young financial institution in Qatar, is taking the sector by storm. After having managed a lot of funding deals recently, the bank is in full swing to become a major player, Inside Investor was told by Barwa’s CEO Steve Troop.

Q: Barwa Bank has lately been involved in GCC funding for a Turkish oil company (Tüpraş), one example for your increasing international activities. What have been the major cross-border deals so far?

A: Yes, we are building our profile in the Islamic capital markets. In the last six months, we were joint lead managers for Islamic Development Bank’s sukuk, joint lead managers for Emaar, co-manager of the Government of Dubai’s recent $1.25 billion sukuk, joint lead manager for the State of Qatar sukuk – which was spectacularly successful – and most recently we were co-manager of the Republic of Turkey’s debut sukuk, a very important transaction for the Islamic finance sector worldwide. As you see, we are looking to build our sukuk business and, indeed, to participate in opportunities outside Qatar, mainly in MENA. Ultimately, we go where the appetite for Islamic financing occurs.

Q: With the forthcoming big projects in Qatar, in infrastructure and for the FIFA World Cup 2022, where can Barwa Bank participate in project financing?

A: We aim to be very active participants in the infrastructural projects that form a core component of the National Vision 2030, given added impetus through the award of the FIFA World Cup 2022.  This involves partnering with some of the world’s largest civil engineering and contracting firms, some very large Qatari enterprises as well as medium sized local corporates and SME companies who are involved at sub-contractor level. The project cycle starts with support through tender bonds: where a tender is successful that leads on to additional bonding requirements around performance and advance payment guarantees. As projects progress, working capital and import finance requirements (for raw materials and equipment) become important. We are already financiers to some very substantial projects and are confident that we will add to our portfolio as the infrastructural development momentum builds.

Q: In which projects is Barwa Bank involved?

A: We are currently very busy with some of the Qatar Rail projects, which are very sizeable undertakings. Consortiums of major international contracting enterprises are partnering with local contractors and tendering for projects. Tenders are currently being submitted and we anticipate the award-of-contracts at some point in early 2013. We are also involved in a number of major road-building contracts and, at different levels, in some of the other flagship developments, including, for example, the new airport.

Q: As you said, Barwa Bank is still very young on the market. What are your mid-term plans for the bank?

A: We remain very young and continue to build both our business and our brand. Our strategy is to be selective and add value where we can and in markets that are under-developed or where we feel a differentiated approach can deliver a superior customer experience: key areas of focus include corporate banking and Islamic capital markets, upscale retail and private banking, investment banking and Islamic wealth management. At some point in the medium-term, we will expand overseas through our domestic franchise which is our current priority.

Q: In your last interview published in Inside Qatar 2012, you stated that you would like to see Barwa Bank be ‘seen as a contender to conventional banking in many parts of the world’. Which parts of the world are of most interest to Barwa Bank and why?

A: We are a provider of Shariah-complaint financial solutions, so, almost by definition, we are most interested in Muslim communities and Islamic societies that demonstrate the most appetite for the kind of banking that we offer.  We are a Qatari bank and, understandably, feel that we have greater insight of, and affinity with, the Arabic-speaking world. That tends to point ambition towards MENA and the Levant. That said, we do follow – or facilitate – our customers’ entry into markets traditionally dominated by conventional finance. Our North American and Brazilian Real Estate Funds are good examples for this.

Q: Barwa Bank has been involved in a major US property project deal lately. How is your US business developing?

A: The Washington DC project is progressing very positively indeed. It is on schedule with recent important milestones being a commitment from an anchor tenant – Covington & Burling, the global law firm – for 80 per cent of commercial office space and considerable interest shown in residential unit pre-completion marketing.

Q: Are there any notable new projects by Barwa Bank in Asia or Southeast Asia?

A. We are yet to initiate either a presence or a major investment in South East Asia. However, we do have active dialogue with institutions in that part of the world on opportunities of mutual interest. These cover sukuk placements and investment funds.

Q: You recently said that Barwa Bank is supporting the empowerment of women in business in Qatar. How does this reflect in Barwa Bank’s human resources strategy?

A: We are “gender-indifferent” when it comes to our human resources strategy: talent, drive, application, focus and identification with the values and aspirations of the bank are what matters in terms of both external hiring and internal promotion. I am pleased that two of our more high-profile senior management roles – leadership of our fast-growing Private Banking division and of our critical Marketing & Communications function – are held by very talented ladies. Personally, I’d like to see more women in senior roles and as long as we focus upon the person and not their gender, I am confident that will happen.

Q: What do the tighter capital rules of Basel III mean for Barwa Bank?

A: We are, of course, aware of the global regulatory climate and the desire that banks maintain higher levels of capital than have been the historical norm: this will have implications for all banks though given our current level of Capital Adequacy (24 per cent), compliance is not an issue and, for us, those implications are very much in the medium-term. Of course, the discipline that Basel III will impose is very welcome in a way that capital allocation and appropriate risk-pricing will become ever more important, an area upon which we already look to focus.

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Reading Time: 4 minutes

Barwa Bank CEO Steve Troop

Barwa Bank, a fast growing young financial institution in Qatar, is taking the sector by storm. After having managed a lot of funding deals recently, the bank is in full swing to become a major player, Inside Investor was told by Barwa’s CEO Steve Troop.

Reading Time: 4 minutes

Barwa Bank CEO Steve Troop

Barwa Bank, a fast growing young financial institution in Qatar, is taking the sector by storm. After having managed a lot of funding deals recently, the bank is in full swing to become a major player, Inside Investor was told by Barwa’s CEO Steve Troop.

Q: Barwa Bank has lately been involved in GCC funding for a Turkish oil company (Tüpraş), one example for your increasing international activities. What have been the major cross-border deals so far?

A: Yes, we are building our profile in the Islamic capital markets. In the last six months, we were joint lead managers for Islamic Development Bank’s sukuk, joint lead managers for Emaar, co-manager of the Government of Dubai’s recent $1.25 billion sukuk, joint lead manager for the State of Qatar sukuk – which was spectacularly successful – and most recently we were co-manager of the Republic of Turkey’s debut sukuk, a very important transaction for the Islamic finance sector worldwide. As you see, we are looking to build our sukuk business and, indeed, to participate in opportunities outside Qatar, mainly in MENA. Ultimately, we go where the appetite for Islamic financing occurs.

Q: With the forthcoming big projects in Qatar, in infrastructure and for the FIFA World Cup 2022, where can Barwa Bank participate in project financing?

A: We aim to be very active participants in the infrastructural projects that form a core component of the National Vision 2030, given added impetus through the award of the FIFA World Cup 2022.  This involves partnering with some of the world’s largest civil engineering and contracting firms, some very large Qatari enterprises as well as medium sized local corporates and SME companies who are involved at sub-contractor level. The project cycle starts with support through tender bonds: where a tender is successful that leads on to additional bonding requirements around performance and advance payment guarantees. As projects progress, working capital and import finance requirements (for raw materials and equipment) become important. We are already financiers to some very substantial projects and are confident that we will add to our portfolio as the infrastructural development momentum builds.

Q: In which projects is Barwa Bank involved?

A: We are currently very busy with some of the Qatar Rail projects, which are very sizeable undertakings. Consortiums of major international contracting enterprises are partnering with local contractors and tendering for projects. Tenders are currently being submitted and we anticipate the award-of-contracts at some point in early 2013. We are also involved in a number of major road-building contracts and, at different levels, in some of the other flagship developments, including, for example, the new airport.

Q: As you said, Barwa Bank is still very young on the market. What are your mid-term plans for the bank?

A: We remain very young and continue to build both our business and our brand. Our strategy is to be selective and add value where we can and in markets that are under-developed or where we feel a differentiated approach can deliver a superior customer experience: key areas of focus include corporate banking and Islamic capital markets, upscale retail and private banking, investment banking and Islamic wealth management. At some point in the medium-term, we will expand overseas through our domestic franchise which is our current priority.

Q: In your last interview published in Inside Qatar 2012, you stated that you would like to see Barwa Bank be ‘seen as a contender to conventional banking in many parts of the world’. Which parts of the world are of most interest to Barwa Bank and why?

A: We are a provider of Shariah-complaint financial solutions, so, almost by definition, we are most interested in Muslim communities and Islamic societies that demonstrate the most appetite for the kind of banking that we offer.  We are a Qatari bank and, understandably, feel that we have greater insight of, and affinity with, the Arabic-speaking world. That tends to point ambition towards MENA and the Levant. That said, we do follow – or facilitate – our customers’ entry into markets traditionally dominated by conventional finance. Our North American and Brazilian Real Estate Funds are good examples for this.

Q: Barwa Bank has been involved in a major US property project deal lately. How is your US business developing?

A: The Washington DC project is progressing very positively indeed. It is on schedule with recent important milestones being a commitment from an anchor tenant – Covington & Burling, the global law firm – for 80 per cent of commercial office space and considerable interest shown in residential unit pre-completion marketing.

Q: Are there any notable new projects by Barwa Bank in Asia or Southeast Asia?

A. We are yet to initiate either a presence or a major investment in South East Asia. However, we do have active dialogue with institutions in that part of the world on opportunities of mutual interest. These cover sukuk placements and investment funds.

Q: You recently said that Barwa Bank is supporting the empowerment of women in business in Qatar. How does this reflect in Barwa Bank’s human resources strategy?

A: We are “gender-indifferent” when it comes to our human resources strategy: talent, drive, application, focus and identification with the values and aspirations of the bank are what matters in terms of both external hiring and internal promotion. I am pleased that two of our more high-profile senior management roles – leadership of our fast-growing Private Banking division and of our critical Marketing & Communications function – are held by very talented ladies. Personally, I’d like to see more women in senior roles and as long as we focus upon the person and not their gender, I am confident that will happen.

Q: What do the tighter capital rules of Basel III mean for Barwa Bank?

A: We are, of course, aware of the global regulatory climate and the desire that banks maintain higher levels of capital than have been the historical norm: this will have implications for all banks though given our current level of Capital Adequacy (24 per cent), compliance is not an issue and, for us, those implications are very much in the medium-term. Of course, the discipline that Basel III will impose is very welcome in a way that capital allocation and appropriate risk-pricing will become ever more important, an area upon which we already look to focus.

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