Qatar Islamic Bank: Looking beyond borders

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Ahmad Meshari Muhaidi, Acting CEO of Qatar Islamic Bank

Qatar Islamic Bank (QIB) is the leading Shari’a-compliant financial institution in Qatar. Inside Investor sat down with Ahmed Meshari Muhaidi, acting CEO of Qatar Islamic Bank, to learn more about the bank’s strategy and its role within the vibrant financial services sector in Qatar.

Q: Where would you put the size of QIB among Qatar’s other Islamic banks and compared to the country’s conventional banks in terms of customers, assets etc?

A: QIB, founded in 1983, is the first and largest Islamic bank in Qatar. We enjoy a market share of more than 36 per cent in the Shari’a-compliant segment, which makes us the market leader. The bank’s net assets as of September 30, 2012, stood at 66.8 billion riyal, making QIB the third largest bank in terms of assets within the entire industry after Qatar National Bank and Commercial Bank of Qatar.

Q: What is the share between retail and corporate banking at QIB?

A: We have a full range of products both for retail and corporate as these are our core activities, with a larger share in corporate. You see, the population of Qatar is small, about 1.8 million, which is limiting the potential of retail banking, especially when we consider the bankable population only. The main driver for the banking business is the corporate sector. By percentage, our corporate banking business makes 49 per cent, retail makes 20 per cent, and other activities such as treasury and the international banking business make the rest.

Q: Has the banking landscape in Qatar changed over the last years?

A: Of course, there is a lot of change happening. And if we would not react to changes, we would not catch up with the market. Islamic banking in general started around 35 years ago, however it has experienced rapid growth compared to conventional banking. The industry is progressing at a very fast pace, so we have been developing our products to suite all the needs of our customers. We strive to meet our different customers’ needs according to Shari’a principles. For  corporate customers, we have customised solutions for different sectors. We follow a segmented approach based on the different sectors and also based on the size of the company. Our corporate customers enjoy ‘360 degree’ solutions, to name a few: Cash management solutions, financing based on assets, working capital etc., trade finance, treasury services and so on.

Q: Would you also say your bank is a leader in innovation when it comes to project finance?

A: Definitely. There was a perception that Islamic banking cannot come up with the right solutions for certain projects. Example is the long-term financing for production facilities or large power supply projects with a term of 20–plus years. It was believed that Islamic banking can just do project financing or real estate financing of up to 8, 9 years maximum. However, we managed to structure and develop a Shari’a-compliant long-term project finance for up to 20 years in the power sector. We managed to fulfill the requirements on a high standard without impacting our price and capital structure. It was also our role to change the perception of Islamic banking, doing awareness campaigns, going out to the public with new products and change the general view of Shari’a finance. We have a long list of customers and a number of shareholders that we have to keep happy, and that’s what we keep doing.

Q: There are a lot of projects in the pipeline in Qatar starting from next year at an estimated financing value of $25 billion so far. How is your bank involved?

A: We are ready for them, as we are a national bank and look at this as a way to position ourself as an integral part of the achievement of the national vision. We will be part of financing these projects when they come out. We are very optimistic about that and about Qatar’s national vision.

Q: Why would a company or a government entity chose QIB as a financing partner?

A: We have the history, we have the brand name – with Qatar in it -, we are an Islamic bank, and we have the products, the know-how and the capital base which gives us the comfort to finance mega-projects.

Q: Are there any expansion plans within the region and what would be your expansion strategy?

A: We know that international expansion can bring many benefits to the bank as well as benefits to our customers by having a wider international network. International expansion plays a vital role in promoting the bank across the world and we are open for expansion whenever we find real opportunities.

Q: In terms of contract financing, where do your partners come from?

A: We have a wide range of customers in the contracting sector from different parts of the world. These are from Europe, Asia and the GCC. And this is of course apart from our local clients.

Q: Where would you like to see QIB in five years’ time?

A: I would like to see QIB as the benchmark Islamic bank in the world.

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Reading Time: 3 minutes

Ahmad Meshari Muhaidi, Acting CEO of Qatar Islamic Bank

Qatar Islamic Bank (QIB) is the leading Shari’a-compliant financial institution in Qatar. Inside Investor sat down with Ahmed Meshari Muhaidi, acting CEO of Qatar Islamic Bank, to learn more about the bank’s strategy and its role within the vibrant financial services sector in Qatar.

Reading Time: 3 minutes

Ahmad Meshari Muhaidi, Acting CEO of Qatar Islamic Bank

Qatar Islamic Bank (QIB) is the leading Shari’a-compliant financial institution in Qatar. Inside Investor sat down with Ahmed Meshari Muhaidi, acting CEO of Qatar Islamic Bank, to learn more about the bank’s strategy and its role within the vibrant financial services sector in Qatar.

Q: Where would you put the size of QIB among Qatar’s other Islamic banks and compared to the country’s conventional banks in terms of customers, assets etc?

A: QIB, founded in 1983, is the first and largest Islamic bank in Qatar. We enjoy a market share of more than 36 per cent in the Shari’a-compliant segment, which makes us the market leader. The bank’s net assets as of September 30, 2012, stood at 66.8 billion riyal, making QIB the third largest bank in terms of assets within the entire industry after Qatar National Bank and Commercial Bank of Qatar.

Q: What is the share between retail and corporate banking at QIB?

A: We have a full range of products both for retail and corporate as these are our core activities, with a larger share in corporate. You see, the population of Qatar is small, about 1.8 million, which is limiting the potential of retail banking, especially when we consider the bankable population only. The main driver for the banking business is the corporate sector. By percentage, our corporate banking business makes 49 per cent, retail makes 20 per cent, and other activities such as treasury and the international banking business make the rest.

Q: Has the banking landscape in Qatar changed over the last years?

A: Of course, there is a lot of change happening. And if we would not react to changes, we would not catch up with the market. Islamic banking in general started around 35 years ago, however it has experienced rapid growth compared to conventional banking. The industry is progressing at a very fast pace, so we have been developing our products to suite all the needs of our customers. We strive to meet our different customers’ needs according to Shari’a principles. For  corporate customers, we have customised solutions for different sectors. We follow a segmented approach based on the different sectors and also based on the size of the company. Our corporate customers enjoy ‘360 degree’ solutions, to name a few: Cash management solutions, financing based on assets, working capital etc., trade finance, treasury services and so on.

Q: Would you also say your bank is a leader in innovation when it comes to project finance?

A: Definitely. There was a perception that Islamic banking cannot come up with the right solutions for certain projects. Example is the long-term financing for production facilities or large power supply projects with a term of 20–plus years. It was believed that Islamic banking can just do project financing or real estate financing of up to 8, 9 years maximum. However, we managed to structure and develop a Shari’a-compliant long-term project finance for up to 20 years in the power sector. We managed to fulfill the requirements on a high standard without impacting our price and capital structure. It was also our role to change the perception of Islamic banking, doing awareness campaigns, going out to the public with new products and change the general view of Shari’a finance. We have a long list of customers and a number of shareholders that we have to keep happy, and that’s what we keep doing.

Q: There are a lot of projects in the pipeline in Qatar starting from next year at an estimated financing value of $25 billion so far. How is your bank involved?

A: We are ready for them, as we are a national bank and look at this as a way to position ourself as an integral part of the achievement of the national vision. We will be part of financing these projects when they come out. We are very optimistic about that and about Qatar’s national vision.

Q: Why would a company or a government entity chose QIB as a financing partner?

A: We have the history, we have the brand name – with Qatar in it -, we are an Islamic bank, and we have the products, the know-how and the capital base which gives us the comfort to finance mega-projects.

Q: Are there any expansion plans within the region and what would be your expansion strategy?

A: We know that international expansion can bring many benefits to the bank as well as benefits to our customers by having a wider international network. International expansion plays a vital role in promoting the bank across the world and we are open for expansion whenever we find real opportunities.

Q: In terms of contract financing, where do your partners come from?

A: We have a wide range of customers in the contracting sector from different parts of the world. These are from Europe, Asia and the GCC. And this is of course apart from our local clients.

Q: Where would you like to see QIB in five years’ time?

A: I would like to see QIB as the benchmark Islamic bank in the world.

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