Nov. 29, 2016

Ahmed Saad Ibrahim

UAE, Sharjah

Ahmed Saad Ibrahim

Deputy CEO , Sharjah Islamic Bank (SIB)

TBY talks to Ahmed Saad Ibrahim, Deputy CEO of Sharjah Islamic Bank (SIB), on trends in Islamic banking, the bank's role in the economy, and dealing with impacts from the global economy.


Ahmed Saad Ibrahim has served as Deputy CEO since early 2011, having been at SIB since 1998. He holds a bachelor’s degree in commerce from Cairo University. He is also a Certified Public Accountant. Prior to joining SIB, he worked with Qatar National Bank and Commercial International Bank, Egypt (formerly Chase National Bank). He has over 31 years of experience in the banking industry.

How would you rate SIB's overall results in 2015?

The overall results of SIB in 2015 are strong and a continuation of our progressive growth year after year with good profitability and strong structural indicators despite the global economic slowdown and depressed oil prices. Compared to our competitors, we are the fastest-growing bank in Sharjah in terms of our balance sheet, retail products, and branches. We are ranked 10th in the UAE in terms of the size of our branch network. Looking at the financial ratios for the bank, they are very strong compared to most banks in the UAE; for example, we have one of the highest capital adequacy ratios in the market. Regarding the quality of our portfolio, our non-performing assets and receivables coverage ratio is above 80%, which is a comfortable level, strengthening the bank's financial position and investors', stockholders', and rating agencies' confidence.

Do you identify a trend in some conventional banks offering Islamic products attracting new clients? Are some Islamic banks also offering services for non-Muslims?

There is a high demand for Islamic products, and Islamic banks are growing rapidly all around the world. There is a misconception that Islamic banking is only for Muslims, but that is not the case. It is a service like any other financial offering and is designed for all customers. Sukuks are being increasingly offered by conventional banks. In fact, many banks and governments are issuing more sukuks than conventional bonds. They are easier to sell, demand is high, and they are attractive to investors. Conventional bonds only target conventional investors, losing on those investors who want sharia-compliant products. Sukuk satisfies everybody. Some funds are also structured solely for sharia-compliant bonds and products. It is an asset-based bond; you cannot buy or sell something that you do not own. It does away with speculation, and so adds stability to the market and global economy. The cost of bonds for banks is higher than sukuks, even though it is the same risk and the same issuer, and that is because of demand. Demand is growing daily, and there is still plenty of room to grow in both conventional and Islamic banking.

Despite the current international economic situation, Sharjah is developing steadily. What role is the bank playing in the overall development of the economy?

We contribute effectively to all major projects in Sharjah, and especially infrastructure projects. We were also one of the managers and book runners of the government of Sharjah's first sukuk issuance in 2015. We are one of the highest contributors in the areas of social responsibility, the knowledge economy, and the development of UAE nationals. Social responsibility is one of our core values, and SIB contributes by taking part in different community activities and by supporting most organizations and causes in Sharjah, such as orphanages, special needs centers, cancer patients, health, education, and so on. SIB also contributes greatly to research activities in universities. We have special customized cards for students who can easily use them for access and funding. By law, as an Islamic institution, we have to reserve 2.57% of profits annually as a zakat fund to be spent on the community and this ethical component is fundamental to Islamic finance.

In your opinion, what is the current state of the Islamic finance industry?

In the UAE, the Islamic banking sector accounts for more than 17% of total banking assets and more than 19% of customer deposits, and the industry continues to grow despite the slowdown in the global economy and the sharp drop in oil prices. The UAE differs from other countries that depend on oil as the main component of GDP in terms of diversification of the economy. We are far less dependent on oil and gas than some other economies. That being said, oil is still the biggest sector and we are not spared from the global impact of oil prices, but through diversification we have added robustness to the UAE economy in general.