BRANCHING OUT

Kazakhstan 2018 | FINANCE | INTERVIEW

TBY talks to Gordon Haskins, CEO of Al Hilal Bank Kazakhstan, on Islamic finance awareness in Kazakhstan, expanding products and services, and moving into new segments.

 Gordon Haskin
BIOGRAPHY
Gordon Haskins is CEO and Chairman of the Management Board of Al Hilal Bank Kazakhstan, having joined in November 2016. He has more than 25 years of experience in banking and law. Previously, Haskins was Country Executive, Chairman of the Management Board, and member of the Board of Directors of RBS Kazakhstan for three years. He worked with RBS Group for over 13 years total, having also been Managing Director in Regulatory Developments. He started his career as a lawyer, working in both the UK and Canada. He holds a bachelor's degree in history and politics from the University of British Columbia (1987) and a law degree from the University of Toronto (1991).

Why did Al Hilal Bank select Kazakhstan as the hub to branch out into?

Al Hilal Bank's decision was very much a product of the growing ties between the UAE and Kazakhstan. There was an interest on the part of the Kazakhstani president and government to foster Islamic finance in the country, and in 2009, an intergovernmental agreement was signed regarding establishing an Islamic bank in Kazakhstan. As a result, Kazakhstan became Al Hilal's first foreign market outside of the UAE. We were established, licensed, and registered here fairly quickly after that, and started our operations in early 2010. Cooperation and support on the legal and regulatory framework from the Kazakhstani government has continued ever since. Most recently, the Astana International Finance Centre emphasized its focus on Islamic finance as one of its key pillars. For the last five years, we have been profitable with our corporate business here. We have an established client base, and we have continued to build the business, though on a careful basis and risk-conservative approach

In 2017, Al Hilal took the step to establish its retail business in Kazakhstan. Why now?

Retail banking has been part of the strategy for the bank for a while. We ran a pilot program in 2016 to attract retail deposits from individual customers. We had conservative targets and far exceeded those within weeks. People see that we are 100% government-owned in Abu Dhabi, which speaks to our credit-worthiness. We decided to launch our flagship retail branch in Almaty and the timing was fortuitous. With other developments in the local banking market, we have been able to present Al Hilal Bank as a strong partner for people seeking a safe and secure place to deposit their money.

How would you describe Al Hilal Bank's typical client base, particularly in the retail segments?

We are focused on quality rather than seeking to grab a large market share of the retail segment; we will acquire new retail customers by applying a careful and considered approach and paying due attention to their credit-worthiness. We started with accounts and deposit products, partly to build the funding base we need to provide retail financing products. We aim to launch these products publicly in 2Q2018.

How educated is the market today in Kazakhstan about Islamic financing products?

Awareness and education about Islamic finance and some of the differences between it and conventional banking products are issues we have to deal with here in Kazakhstan. For example, there are some differences in the way Islamic banking products are treated from an accounting and tax perspective. We are mindful that there is a lack of awareness in the local market, and education is a big part of improving this. Nonetheless, this vision is also being supported and fostered from the very top. President Nazarbayev announced in September 2017 at the Global Islamic Finance Awards that Kazakhstan would issue a USD300-million sukuk in 2018. We see this as a potential investment opportunity both here and in the UAE.

What are your key objectives and expectations for 2018?

We are not seeking to roll out a large number of physical branches across the country. But we will look to expand our offering beyond the three cities where we have branches now—Shymkent, Almaty, and Astana—and potentially open another branch in one of the other regions at some point. Our expansion will be very much focused on digital and online offerings. We have an internet banking platform that we will roll out shortly. We have been doing this in steps on the retail side. We will seek to roll out a digital mobile app in the near future to offer remote banking services. In 2018, as we launch our financing products, we will start to build revenues from the retail business and will see more significant growth beyond 2018.