THE RIGHT PARTNER

Sharjah 2015 | FINANCE | INTERVIEW

TBY talks to Ahmed Saad Ibrahim, Deputy CEO of Sharjah Islamic Bank (SIB), on growing demand for sharia-compliant financial products and services, new bond issues, and the global trajectory of Islamic banking.

Ahmed Saad Ibrahim
BIOGRAPHY
Ahmed Saad Ibrahim has served as Deputy CEO since early 2011 and has 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 has worked with Qatar National Bank and Commercial International Bank, Egypt (formerly Chase National Bank). He has over 31 years’ experience in the banking industry.

How does SIB play into the growing demand for sharia-compliant products?

In 2002, SIB was the first bank in the world to transform from conventional banking to Islamic banking. There is growing demand for Islamic banking in the Middle East and Europe, because of the ethics and transparency that Islamic banking brings with it. These values, which are embedded in our products and services, are what make Islamic banking so attractive. Our vast experience as a conventional bank has enabled us to capitalize on this growing demand for sharia-compliant products, because we know the needs of customers and we focus on turn-around time and the quality of our products and services. We created many products to cater to the different financial needs of our clients. Many of these products were not hitherto present in Islamic banking, so we introduced them to the market, and now other banks use them as well.

SIB issued an unsecured AED1.8 billion ($500 million)five-year sukuk in March. How would you describe the significance and impact of this sukuk on the bank?

We were the first institution to issue a sukuk in Sharjah, in 2006. We issued our fourth sukuk in March, which was a successful transaction, receiving an A-rating from Moody's. With a book size of $3.6 billion, the sukuk was more than seven times oversubscribed and our trading was exceptional compared to the previous tradings of other issuers. It was also very well diversified between investors from the Middle East, Europe, and Asia. The spread and the pricing were attractive, as we managed to put the price on 110 basis points over five-year midswaps. All in all, we consider it as a successful issuance. The reason for that success primarily lies in our closeness to the international market, and the awareness we have raised there for the bank. Another factor for success has been the growth of our overall financial ratios.

Which untapped sectors have you identified within global Islamic banking and how should these be utilized?

Most of customers' financial requirements are already covered by Islamic banks, which are able to cover all the long- and short-term finances for international customers. Certain financial products, like derivatives and swaps, are not tapped because there are sharia issues with it. Another product that we do not provide are personal loans for cash, but we do provide other solutions for the customer in order to raise cash based on their own assets. There is always room to grow for Islamic banking products, and there is uncovered ground because it is much easier to structure a product under conventional rules. Islamic banks have certainly developed and matured since 1975, as they have taken great steps towards catering to all the financial needs and banking needs of their clients. As for the future of Islamic banking, what we've seen is that conventional banks are starting to offer certain Islamic products and services because of the demand in Europe, Asia, and the Middle East. By issuing Islamic bonds, they will be able to capture both Muslims and non-Muslims, as opposed to a non-Islamic bond to which Muslims may not subscribe to. On the other hand, Islamic banks for their part are moving away from creating products that are only for Muslims.

How would you rate the importance of SIB for the economic development of Sharjah?

SIB plays an important role in Sharjah's development, and has done so for years. We have participated in most of the major projects in different sectors of Sharjah's economy, either by financing the project or financing clients. SIB is one of the leading banks in Sharjah in terms of corporate and social responsibility, to which end we have a lot of projects. As an Islamic bank we are obliged to put aside zakat, which is a form of charity, to invest in the community.