Could you provide a brief journey of how you arrived where you are today?
After university where I studied business administration, economics and political science, I started my career as a credit analyst in two major French banks. I then joined Standard & Poor’s in 2001 where I was made responsible for the rating coverage of financial institutions across the Middle East. Standard & Poor’s subsequently launched an Islamic finance desk, which I chaired from 2004 to 2007. I decided to join Moody’s in 2008, another rating agency, where I currently run its Islamic finance desk.
What does your role involve?
The primary responsibility of Moody’s analysts is to monitor their own portfolios of rated entities. Mine comprises all rated Islamic financial institutions across the board, as well as North African banks. I am also deeply involved in Moody’s endeavor to enhance market awareness and knowledge about Islamic financial issues: this includes production of topical research articles in this field, as well as wide outreach effort in a number of conferences, TV and radio shows, training sessions, and several specialized external technical committees dealing with Shariah compliant finance. Finally, I am also a Basel II expert.
What is your greatest achievement to date?
One achievement is to have contributed to establishing the rating culture in the MENA region and the Islamic financial industry, which both used to be quite unfamiliar with financial transparency, disclosure, and ultimately credit ratings. Helping strengthening Moody’s franchise and reputation both in the region and across Islamic capital markets is an exciting challenge. In the Middle East, Moody’s assigns ratings to more than a hundred entities, including sovereigns, banks, insurance and Takaful companies, as well as industrial corporations and of course Sukuk. The next challenge is to expand our coverage of rated firms, conventional bonds and Islamic securities, along with the disintermediation process that has started across the Middle East.
Which of your products/services deliver the best results?
Credit ratings of course! Especially, banks and sovereigns have resorted to our credit rating services quite extensively. We still need to further widen our rating coverage of insurance companies and industrial firms, which remains less broad than that on banks.
What are the strengths of your business?
We deliver, through ratings, fair, independent and reliable credit opinions on a wide range of issuers and issues. We therefore enhance informational intermediation within the investment community, where we are well respected.
What are the factors contributing to the success of your company?
People and reputation, and both aspects are interlinked. Human talent is the key, because our analysts are ultimately the best guardians of our credibility and brand. It is not just about their technical expertise, know-how, and professionalism; it is also about their sense of independence, honesty; fairness, curiosity, and respect.
What are the obstacles faced in running your business today?
Complexity is a challenge. Our analysts being generalist professionals, the span of their expertise must widen quickly to embrace a scope of knowledge that would allow them to become multi-specialists. From a business perspective, the vast majority of Shariah-compliant issuers still operate in emerging countries, where ratings do have the same recognition as in more mature environments. Our duty is to convince Middle East issuers, including Islamic ones, that ratings are an entry point into global markets, and a very powerful tool for cross-border fundraising and international recognition.
Where do you see the Islamic finance industry, maybe in the next five years?
As far as Islamic financial institutions (IFIs) are concerned, we expect more: (1) geographic diversification: IFIs should continue to pursue their internationalization process, thanks to their robust domestic platform; (2) operating diversification: IFIs have become more aware of the necessity to widen their asset portfolios, especially in mortgages, Shariah-compliant securitization, and Islamic investment banking; (3) new entrants and competition: the profitable Islamic banking market still attracts newcomers; and (4) de-correlation with oil prices: the almost mechanical link between Islamic banking and oil prices, via the recycling of petrodollars in IFIs’ home countries, should gradually decline.
Name one thing you would like to see change in the world of Islamic finance?
One single religious framework for the whole industry globally, for clients and suppliers of Shariah-compliant financial solutions to easily identify what is halal and what is not, anywhere in the Muslim world.
Moody’s Investors Service is one of the world’s widely utilized sources for credit ratings, research and risk analysis. It’s commitment and expertise contribute to stable, transparent and integrated financial markets, thus protecting the integrity of credit. In addition to providing research data and analytic tools for assessing credit risk, it also publishes market-leading credit opinions, deal research and commentary, serving more than 9,300 customer accounts at some 2,400 institutions globally.