Could you provide a brief journey of how you arrived where you are today?
After 30 years in investment banking – 20 of which were working for Bank of America, the world’s largest financial institution – the opportunity to be involved in setting up and running a new, independent Shariah compliant investment bank in London in such an important and growing segment of the global financial market very rarely comes along in one’s working life, and was just too good to be missed.
What does your role involve?
My role has changed considerably as the business has gone through various stages of its development. As managing director, I am ultimately responsible for the running of the company, reporting to the board. A key part of my role is managing the implementation of European Islamic Investment Bank (EIIB)’s business plan, to help the company achieve its long-term, strategic objective of becoming a leading independent Islamic investment bank, but perhaps most importantly I see myself as the senior relationship manager and salesperson for the company.
With the company now moving from start-up phase to a real business, I spend a considerable amount of time meeting with shareholders and clients and interviewing prospective job candidates. Understanding our clients’ needs is vital for the business. We are also actively recruiting and my view is that you can never spend enough time making sure that you hire the right people.
What is your greatest achievement to date?
I am very proud to be part of a growing business that has achieved so much in a short space of time. EIIB was incorporated in January 2005; received its authorization by the UK’s Financial Services Authority (FSA) in March 2006, as the first Islamic investment bank it regulates; and floated on London’s Alternative Investment Market (AIM) market shortly after. I am happy to say we are proceeding exactly according to the timetable set for our business roll-out.
Which of your products/services deliver the best results?
We are not overly dependent on one product or service. All business areas contribute to the overall strength of the company. We have started with treasury and capital markets, and we are now expanding, in line with our plan, in asset management and corporate finance.
What are the strengths of your business?
I see several areas of strength in our business. First EIIB is a fully compliant Shariah institution, whereas the majority of our peers are operating through an Islamic window. Through our experienced management team, we have people with a mix of conventional and Islamic banking experience and, thus, the capability to leverage relationships in the Middle East, Asia and Europe. As we are based in London, one of the world’s leading financial centers, EIIB has access to a large pool of talent to develop a sophisticated range of Islamic products. Product innovation is the key to success in our market and I believe that over the next couple of years EIIB will be offering a broader, more sophisticated range of Shariah compliant products than any of our competitors. Finally, EIIB is the first independent Shariah compliant investment bank to be authorized and regulated by the FSA, and this strong regulatory framework is a significant attraction for potential customers.
What are the factors contributing to the success of your company?
EIIB bridges the gap between the Middle East and Asian markets and western markets. We are servicing the active market for Islamic securities in the Middle East and Asia, as well as targeting the growing market for Shariah compliant products in Europe. The Islamic finance market is experiencing rapid growth and EIIB is well-positioned to capitalize on this.
What are the obstacles faced in running your business today?
Hiring the right staff is always a challenge as our standards are very high. The right – or wrong – team can have an enormous impact on the performance of a business.
Where do you see the Islamic finance industry, maybe in the next five years?
The Islamic finance sector is experiencing rapid growth. In the near future, I believe Islamic finance will continue to grow rapidly across a range of sectors and become increasingly mainstream, not least as ethical investing and increasingly liquid markets make it attractive for non-Muslim participants as well.
Name one thing you would like to see change in the world of Islamic finance?
That’s impossible to do, but there are a number of things that we as practitioners need to address. First, and perhaps most importantly, Islamic finance must remain true to the Islamic principles of Shariah. Failure to do so will result in Islamic finance devaluing itself. Islamic banking is a different way of banking and we must continue to respect and protect those differences and values. Secondly, in order for the Islamic markets to resolve pricing differentials, they need to adopt the same levels of transparency in respect of disclosure and financial covenants as in conventional markets. Thirdly, instruments/investments need to be price and yield competitive for both borrowers and investors if is to be a truly viable alternative. Fourthly, there needs to be greater liquidity. Borrowers like to access new sources of funding and investors, but they also want to establish new benchmarks, and in a world of cheap credit, they will only pay up so much to establish a benchmark in a new market segment. This also involves addressing the issues of transferability.
Fifthly there is a lot of talk about “consistency” of interpretation of Shariah law. Every legal system on occasion has interpretations. Why should Shariah law be any different? Consistency and standardization potentially stifle innovation, so we need to be clear what we mean. Finally, one of the biggest challenges we face as an industry is people. There is just not enough talent at the moment. One of the reasons why EIIB was set up in London, as opposed to being just another Islamic investment bank in the Middle East, was so we could attract talent from conventional institutions into the Islamic financial markets, bringing with them the new skill sets needed to help develop new products and asset classes.
European Islamic Investment Bank (EIIB)’s mission is to achieve excellence in the provision of Shariah compliant investment banking products and services. EIIB offers its customers Shariah compliant treasury and capital markets, asset management (including private banking), trade finance and correspondent banking and advisory and corporate finance services.