Could you provide a brief journey of how you arrived where you are today?
During the 1990s when raising external finance was tight for Pakistani corporates, I approached a few Islamic investors in the Middle East and we were very successful in raising Shariah compliant financing for our customers. When ABN AMRO set up the Global Islamic Finance unit in Dubai, it was a match made in heaven.
What does your role involve?
My primary responsibility is originating, structuring and execution (including obtaining Shariah approval) of Islamic debt capital market and structured finance transactions. My other responsibilities include support for any Islamic finance transaction globally within the ABN AMRO network and new product development (e.g. Islamic structured products).
What is your greatest achievement to date?
Greatest achievements to date are: raising US$847 million non-recourse 12-year Islamic project finance for Yanbu National Petrochemical Company (the largest non-recourse Islamic project financing) in 2006; and raising US$85 million 6.5 year Islamic finance for Tuwairqi Steel Mills (this was the first syndicated medium-term Islamic finance transaction for a Pakistani corporate), also in 2006.
Which of your products/services deliver the best results?
Our deal track record within a short span of time is due to our product expertise and delivery capabilities. We are quite strong in the following areas: (a) Islamic structured finance, including Murabahah financing (short-term), Ijarah (lease) and Istisnah (procurement) financing, (b) Islamic Sukuk structuring and execution; and (c) structured Islamic investor products (wealth management products).
What are the strengths of your business?
The strength of the Islamic finance business comes from the fact that we can access the bank’s existing capabilities in structured products, debt capital markets and structured lending, etc… without reinventing the wheel. This adds depth to our total client offering and provides an alternative distribution avenue.
What are the factors contributing to the success of your company?
Our success comes from our team. We have dedicated and experienced people focusing on their own areas of expertise (structured products, retail, structured financing). However, they come together where required to deliver a complete solution to the customer.
What are the obstacles faced in running your business today?
The obstacles that we face are:
• There is no standard Shariah documentation acceptable to all the major players.
• The clients are looking to pay for a risk profile that is considerably lower than the risk profile of truly Islamic structure. This leads to a mismatch in the risk–reward equation and leads to the current criticism of Islamic finance being repackaged conventional finance.
• Islamic investors shy away from long-term high investment grade transactions (given their deposit profile). We have had a few transactions where all the financing – even in the Islamic tranche – was funded by conventional investors.
Where do you see the Islamic finance industry in, say, the next five years?
I see the development of the Islamic debt capital markets (project finance, structured finance, Sukuk, etc) growing exponentially in the GCC and Malaysia. This will be led mainly by customer demand for more Shariah compliant structures. Given the growth of the share of Islamic finance, there will be a shift towards structures which truly represent Islamic principles, rather than copying conventional products.
On the retail side, there will be many more Islamic institutions offering products which compete effectively with the other products available on the market. This will result in a growth of the Islamic deposit base with the conversion of customers who are currently sceptical about using Islamic structures and institutions either due to service quality or limited product offering.
Name one thing you would like to see change in the world of Islamic finance?
I would like to see better trained people involved in Islamic finance, as most of the people have come into this field with a conventional banking background (I include myself in this category).
I would also like to see a global Shariah supervisory body responsible for developing standard documentation, providing training to scholars and bankers and undertaking innovative research to come up with new products. This will help to develop Islamic finance by letting bankers focus on the transactions, rather than focusing on coming up with structures that would meet the majority of investors’ Shariah requirements.
ABN AMRO Bank has been present in the UAE since 1973, with branches in the major Emirates of Dubai, Abu Dhabi and Sharjah. ABN AMRO’s focus in the UAE is to provide high quality personalized service to clients, offering innovative solutions and building long term relationships in the Emirates and the neighboring Gulf countries.
With its experience in the UAE, ABN AMRO, is in a unique position to offer high quality wealth management services to its customers.