INTERVIEW WITH COUNTRY HEAD AL-BARAKA ISLAMIC BANK PAKISTAN

THE BANK HAS NURTURED ITS IDENTITY AS LEADING SHARIAH-COMPLIANT SERVICE PROVIDER

KANWAL SALEEM
(feedback@pgeconomist.com)
Mar 22 - 28, 2010

Al-Baraka Islamic Bank (AIB) is the pioneer of Islamic banking in Pakistan and has been operating in the country as a subsidiary of Al Baraka Islamic Bank Bahrain since 1991.

Currently Al-Baraka Islamic Bank has 29 branches in 17 major cities of the Pakistan. The bank has a deposit base of over Rs 90 billion. Al-Baraka Islamic Bank is a member of Al-Baraka Banking Group, which is a Bahrain Joint Stock Company listed on Bahrain and Dubai stock exchanges. It is a leading international Islamic bank with Standard and Poor's long and short term credit ratings of BBB- and A-3 respectively. Al-Baraka Banking Group offers retail, corporate, and investment banking and treasury services strictly in accordance with the principles of the Shariah. The authorized capital of ABG is US $1.5 billion, while the total equity amounts to about US$1.52 billion.

The Group has a wide geographical presence in the form of banking units and representative offices in 12 countries. The Al-Baraka Islamic Bank and the Emirates Global Islamic Bank Limited have decided to merge their operations to form a mid-sized bank with a network of around 90 branches.

Emirates Global Islamic Bank Limited (EIGBL) started it operations in Pakistan as an Islamic bank in February 2007 with sponsors from the United Arab Emirates and Saudi Arabia. EIGBL has a network of 60 online branches in 36 cities and towns of Pakistan.

Al-Baraka Islamic Bank's Pakistan Operations are headed by Shafqaat Ahmed who has more than 40 years experience of banking in Pakistan and abroad.

Shafqaat Ahmed is a graduate of Foreman Christian College, Lahore with majors in Economics. He is also a fellow of Institute of Bankers in Pakistan. His experience varies from Corporate Finance, Capital Markets to Portfolio Management.

Since 1992, Shafqaat Ahmed is associated with Islamic banking and has attended/addressed various courses seminars and conferences organized by various international organizations.

In an exclusive interview with Page, Shafqaat Ahmed shared achievements of Al-Baraka Islamic Bank in Pakistan under his leadership.

PAGE: AL-BARAKA ISLAMIC BANK HAS BEEN IN THE INDUSTRY SINCE 1992. WHAT HAVE BEEN THE MAJOR ACHIEVEMENTS OF THE BANK SO FAR?.

SHAFQAAT AHMED: The bank started its operations as a conventional bank in 1991 and turned into Islamic bank during 2003 when the State Bank started issuing licenses to Islamic banks. It is the pioneer of Islamic banking in Pakistan. It started with a small capital of US$2 million and over a span of short period, the bank's capital has grown over US$35. We take pride in the fact that AI- Baraka Islamic Bank has always committed itself to Shariah compliance and has incessantly worked for promoting and contributing Islamic banking in Pakistan. By the Grace of Allah, the bank has successfully developed and nurtured its identity as one of the leading providers of a wide range of Shairiah compliant banking products and services in Pakistan.

PAGE: EVERYONE IS TALKING ABOUT ISLAMIC BANKING AND FINANCE TO DOMINATE THE SECTOR'S FUTURE. WHAT IS YOUR VIEW ON THIS?

SHAFQAAT AHMED: Islamic banks remained unaffected in the global financial crisis. There are two important reasons for this as compared to interest based banks and financial institutions. First is liquidity problem due to inter-bank lending. The second problem is related to asset values mortgaged against debt finances.

PAGE: UNDER THE UMBRELLA OF ABG, AL BARAKA ISLAMIC BANK IS WORKING IN 12 COUNTRIES. WHAT ARE THE EXPANSION PLANS OF ABG IN THIS REGION?

SHAFQAAT AHMED: Al-Baraka is independently working in 12 countries with total assets worth around US$12 billion and still striving to further extend its outreach in the region. We want to strengthen and perfect our position worldwide. In coming years we see ourselves successfully working in countries like Malaysia, Philippines and France etc. After Syria we are planning IPO's in other countries. IPS in Syria was very successful, as it was oversubscribed by more than four times.

PAGE: WHAT DOES MAKE AL-BARAKA STAND OUT DISTINCT AMONG OTHER ISLAMIC BANKS IN THE COUNTRY?

SHAFQAAT AHMED: Al-Baraka is a little different from other Islamic banks in Pakistan since it enjoys a blended flavour of various countries. Being a part of ABG, we have a flavor of all 12 countries where the bank is operating, which can be utilized in several different countries.

PAGE: ONE OF YOUR BANK'S OBJECTIVES IS TO PROVIDE STATE OF THE ART BANKING SERVICES TO CUSTOMERS. CAN YOU EXPLAIN THIS?

SHAFQAAT AHMED: Providing state of the art banking services to customers means constant innovation and improvement on our part. Al-Baraka has played a major role in introducing latest products in Islamic banking. Lately, the bank is under process of implementing a new system called MICS Equation that will enable us to provide advanced technologies to our customers.

PAGE: WHY DID THE GROUP OPT FOR RE-BRANDING?

SHAFQAAT AHMED: Initially, when ABG was founded in 2002, independent identities for its entities and subsidiaries were the need of the hour. But, over time it became inevitable to give these entities a unified identity in order to induce new strength and vigor in the group. Our head office in Bahrain initiated this re-branding campaign during June 2009 and the theme of re-branding revolves around the concept of partnership.

The re-branding entails corporate unified identity along with a complete image renewal for the bank. This unified identity is a true reflection of our enlightened vision of progress through seamless adherence to Shariah guiding principles. This unified identity is a vibrant manifestation of our endeavor to create a fair and equitable banking system that ensures continuous participation in our customers' successes. It is a promise of our renewed commitment to meet the financial needs of customers through lasting partnerships woven around shared beliefs and the provision of world-class banking services. In re-branding, the tagline 'Your Partner Bank' was introduced on the same lines. It signifies a close, personal, and long-term relationship between equals who share in the rewards and benefits arising from the partnership. By taking a long-term view of the relationship, Al-Baraka and its customers can achieve more together. It is focused on opportunities, implying that Al-Baraka contributes to the development of the people, businesses, and communities it serves. The new logo is also designed keeping in mind these ideas of partnership and progress. The colours have been evolved from the old identity and represent Al-Baraka's heritage. Together, it forms strong and lasting partnerships, which is the core essence of the new positioning.

PAGE: AL-BARAKA HAS INTENDED TO ESTABLISH AN ISLAMIC BANKING ACADEMY OF INTERNATIONAL STANDARDS. WILL YOU ELABORATE?

SHAFQAAT AHMED: Al-Baraka believes in corporate social responsibility and establishment of this academy is a one such humble efforts. This academy will focus on providing Islamic banking training to bankers and creating awareness. We hope to complete this project during the current year. We also plan to take advantage of our global network by inviting our senior and renowned members from all over the world to deliver lectures on various aspects of Islamic banking and finance.

PAGE: IN YOUR OPINION, WHAT ARE THE MAJOR CHALLENGES FACING THE ISLAMIC BANKING INDUSTRY IN PAKISTAN?

SHAFQAAT AHMED: Islamic banking has a bright future in Pakistan, but there are many challenges that this relatively new industry has to face. Some of these challenges include lack of trained human resource, liquidity management, and lack of awareness about the Islamic banking products.

PAGE: WHAT ARE YOUR PLANS?

SHAFQAAT AHMED: Our sponsors have a great commitment to their Pakistan's operations. We are working on some strategic plans and Insha Allah we will be successful in our plans. We want to stay, expand and provide 100% Shariah compliant services to our customers with the entire peace of mind that their financial needs are being met with 100% Shariah compliant way.