Going global

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Noor Islamic Bank's CEO, Hussain Al Qemzi, tells Claire Ferris-Lay why he won't rule out a merger if it means achieving his global aspirations.

When Noor Islamic Bank first launched in January 2008, the world was its oyster. Demand for Islamic banking was booming and experts were predicting that the industry would grow from $1 trillion to $2.8 trillion by 2015. Noor's five-year plan saw it expanding across markets in the Middle East, Europe, Asia and Africa.

The Dubai-based Islamic lender was also cash rich - 25 percent owned by the government of Dubai and 25 percent by the emirate's ruler - it was actively seeking acquisitions abroad worth as much as $1bn each. In short, Noor was going global. And quickly.

But fast forward 18 months and the economic picture is quite different. As Dubai has struggled with plummeting oil and real estate prices and the future of Islamic banking has been further scrutinised amid the downturn, Noor's expansion plans have been halted at the first stage with just one representative office abroad, in Tunisia.

While life at Noor today may be quite different from what Hussain Al Qemzi, the bank's CEO expected when he first took on his role, some things haven't changed. For one thing, he still has plans to go global. And if that means merging his bank with another, then so be it.

"I wouldn't [rule it out]," he tells CEO Middle East. "Noor was born with the aspiration to grow... if that merger meets our interests... and it has mutual benefits to us - monetary or strategically, yes we will."

His openness about a potential merger doesn't come as a shock. Al Qemzi, who has spent the last 25 years working with some of the world's leading banks including Citibank and HSBC, is well known for his opinions on greater banking consolidation in the Gulf.

"We should have less banks and bigger banks, and we should have banks that can add value and create the right mix that can reflect what the UAE is. The UAE exists to serve many countries around us - we do business with the Subcontinent, Iran, Africa and China - we should have strong banks with links to these economies," he explains.

In the meantime, however, Al Qemzi admits that his biggest challenge amid the financial crisis will be getting Noor back on track to achieving its goal of becoming the world's first global Islamic bank - a dream he believes has only been set back by a year. "Our biggest challenge is to go back to our dream; to turn ourselves into a global bank. I still think there is a big void where we can offer our services. There are no global Islamic banks."

For now, he says, expansion plans are firmly on hold. "We are still looking around, but I will look more opportunistically now," he adds.

Noor isn't the only Islamic bank that has been forced to put expansion plans on the backburner. While the industry boomed on the back of rapidly rising oil prices, growth has slowed amid the economic downturn.

Maldives expansion on hold

Noor's first casualty was its first Maldives unit which it planned to open in July last year with a paid-up capital of $10m. Noor Maldives Islamic Bank, which is in partnership with the Asian nation's Ministry of Finance and Treasury and a unit of Saudi-based Islamic Development Bank, was to be the island's first Islamic bank which would tap its predominantly Muslim population.

Al Qemzi says that the Maldives unit was not put on hold due to money constraints but rather because resources had to be deployed elsewhere. "All parties thought it time to put on hold...We were in the middle of the crisis and it was hard to make a decision. The Maldives wasn't [put on hold] in terms of costs, it was in terms of focusing inner energies and people on the situation at hand."

He adds that the economic downturn hasn't halted all of Noor's plans, and says that the bank is still on track to open an additional twenty branches across the UAE by the end of the year. The decision to forge ahead with these plans is largely because, thanks to the downturn, Al Qemzi has realised that Noor's future lies in the hands of its retail banking sector.

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