Not many will dare to do what Hussain Al Qemzi did in 2008. As the world’s major corporates struggled to survive, the UAE national launched a new bank in Dubai - and within 12 months reported a $138m profit. With such a track record, it is no wonder the CEO of Noor Bank currently stands resilient amid a challenging economy.
“For us to be born in that year - being in the ‘eye of the storm’ - was definitely a challenge. It taught us a lot of things, [particularly] how to be resilient and [become] fighters. And here we are after all that … and we are making money,” Al Qemzi says. Noor Bank has remained profitable since the beginning. “We have been growing nicely over the years and have been [increasing our] profit for the last three years,” he says.
“[Last year] was a tough year, not just for us but for the whole market due to the problems with the small and medium enterprises [struggling to repay debt]. However, I am confident that we will still be on track and will create value and profit for our shareholders.”
Al Qemzi was not a surprise choice to lead the institution. An industry veteran, he has previously served as the CEO of Sharjah Islamic Bank and as a former board member of both the Dubai Financial Market and Dubai International Financial Exchange. He was chief operating officer of the flagship Dubai International Financial Centre and is credited with much of the free zone’s initial groundwork.
Noor Bank is now a leading Islamic finance institution in the UAE, but it is not governed by any set of standard regulations. Al Qemzi says uniform standards need to be set by central banks and regulatory authorities to provide a level platform for all Islamic financial institutions and to safeguard customers.That standardisation is more important as Islamic finance expands globally. The sector worldwide was estimated by Standard & Poor’s to be worth $2.1 trillion at the end of 2016, with the six Gulf states, Malaysia and Iran accounting for more than 80 percent.
“As Islamic banks grow across multiple jurisdictions and work on transactions involving multiple banks, it is important to create a common platform, an element of standardisation, which will be accepted by all. The real challenge is on the implementation side, as some of the international standards require robust regulation structures at central bank and government level, and require the readiness from Islamic financial institutions to adopt them. This will enable banks to execute larger and more complex transactions more efficiently, as these typically require multiple banks to participate and individual board standards may become an issue to unify. “
In May 2016, the UAE Cabinet approved the launch of a new Sharia Authority, which acts as a national regulator of the country’s seven Islamic banks, as well as Islamic divisions within conventional banks. The Sharia Authority falls under the UAE Central Bank, which is responsible for appointing and supervising board members who would determine a national set of principles for Islamic banking products. The Authority does not make the existing Sharia boards of individual institutions invalid but acts as a higher regulator of approved products.
“The Central Bank is likely to issue the standardised Islamic finance products guideline this year. And I think it should happen,” Al Qemzi says.
“There are differences within the institutions [in the UAE], and that creates uncertainty, which is not good for business. And I see no way but to move towards [standardisation]. We all have to agree to do things in a set manner, at least in one country. If this is successful, which I am sure it will be, it will add a lot of value and a lot of strength to Islamic banking within the country.”
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