Noor Bank chief executive officer Hussain Al Qemzi has ruled out possibilities of any possible mergers in the UAE’s Islamic banks.
The last merger in the Islamic banking industry was seen in 2012 when Dubai Bank merging with Emirates Islamic Bank, while on the conventional banking side the latest merger taking place is between First Gulf Bank and National Bank of Abu Dhabi, expected to complete by end of first quarter 2017. The merged entity is likely to create one of the largest banks in the Middle East and Africa, with assets of $175 billion (AED642bn).
“I don’t see any mergers [among Islamic banks], but I advocate collaboration, which is vital among our banks,” Al Qemzi told Arabian Business in an exclusive interview.
“We do hold a special forum under the UAE Banks Federation where we exchange views and look at issues that we face. Collectively, we try to pursue these issues.”
Al Qemzi said Islamic banks need innovation to integrate and position themselves to offer value and a better choice for Muslim and non-Muslim [customers] in order to grow.
“It matters being innovative and collaborative when it comes to products and to a community that we serve,” he added.
The CEO said a shortage of Sharia scholars was also impeding growth of the Islamic finance industry with many institutions in the country sharing advisors – who each have a unique combination of expertise in finance, law and Sharia principles.
“Unfortunately, there is no clear mechanism for how we are getting fresh blood into the market. It is still one of the challenges impairing speedy growth of Islamic finance.”
He admitted that Islamic banking has a long way to go to rival conventional banking, with the former existing for barely 50 years, while the latter prevailing for over four centuries.
While Muslims globally are estimated to be have $11.5 trillion in wealth, just $2 trillion is held in Islamic financial services, according to London-based Edbiz Corporation.
“If you look at our domestic market where the majority of the population is Muslims, Islamic banks still haven’t got the lion’s share. They are still much below the conventional banks, and so I see they have a long way to go,” Al Qemzi added.