Leading The Way
Al Baraka Islamic Bank CEO, Mohamed Al Mutaweh on Islamic financing and Sharia-compliant FinTech solutions.
What Have Been Al Baraka’s Main Accomplishments In 2017?
Despite the dif cult operational and business environment in 2017, we remained focused on building quality assets. We continued our strategic partnerships with local sovereign agencies and strong relationships in regional markets. More speci cally, a strong growth was achieved in corporate portfolio by exploiting our relationships across the region and increasing business volumes with existing quality customers. As for SMEs, fresh facilities were granted under Tamweel program with Tamkeen. In our Pakistan operations, efforts were made to consolidate the substantial growth achieved because of merger and acquisition transaction with another Pakistani bank. We also successfully launched our new Sharia Compliant Credit Card to meet our customer needs and expectations. This product carries unique feature and received a very positive response from the market. In addition, we continued to focus on our main business markets in Bahrain, Pakistan, GCC, and MENA as these markets represent natural extension of the Bank’s strategic positioning.
What Facilities Does Al Baraka Offer To High Net Worth Individuals And Business Owners?
Our Retail Banking department provides private banking services that are designed for high net worth individuals and wealthy families. They provide investment advice and wealth management. Customers can choose from special accounts in different currencies, a diverse portfolio of nancing facilities, investment portfolios and fund transfers worldwide, as well as different types of investment saving accounts. In addition, they can offer a wealth of investment solutions, including structured products and investment funds, and structured products, both tailor-made and standard, to meet the speci c requirements of their customers. They also offer advice on philanthropy and charitable activities.
What Sets You Apart From Your Competitors?
AI Baraka Islamic Bank was established in 1984, so it has a long experience with local and regional markets based on rich human, financial, and technical resources. Moreover, Al Baraka has proven records of success and nancial performance. We also continued our efforts in enhancing the assets quality, diversifying income sources, launching new products and services, enlarging income from core businesses and strengthening the organization governance structure. The bank is a part of leading Islamic banking group, Al Baraka Banking group “ABG”, which has banking subsidiaries in 16 countries with strong and solid human, nancial and technical resources, as well as wide branch network and rich experience in their local markets.
Bahrain Is Currently Investing A Lot In Financial Technology (fintech). What Impact Do You Think Fintech Will Have On Banking In The Kingdom?
Bahrain is fast becoming a recognized global FinTech hub. Earlier last year, the Central Bank of Bahrain launched a regulatory sandbox for FinTech start-ups with the Bahrain Economic Development Board and Singaporean Fintech Consortium, announcing the launch of Bahrain Fintech Bay, the largest dedicated ntech hub in the Middle East and Africa. Al Baraka signed a partnership agreement with BFB, and along with two other banks, established ALGO Bahrain, which is the world’s rst ntech consortium with a mandate to accelerate the launch of Sharia compliant FinTech solutions. Eight more banks are expected to join the consortium in Phase 2. ALGO Bahrain is positioned to launch 15 banking industry platforms by 2022 across the GCC and emerging markets. Through a collaborative approach, ALGO Bahrain will enable Islamic banks to research, innovate and operationalize ntech solutions in a cost effective and accelerated way. It will have complete strategic, operational and nancial independence to innovate nancial solutions that are suited for the digital economic ecosystem. The ALGO era is set to revive the growth of the global Islamic banking industry by promoting nancial inclusion, creating new employment opportunities, and channeling fresh investment to critical economic sectors across the GCC and emerging markets.
Islamic Banks Are Going Through A Period Of Decline In Asset Growth. What Measures Has Al Baraka Taken Against This Challenge?
Given the dif cult business and economic environment that prevailed in 2017 at both regional and international levels, the bank redirected its focus to consolidate operations, activate risk management practices, realign core processes, provide contemporary business solution to customers, enhance quality of services, and develop skill base, all of which provided an essential support in such a testing time. The bank remained strong against the adversities of prevailing operating environment. Moreover, we were very cautious in booking new business during 2017. Improving the composition of nancial position, rationalizing the riskiness of operations, sustaining quality, and controlling cost, remained the utmost priority for the bank during this period. The growth was primarily observed in secured avenues such as sovereign and government guaranteed transactions or facilities collateralized by tangible securities.
The World Economy Has Been Experiencing Stagnant Global Trade And General Lack Of Investment. Has This Had A Major Impact On Bahrain’s Banking Industry? And Has It All Been Negative Or Are There Improvements As Well?
We should note that the main activities of banking industry in Bahrain are focusing on local market, and this industry is one of the main contributors to sustain the growth in this market. The banks’ nancing facilities to local sectors exceeded BD 8.4 billion in 2017, which indicate the size of its contribution to enhancing economic growth. According to EDB’s gures, banking sector’s contribution to GDP is second after oil sector with a 16% share. During 2017, the net pro ts of commercial banks listed on the Bahrain Bourse reached one billion and 34 million Bahraini dinars, increasing by 8.3% compared to 2016, which is more strong evidence of the improved performance of banking industry in Bahrain.
What Kind Of Social Responsibility Programs Do You Currently Have For The Community?
Al Baraka Islamic Bank is considered a pioneer in Islamic banking. We seek to maintain our position as the leading organization committed to social responsibility. The bank continues performing its social responsibilities by directing its products and services for the development of communities in which it operates to enhance them socially and economically, and to improve the quality of these products and services, as well as through the support of nancing of small and medium enterprises and taking care of youth skills and training them. As well as through its social contributions and generous nancial donations to serve community and charitable organizations through sponsorships and donations program to charities and local clubs and scienti c and religious centers, in addition to supporting needy families in Bahrain. The bank continues its sponsorship of many important international nance and banking events and conferences that are held in Bahrain such as the World Conference of Islamic Banking and AAOIFI. The bank also employs a number of students who are in the nal stages of their undergraduate studies during the summer vacation, as well as fresh graduates with the aim of re ning their knowledge, which is considered an important part of the bank’s contributions towards the community.
Are There Any Local Or Regional Expansion Plans For Al Baraka In The Near Future?
As I referred earlier, we completed successfully in 2016 the merger transaction between the Bank’s operations in Pakistan and another Pakistani bank. Our focus now is to consolidate this merger and to maximize the bene ts from it. Therefore, some 35 branches close to each other were closed, reducing the network to 209 branches. Actions were taken to streamline product range and activities were progressively moved on to a single core banking system. In Bahrain, the focus was on repositioning our branches in areas or places, where they can serve better larger classes of citizen, businesses and customers. But in terms of products and services, yes we have plans to launch more products and projects such as our partnership agreement with various real estate projects developers, to provide nancing facilities to customers wishing to purchase a residential unit in various located real estate projects either through the Social Housing Finance Scheme (SHFS) or the normal deals. The Bank also launched recently Home Remittance Service to Pakistan for its customers in Bahrain. Under the new service, customers who have an account with Al Baraka Islamic Bank in Bahrain will be eligible to transfer funds to customers who have an account with Al Baraka Bank of Pakistan or any other bank in Pakistan. The remittance will be free for customers sending remittance more than PKR 21,000/- to their home country safe, fast and reliable.