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Ain't no stopping us now

March 2008
Hussain Al Qemzi, group chief executive of Noor Islamic Bank spoke to Paul McNamara about the pitfalls and challenges of trying to build the world's first global Islamic bank.
Hussain Al Qemzi is no stranger to the banking industry since he has spent the past quarter of a century in the industry here in the region. He has worked in both corporate and wholesale financial business banking as well as retail banking, working with some of the leading financial institutions in the UAE.

He is now group chief executive of Noor Investment Group and its flagship entity Noor Islamic Bank . Prior to this he was the chief executive officer of Sharjah Islamic Bank , and is a former board member of the Dubai Financial Market and DIFX. His long career has also seen him do stints at Citibank, HSBC Middle East, and FGB.

Noor Islamic Bank is Dubai's attempt to build the world's first truly global Islamic bank in the same way that it has managed to build the world's first truly global Middle Eastern airline in the form of Emirates .

The seriousness of this endeavour is perhaps best underlined by a quick look at the share register of the bank which shows that the bank is owned 25 per cent by the Dubai Group , 25 per cent by the Investment Corporation of Dubai , 25 per cent by His Highness Sheikh Mohammed Bin Rashid Al Maktoum UAE Vice President, Prime Minister and Ruler of Dubai, 5 per cent by the government of UAE and 20 per cent by other investors who constitute a Who's Who of the emirates' leading families.

Al Qemzi is a lucid and candid talker who has a very clear vision of where the bank is headed and how it will get there.

Where did the idea of the bank come from in the first place?
The original idea came from the His Highness Sheikh Mohammed bin Rashid Al Maktoum. As you know the city of Dubai will be focusing on sectors such as finance, transportation and logistics. As part of this, the city was looking to enhance and strengthen the financial sector. We can see this in the form of the DIFC as well as the merger of the two largest banks, Emirates and NBD, as the establishment of what will be the largest Islamic bank in the world, Noor Islamic Bank . All of these developments are driven by the same vision.

How did you prioritise what needed to be done first when creating thebank?
Setting up a bank is not an easy job. From the licensing process, the equipment process, the procedural requirements, and getting people across the whole organisation. Trying to do all of this in one year was a big challenge, but we managed to do it in nine months. It was a remarkable achievement by any standard.

Establishing a bank is not like buying a building. We are in a highly competitive environment, particularly for people, and this made it very difficult, but we managed to pull it off.

The second thing we needed to establish was our own position in the home market while at the same time keeping our eye on the main goal which was to become a global bank.

How did you solve the problem of finding enough good people?
It was not easy but we approached the problem by accepting that it was part of the challenge. There is no point in sitting and complaining. We simply needed to find good people as a part of our doing business. We took different approaches to this but essentially we simply set out looking for bankers with experience of launching organisations.

So we started with a core team and then we built it top-down, which I think helped us to cope with the worst of the challenge. But it has not been easy and even in the course of building the bank we have lost people.

What is the strategy for taking the brand from the UAE and moving it out across the world?
While we were in the process of establishing the bank we engaged the services of one of the leading management consultancy companies and we asked them to come up with a strategy document for taking the bank global. What we ended up with was a five-year plan that focused on taking the brand across three continents.

Essentially we are looking at Asia, Africa and Europe to begin with. When you look at the markets, then these are the areas where most of the world's population of Muslims live. Between Asia and Africa we can see a lot of areas where there is a real need for a strong Islamic bank. We also see Europe as an excellent prospect since many parts of Europe are highly regulated and also have large populations of immigrant Muslims.

How do you go about dissecting a continent as large as Asia and choose where you will move first?
If you look at where the Islamic finance hubs in the world are today then you see that they are the GCC and Malaysia, although there are also a large number of countries that are 'up and coming' in terms of Islamic finance. Look at the largest Islamic country in the world, Indonesia, or India and you will see the kind of possibilities and potential on offer. Our aim is to have a major presence in one of these markets. I am keen to look at countries that are not well served at present.

Will you aim to launch in each country or will you acquire in each country?
We will explore all the possibilities. In some countries we will have an organic strategy: for instance there are some small countries where we would not need to acquire. Then there are other countries where you do not have any other choice but to acquire. When you acquire, then you need to make sure that the bank has the right strategy and the right management, the right distribution and make sure that they are the right fit for you, which is sometimes not easy.

How do you establish at the outset what kind of resource that you will need to budget to establish the brand globally?
We have already launched the brand globally. Putting together a global Islamic bank is quite a unique proposition: no one else has achieved it so far. This has helped position the bank correctly from the outset. How do we go about launching in a market that does not know us? That very much depends on what kind of investment that market requires and is based on risk and reward.

Do you expect competition as a global Islamic bank?
In whatever we do, we always expect there to be competition but the advantage we have is that we designed this on a blank sheet of paper. When we started it was always our intention to build a global Islamic bank in terms of people, systems, processes, quality of management and so on. We presumed that we would ultimately operate in multiple countries in multiple currencies and we would work with multiple regulators.

Are you focusing more on retail banking than investment banking?
We are in three areas. We are doing commercial, retail and investment banking. The launch of the bank focused on both commercial and retail banking and that is what people have seen with the opening of our branches but we are also active in investment banking.

Is the globalisation of the brand going to focus more on retail or investment banking?
The first priority in terms of globalisation of Noor has to be in commercial banking. Retail banking takes longer to develop and requires a lot of local knowledge of individual retail markets.

How did you go about mapping out the technology needs for the bank?
The management team who came with me have all worked for global banks, so they know what the gaps are between a national bank and a global bank. This meant that we could design a system of our own that would overcome any the problems that we knew were there for Islamic banks.

How do you go about securing new customers, bearing in mind the competitive market you are in?
When we launched the retail bank we had almost 140 products on offer. But all of these can be copied: it does not take a genius to go and copy a product. What this means is that we have focused instead on quality of service. Banking has to be based on customer needs and the way you meet those needs. It is a simple philosophy but it is behind everything we do. Products will come and go and change over time but service will be there forever.

Do you intend to switch between Noor Islamic Bank and Noor Bank brands depending on whether the country is a Muslim country?
When Islamic banking began many banks wanted to be known as Islamic banks. They wanted to use the emotional appeal of being an Islamic bank. But Islamic banking is there now: it is established. The competition these days is not simply between Islamic banks, but between all banks. We have seen many Islamic banks drop the word Islamic from their name.

© Banker Middle East 2008