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An Exclusive Interview: Adnan Ahmed Yousef, President & Chief Executive, Al Baraka Banking Group

June 2016

With over forty years of banking experience, Al Baraka Banking Group President & Chief Executive Adnan Ahmed Yousif, has a name that is as synonymous with his organization, as it is with the Islamic finance industry. Influence, vision, humility and ambition are some of the words used to describe this personality. Business Islamica sits with Mr. Adnan Yousef for an exclusive interview.

What is the general look of Islamic banking at present?

There are several factors pointing to a better growth scenario for Islamic banking in the rest of the current decade. Signs of revival of the global economy, which reflect a good possibility of global acceleration in the growth in banking sector in general; is one factor. 

Islamic banks, too, will benefit from the recovery of the global economy, and hence their growth may be even higher than the current percent. While the global economic outlook certainly influences growth in the Islamic banking sector, Asia’s economic expansion is an even more relevant factor in projecting the development of Islamic banking. There are indications that growth in Asia during the rest of the decade is likely to be higher than the growth in the “developed” world.

The world’s Muslim population will also increase by (at least) two percent per annum, which will be reflected in the growth of Islamic banks’ potential clientele. The economic conditions of the world’s Muslim population are also improving. Another factor that needs to be kept in mind when assessing the future growth of Islamic banking is the unused Islamic banking potential in the countries with a large proportion of Muslims.

According to recent statistics, Islamic Banking is growing faster than conventional banking. Even in Europe non-Muslim individuals and companies have begun to use Islamic Banking. Why the surge in popularity?

Islamic finance offers the ideal platform to boost ‘green financing’ and promote ethically responsible investments. 

As Shari’ah rules prohibit participation in businesses involving alcohol, pork, and gambling, Islamic banks only support businesses that adhere to values that are ethically and morally sound.

Therefore, we note that demand for Shari’ah-compliant products continue to rise alongside a growing Muslim population. Muslims are predicted to account for more than 25 per cent of the world population, growing twice as fast as the world’s non-Muslim population. Islamic banks address these groups’ needs and natural inclination to prefer Shari’ah -compliant financial products.

Even non-Muslim investors see the potential for profit in Islamic banking. Islamic financial products, as a rule, carry lower risk investments while enabling them to earn a profit and—at the same time—diversify their portfolio to further reduce risk. Moreover, Western investors can track Islamic financing industries through international rating systems. When purchasing Sukuk, they can easily assess the strengths, weaknesses, and risk of the bonds by simply referring to benchmarks that track the financial industry.

Although Islamic financial products come with a complex set of rules,they are far simpler to understand than their conventional counterparts. 

Firstly, all contracts have strict and focused guidelines; Islamic financial institutions have scholars that offer consumers guidance for every venture and proceeding. They follow a strict set of principles to ensure that every single transaction is carried out according to Shari’ah law.

Your name is well recognized both regionally and globally, what unfulfilled ambitions do you still have?

Well, running subsidiaries in fifteen countries, fifteen different markets would be a challenge for any Chief Executive. The market is a challenge and not just for Al Baraka, but for banks worldwide. Capital adequacy and positive requirements are going to be some of the challenges banks will be facing in the next two to three years. Bringing together subsidiaries in fifteen countries to work together on one strategy that focuses on providing real services and products to the societies of these respective countries in a way that contributes to their development remains a challenge, and an ambition I personally hope to achieve.

How has the Al Baraka Banking Group evolved in the past 10 years?

Although the Al Baraka Banking Group is relatively new, its antecedents reach back almost 30 years. The Group has come about as a result of a consolidation of various interests of Sheikh Saleh Abdullah Kamel in 10 Islamic banks, with the object of adding strength and purpose to his vision of creating a global Islamic banking group. 

The Group has thus progressed from stride to stride, carrying our core values forward for the benefit of our shareholders and the society at large. Al Baraka's strategy after formation was fourfold: 

• To achieve a successful consolidation

of the subsidiaries into the Group


• To establish control over the members of the Group via head office departments established by the Group's executive management team

• To achieve a successful share flotation

• To commence the Group's expansion, both organically through expansion of its existing subsidiaries and by the establishment or acquisition of new subsidiaries in new countries.

What are the main challenges facing Islamic banking and what are the solutions? 

In spite of the continuing aftershock of the global financial crisis, the Islamic industry is expanding in many emerging markets and introducing new standards that should help develop products and attract investors. 

The industry's ability to absorb the shocks of financial crises better than conventional institutions has attracted remarkable attention, including the non-core markets of Europe, Asia and North America. Therefore, we can say the most notable achievement made in the global Islamic banking and finance industry over the last 2 decades is that the industry is truly globalizing. 

That is, spreading as a universal alternative to conventional finance and banking worldwide. One of the challenges Islamic banking faces is creating enough awareness amongst Muslim and non-Muslim customers, potential customers and bank staff.  Educating customers about Islamic finance, understanding their needs and delivering products and solutions that are creative, yet adhere strictly to Shari’ah principles and are cost effective, is part of a concerted strategy that retail banks are now undertaking upon in order to develop the sector more fully and enlarge their share of the Islamic retail business. 

And what do you see as some of the more immediate concerns?

Key concerns holding back the development of Islamic retail banking, particularly in newer markets, include limited liquidity management instruments and lack of lender of last resort facilities. Moreover, in order to keep up with globalization and to serve the growing wealth of the rapidly increasing global Muslim population, the industry needs to invest in research and development to create new and innovative Shari’ah compliant products and services that go beyond simply matching those offered by conventional banks. 

Furthermore, while few would disagree that the sector`s growth potential is enormous, there is an urgent need for a regulatory, supervisory and Shari’ah framework to be put in place across all markets in order for the sector to realize its fullest potential. Stronger standards for corporate governance, transparency, disclosure, accountability, market discipline, risk management and customer protection are crucial to increase market confidence and penetration.

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