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Banking
Global Finance: Last year Ahli United Bank [AUB] completed its transformation into a pan-Islamic bank. Why did you decide to move away from traditional banking?
Ahmed Alkharji: AUB transformed its banking license and business model into a fully Islamic bank following its acquisition by Kuwait Finance House. [KFH]leading Shariah compliant banking group in October 2022. Given the growing acceptance and demand for Islamic banking, the transformation of AUB into an Islamic bank will open up many growth opportunities and will contribute to the further development of Islamic banking in Bahrain as well as in other countries. wider region.
For example, in Egypt, where AUB has a long-standing presence, as a Shariah-compliant lender, we may be looking for significant growth opportunities. Currently, Islamic banking accounts for only 5% of the Egyptian banking market. Moreover, in markets such as Egypt and the UK, AUB was a relatively smaller player among conventional banks, but will be one of the largest players among Islamic banks, thereby providing us with better opportunities for growth.
Overall, AUB’s transition to Islamic banking is an important milestone in the bank’s growth journey and a testament to its commitment to providing a full range of Shariah-compliant banking products and services.
GF: What does this entail for customers?
Alkharji: Changes occurred during conversion. The products and services offered to customers have been transformed in accordance with Shariah requirements. Our goal is to continue to provide solutions to our existing client base, while targeting new clients attracted to our innovative Islamic banking and investment offerings, both within and beyond our current geographic coverage.
Islamic banking has undergone significant evolution in recent years. In particular, through innovation, we now offer products and services that compete with those of traditional banks regionally and internationally. This has stimulated increased interest from a wider range of retail, corporate, private and wealth management clients, whether Shariah-compliant or not.
GF: Following the merger, you are now the second largest Shariah-compliant lender in the world by assets. What markets are you interested in?
Alkharji: Our immediate priority is to transform our traditional banking subsidiaries in Egypt, UK and Iraq into Islamic banks. There is significant potential for growth in Islamic banking in these jurisdictions and we hope to exploit it.
GF: What products and services will you focus on?
Alkharji: We believe that our customers are looking for convenience and simplicity. If we can ensure this and also comply with Shariah, we will succeed in our mission. AUB Group currently offers comprehensive and enhanced Islamic banking products in sectors such as corporate, retail, private equity, trade finance and financial markets. We will strive to ensure that the financial needs of all our target customers are met through Shariah compliant services, be it savings, investment, borrowing or transactional needs.
We are also very focused on introducing a wider range of innovative offerings and digital solutions spanning banking, finance, international trade, multi-asset investing and private banking, as well as wealth management solutions. Our goal is to continually meet the evolving needs of our customers and at the same time improve their banking experience.
GF: How do you see the future of Islamic finance?
Alkharji: The future of Islamic finance is promising. We believe it has significant potential for growth and global recognition beyond traditional Islamic markets as demand for ethical and responsible financial practices continues to evolve coupled with growing cross-border collaboration, standardization and innovation efforts.
The Islamic finance sector is experiencing strong growth, supported by increasing banking assets and the booming sukuk industry. Global Islamic financial assets grew 12.2% in 2021 and 9.4% in 2022, helping them cross the $3 trillion mark in 2022, according to ratings agency Standard & Poor’s. % increase in assets.
The growth of Shariah-compliant finance continues to be driven by factors such as increased standardization, development of new products, increased issuance of sukuk, focus on sustainability-related topics by major Islamic finance players, development of fintech platforms and applications, compliance Sharia. asset management products and digitalization of financial services.