The “efficiency in spending” will be key to the banking system’s success in handling the current economic turbulence, says QIIB chief executive officer Abdulbasit A al-Shaibei.
“In order to be efficient, we must rationalise our spending. But I do not wish to see this as cost-cutting,” al-Shaibei said in an interview with Gulf Times in Doha.
Asked whether the nature of operations of an Islamic bank poses challenges or provide opportunities in a difficult economic landscape, al-Shaibei said, “It is always a challenge. Because at the end of the day, we are part of the system. If there is a challenge facing the banking system as a whole, we are very much part of that challenge. And when it comes to securing liquidity, I think we all fall in the same line.”
The CEO said, “If I talk about QIIB, we are still liquid within the reasonable limit. And with the liquidity that we have, we don’t have an issue with the Basel III ratios. But since we are looking ahead to the future, we have decided to go in for the Tier 1 issuance. This will enhance our equity ratio.
“On the other hand, if we think we have to go in for a normal sukuk, we can enter the market. But for the time-being, we believe we are fine. But banks in general should be more conservative in terms of trying to build a reserve. This is because building reserve is a much better solution in the short to medium term.”
Al-Shaibei said QIIB would adopt a rational policy vis-à-vis opening new branches.
“Not all branches that we wanted to open may be set up this year. We are doing some restructuring. As I said earlier, we are going through a phase of rationalisation in spending. We are trying to be more efficient…rely more on technology. I think we will be very slow in terms of recruitment. We try to focus only on recruiting Qataris, whenever there is a new opening.”
He said the new joint venture bank in which QIIB was involved in Morocco was expected to be set up by the second quarter of this year.
QIIB has already signed a joint venture agreement with CIH Bank (Credit Immobilier et Hotelier), a Moroccan bank, for the establishment of a bank in Morocco. Under the agreement, QIIB will have 40% stake in the proposed bank.
“In Morocco, they have passed a law for Islamic banking. Actually, QIIB has been talking to Moroccan authorities about Islamic banking for more than a decade now. We are one of the first prospective investors to meet the authorities there. We have got the approval for incorporating a new company. Now that company has to be converted into a full-fledged Islamic bank.”
The JV agreement is in the framework of QIIB’s strategy, which focuses on pursuing overseas opportunities to enhance the financial position of the bank and diversify its portfolio investments, with strong local partners.
Al-Shaibei also said QIIB would stay focused on the Mena (Middle East and North Africa) region as far as overseas opportunities are concerned now.
“Morocco is going to be our gateway to many other markets,” he said.