Interview: Abdulbasit Ahmed Al Shaibei

What role do you foresee sukuk (Islamic bonds) playing in the coming years?

ABDULBASIT AHMED AL SHAIBEI: The decrease in oil prices has translated into a greater momentum for issuances by governments, and an avenue for GCC member states to start tapping this market to finance their deficits. This will have an impact on local funding markets, where liquidity may tighten as the government optimises its spending, pushing local banks to seek funding from the international sukuk market. The already increasing supply of Islamic bonds issued by banks and financial institutions may start dictating increased credit spreads, and thus the net profit rate yields of participants at a general level.

As far as QIIB’s sukuk programme is concerned, it is very much driven by the growth objectives and local developments, as well as the government’s inclination towards infrastructure financing. That said, one may expect some activity from our bank with regards to issuance during 2016.

In your opinion, is Qatar’s Islamic banking industry looking to further expand internationally at a pace similar to other conventional banks?

AL SHAIBEI: From the beginning, banks have always had a drive to expand internationally. The local market has always been of keen interest to both local banks and our bank in particular, but as in the case of the conventional banks, we aim to diversify our portfolio. Hence, agreements signed with other parties – like the memorandum of understanding between QIIB and Southwest Securities in China, and more recently the joint venture agreement with CIH Bank in Morocco – signal that we have a desire to seek good, viable opportunities outside of Qatar. We are attracted by markets that align with our set strategy, and which have a focus on protecting and increasing shareholder value. On top of that, we must aim to promote Islamic financing and banking in markets where it is under-served and can ultimately be successful. Aside from our own operations, a number of other local sharia-compliant banks intend to enter other markets.

What impact has the state’s current infrastructure drive had on the development of corporate banking portfolios in Qatar?

AL SHAIBEI: As our bank and most banks in Qatar are founded on government infrastructure, the predictions are easier to make. Since funding requirements are determined by the stages of completion of projects, estimations for the overall development of the corporate banking segment are expected to perform within previous expectations – especially when one considers that the overall performance of banks in 2015 continued to show growth in line with overall banking sector growth. This can be attributed largely to the state’s current infrastructure drive, which will continue in 2016.

How do you see overall banking portfolios developing? Are there changes in strategy locally in regards to diversifying income sources?

AL SHAIBEI: The overall portfolio development in 2015 has been on track and has proven largely that the business model of QIIB, and of the banking sector as a whole, did not require any substantial modification for the year. We have been able to increase small and medium-sized enterprises (SMEs) within the corporate banking segment, especially with support through the Al Dhameen programme at Qatar Development Bank.

It was also observed that SME growth strongly contributed to export value for the country on a relative basis, in comparison to other sectors. This too has been attributed to government efforts to bolster the private sector in line with the economic diversification goals of Qatar National Vision 2030.