A Full Pipeline

Barwa Bank has received several accolades recently, especially in relation to sukuk funds. What do these awards represent for the bank?

We picked up nine awards in total during 2012, and another two in January 2013. We see awards as recognition by commentators, customers, and our industry peers of what we are doing and, just as important, the way that we are doing it. Obviously, they are part of the way in which we look at success. The acid-test of success is our financial results, but there are others things that reinforce our belief that we are doing the right thing.

What is Barwa Bank’s positioning in the Qatari market?

We are the newest, youngest, and fastest growing Islamic bank in Qatar. We are focused and differentiated and do not seek to be all-things-to-all-men, competing hard in areas where we believe we can add value to relationships.

How did legislation passed in 2011 limiting the number of financial institutions that can offer Islamic banking services affect your customer base?

It has been overwhelmingly positive. To find oneself in a marketplace with sharply reduced competition and in a segment that is growing faster than conventional banking is obviously a desirable place to be. For customers for whom sharia-compliant banking is important, we have an advantage as one of four Islamic banks in Qatar and we have seen a movement of customers, assets, and balances from the conventional banks. It has been an interesting period for us.

Does Barwa Bank have any plans to engage in further international sukuk transactions?

Indeed, we do. We have a number of opportunities in the pipeline, as well as issuers that we see coming to market over the next few months.

What are your comments on Barwa Bank’s pursuit of a credit rating?

Banking is a rated industry, and like all banks we need a rating. We had a very strong 2011, followed it up with a strong performance in 2012, and have had a very positive first quarter. We intend to start the rating process in 2013. A rating facilitates access to the international capital markets and provides quality assurance to potential counterparties, some of whom may be unfamiliar with Barwa Bank and Qatar in general.

How do you differentiate yourselves in such a heavily saturated market?

We are new entrants to a crowded market place and differentiation is essential if we are to succeed. One only has to look out the window to realize that Qatar has a lot of banks—there is no room for another “me-too” proposition. We are not a mass-market retail bank and our core focus on the retail side is upon affluent progressive Qataris who are demanding and discerning. We aim to be a first-class bank that can deliver excellent service and a sophisticated product proposition as good as anything available in the conventional sector, though in a sharia-compliant manner.

What sort of services do you offer to your clients?

We offer a full range of banking and investment services with an emphasis on responsiveness and customer service quality. In addition, we introduce our customers to unique investment opportunities that are available only through Barwa Bank. We have an investment banking subsidiary (The First Investor) and an increasingly sophisticated treasury team who “manufacture” with the bank focused upon distribution. Good examples might be our Brazilian Real Estate Income fund, structured products (the Turkey & Indonesia Equity Note we did in 2012 was very popular) through to more exotic examples like the Colored Diamond Fund we run with Aspreys of London.

What is your outlook for the banking sector in the coming years?

Given the rapid growth of the economy and the ambitious plans set out in the National Vision, the scope and scale of the opportunity here in Qatar is very significant indeed. I would say the outlook is extraordinarily positive.

What about the medium-term plans for the bank?

Well, our strategy seems to be the right one; we have moved from operating losses to significant profits in two-and-a-half years, so we will press on doing more of what we are doing. We will continue to build-out our corporate banking franchise—where we are already a meaningful player—and participate to the utmost in the major financing opportunities associated with the infrastructural development projects that lie ahead. At the same time, we are committed to the expansion of our institutional proposition and see the development of regional and global Islamic capital markets as a real opportunity for us. Sukuk-related activity is the best example. On the personal side, we will open some new branches; this will be highly selective and consistent with our positioning as a boutique bank with a focus on customer experience. At an appropriate time, we intend to be a listed company and, in due course, to build out from Qatar in terms of regional and international presence.

© The Business Year – April 2013