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Adnan Chilwan

UAE, DUBAI - Finance

At the Forefront

CEO, Dubai Islamic Bank


Having worked as Deputy CEO of Dubai Islamic Bank for six years, Adnan Chilwan currently serves as CEO. He has had an extensive career spanning nearly two decades in reputable conventional and Islamic banks, such as Dubai Bank, Commercial Bank of Qatar, Mashreq Bank, Abu Dhabi Islamic Bank, and HSBC. He is also a Board Member at Tamweel PJSC, DIB Capital, Deyaar PJSC, Liquidity Management Centre Bahrain, and Dar Al Shari’a Consultancy. He has a PhD and an MBA in Marketing and is a Certified Islamic Banker (CeIB), a Postgraduate in Islamic Banking and Insurance, and an Associate Fellow Member in Islamic Finance Professionals Board.

"All banks have weathered the storm quite well, making sure that prudence has a central seat at the table."

Haji Saeed Lootah, the founder of Dubai Islamic Bank (DIB), in November 2013 received the EFICA Lifetime Achievement Award for his role in developing the Islamic banking sector. How significant is this for DIB?

Clearly this is a huge honor for us and a testament to our belief in DIB and the principles that it was founded on way back in 1975. Established as the first fully fledged Islamic bank in the world nearly four decades ago, we are globally acknowledged as pioneers in the field of Islamic finance. This award further emphasizes the seriousness and commitment of the industry leaders of the country to this fast growing sector in the financial industry. The awarding of the bank’s founder to me reiterates that industry experts have acknowledged the importance of Islamic finance, the contribution of DIB, and the role of the man himself. We are a cornerstone of the UAE economy, and will continue to use our expertise and financial strength to further the development and progress of this great nation.

How does the bank maintain solid customer relations?

Our aim is to strengthen and deepen customer relationships while continuously improving the quality of interaction experience across the bank. With this objective at the forefront, we have continuously invested in technology and related infrastructure, ensuring that we deliver high-quality and value-added services to our customers across a multitude of user-friendly touch points, from branches to automated machines, express centers, online platforms, and even mobile devices. We want our customers to know that no matter where they are, we are ready to serve them with the same consistent high-quality experience across all our channels.

In your opinion, what is the current state of the Islamic finance industry?

Islamic finance is now a clearly established and globally acknowledged phenomenon. The progression over the last four decades, since the inception of DIB, has been massive. Many, including western countries, seriously believe that this sector offers a more plausible alternative to the age-old conventional model of finance. No wonder then that Islamic finance and banking in the UAE has been growing at nearly double the pace of the conventional sector over the last few years. That said, there is still some progress to be made, particularly in the field of innovation around products and offerings. Liquidity management solutions, factoring, and receivables financing including distributor and supplier finance are typical examples of where Islamic finance can play a major role once quality structures are established in these areas. Further tightening of risk management processes and enhancing operational efficiencies will also go a long way in building a long-term and sustainable model. There are roughly 1.6 billion Muslims in the world, which is significant. Meanwhile, the sector boasts assets of around $1.5 trillion. That represents just 1% roughly of the total global market, which means that we have just scratched the tip of the iceberg. However, trend analysis over the past two decades suggests a CAGR of 20%. Now one might argue that the denominator is small, and hence double-digit growth easy to achieve, but clearly there is growth, which is sustainable. Islamic finance, as an industry, proved to be highly resilient and stable during the global financial crisis, which is a major factor in its growing acceptability around the globe.

“All banks have weathered the storm quite well, making sure that prudence has a central seat at the table.”

DIB has signed a partnership with global human resource consultancy Aon Hewitt. How will this partnership improve your staff?

While customers are at the center of everything we do, we also realize that investment in human capital is crucial for any organization, and not just ours. And, clearly, a partnership with Aon Hewitt actually allows us to bring best practices to the forefront within the human resource arena. The aim of this alliance is to not just review staff remuneration and compensation, but also to identify best fit and talent to support DIB’s strategic agenda over the medium term.

What role has the bank played in the overall development of the economy?

DIB has been synonymous with the growth of Dubai and the UAE. As we have positioned Islamic finance to be a key component of the financial sector in the country, we engaged with the stakeholders across the market, including the government and using our expertise and heritage, and concluded some of the largest landmark deals in the history of Islamic finance. Some of these included huge debt capital market transactions around fund raising for infrastructure development, airports, ports and shipping, and aviation. That said, we have not forgotten the backbone of the UAE economy, which is trade and built around the large SME segment in the country. Contrary to popular belief, the UAE’s business world is actually 85% composed of SMEs. We have established comprehensive solutions for this sector, catering specifically to their liquidity management needs. In addition, we also underpin the broader UAE economy through the supportive financing of national housing loans and the development of large commercial real estate projects.

How well protected is the real estate sector following the global financial crisis?

We witnessed a degree of instability within the real estate market from about 2008 to 2011. The market, however, has clearly rebounded on the back of its core fundamentals. Moreover, the regulators have taken solid steps toward ensuring there are no repeat bubbles in the future. As a result, the real estate industry is now on a solid and sustainable growth trajectory. Transaction numbers are on the rise as the markets stabilize, and the country is once again attracting investment in this sector. And though new projects are being launched similar to before, the primary demand today is coming from the end user, which is a great sign and will ensure future stability and sustainability.

What is the significance of Dubai’s successful bid for Expo 2020?

EXPO 2020 will attract local and international investment, both financial and intellectual, in the fields of finance, services, infrastructure, transportation and logistics, tourism, hospitality, digital technologies, the media, and energy and alternative energy to name a few, leading to significant innovation in the Emirate. The above will have a domino effect on trade, investment, technology, construction, and other related sectors, not just in Dubai, but in the UAE as a whole. The Bank of America Merrill Lynch estimates that the Expo could boost GDP by $23 billion, or 24.4%, over 2015-21. There is also the expectation of new job creation of around 300,000 during the period, particularly in the area of construction, hospitality, transportation, logistics, retail, and services. Dubai’s infrastructure will get a further boost, including schools, universities, medical clinics, hospitals, roads, ports, and airports. Finally, the brand value of Dubai is expected to grow by $8 billion to $57 billion, according to Brand Finance.

What is your outlook for the development of the financial services sector in the UAE?

I think the finance sector within the UAE, thanks to the UAE Central Bank and the authorities, has become highly resilient. All banks have weathered the storm quite well, making sure that prudence has a central seat at the table, along with a strengthening of the risk management framework and surrounding corporate governance and compliance infrastructure. The future now looks very positive as the upbeat nature of the economy foretells, and the banks will be a key beneficiary of this growth momentum. All the banks in the country have weathered the crisis well, thanks to the timely and decisive steps taken by the government and the regulators in early stages, which has put the financial sector on a robust and sound growth platform in this booming economic environment.

© The Business Year – February 2014



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