MANAMA: Bahrain-based global Islamic banking major, Al Baraka Islamic Banking Group (ABG), is upbeat on sustaining growth patterns as well as executing its expansion plans in 2017 and beyond.
Mr. Adnan Ahmed Yousif, the President and the Chief Executive of ABG in an exclusive interview told The24X7News Bahrain (www.twentyfoursevennews.com) said that despite challenging economic climate, the ABG’s core strategy would help for sustaining its growth in all markets where the Group operates in 2017.
The interview video with the ABG President and Chief Executive can be watched here at which is the first its of exclusive stories started by The24X7News Bahrain as part of its strategy aiming at enhancing the scope of all social media channels for the readers including the video.
Following is the detailed Q&A with Mr. Adnan Ahmed Yousif:
Question: Despite challenging economic and business climate in 2016, Al Baraka Group has navigated through in almost all markets where it operates. Just give us a sense, how the 2017 is taking shape in terms of opportunities, challenges and business outlook for your Group?
Mr. Adnan: We will continue our strategy of growth through increasing market share and expanding into new markets. Our units will continue to emphasise on product innovation and excellence in service through increased focus on customer centricity. Notably, we will seek to make digital banking a competitive advantage and have started to work with our subsidiary banks to advance further in this direction. 2017 will be another challenging year in our markets especially due to issues of currency fluctuation and security tensions. Correspondingly, we are expanding carefully, with great emphasis on managing costs and strengthening our operating units. Overall, this will further strengthen the Al Baraka Group. Our Group has a culture of balanced and cautious approach to asset management.
Q: 2: There has been emphasis on the Group’s ambitious expansion plans across many geographic destinations and how many branches will be added in 2017?
Mr. Adnan: As mentioned above, we will continue our strategy of growth through increasing market share and expansion into new markets. Our units will continue to look for business opportunities for expansion. We are today operating over 700 branches worldwide.
Q: 3: What is the global outlook for the Islamic finance as an industry? What do you expect from this industry in 2017 and beyond in terms of sustaining the growth patterns?
Mr. Adnan: There are several factors pointing to a better growth scenario for Islamic banking presently. Signs of revival of the global economy, which reflect a good possibility of global acceleration in the growth in banking sector in general, is one important factor.
The world’s Muslim population is expected to increase by at least two percent per annum, which will be reflected in the growth of Islamic banks’ potential clientele.
Another factor that needs to be kept in mind while assessing the future growth of Islamic banking is the unused Islamic banking potential in the countries with a large proportion of Muslims.
The industry’s ability to absorb the shocks of financial crises in sharp contrast to conventional institutions, has attracted remarkable attention, including from non-core markets of Europe, Asia and North America. Therefore, we can say the most notable achievement made in the global Islamic banking and finance industry over the last 2 decades is that the industry is truly globalizing, that is, spreading as a universal alternative to conventional finance and banking system worldwide. One of the challenges the Islamic banking faces is creating enough awareness amongst Muslim and non-Muslim customers, potential customers and bank staff.
Q: 4: Islamic banks are still very small in terms of size when compared with the conventional peers, what is your take on consolidation and merger and acquisition for creating well capitalized entities?
Mr. Adnan: We expect the number of mergers and acquisitions in Islamic banking to increase from this year onwards as consolidation in the financial services and insurance industries is a key trend. While this will strengthen the growth in these sectors, escalating competition from the rest of the world implies that Islamic banks should enhance their capabilities.
With regards to consolidation, the historical fragmentation of several industries – most notably banking and insurance – has tended to hamper growth opportunities, particularly when combined with the constraints set by the small population base in some countries, especially in the Gulf. Over the past few years, new pressures have been added by the gradual globalization of Islamic banking, which means that the regional competitive advantage in the financial services industry has be reduced. These factors, added to the need for scale in order to keep up with regional rivals, will in my view, prompt a rise in the number of Islamic banking mergers and acquisitions.
