Salah Mohammed Jaidah, Chief Executive Officer of QIB
Qatar Islamic Bank is the first Islamic bank in Qatar, established in 1982 much before Islamic Finance acquired its present popularity.
Now with all the banks opening Islamic banking Services, the competition seems to be building, but QIB is on firm footing believes Salah Mohammed Jaidah, Chief Executive Officer of QIB.
A business administration graduate from Texas University, Al Jaidah has 17 years of experience in banking.
QIB is now going global taking its Islamic banking expertise with it.
With his extensive experience in banking, Al Jaidah talks about his personal goals and aspirations for the company and reveals his secret formula for success.
|q|What kind of a management style do you believe in? Boss-centric or employee-centric? Are you inspired by any management guru?
|a|I believe in team spirit. I believe that every member of the organisation has an add value to the bottom figure, which is the profitability, image and the performance of the company.
In that style, I feel that everyone is responsible for his actions and the impact of these actions on the company. This makes your employees more responsible for each of their activities within the organisation. I am inspired by a lot of people.
For leadership I am inspired by our Leader, HH Sheikh Hamad bin Khalifa Al Thani. To me his leadership style, since he has taken leadership and how it has reflected on the country – its image, is a real inspiration.
The way he has enhanced the morale of the new generation in participating in the success of the country, is indeed a motivation.
For business principles, it’s my late father who is my inspiration. On how to select the right partners, how to get to know your competitors and how to deal with them in work, it’s to his advice that I always fall back on.
I learned about his principles during his days of being a business man in Qatar.In banking I was inspired by Tim Munun, who led Commercialbank from the year 1998 till 2003, when he passed away.
His style of managing financial institutions has inspired me, and helped me to deal with problems occurring in a banking organisation. In banking the most critical issue is how to make the right decision, at the right time and once in a while be prompt and act in such a way so that you don’t harm your clients.
Fluctuations in the market and change happen so rapidly, you have to analyse the market carefully and take decisions accordingly.
From Munun, I learnt to take it easy initially, evaluate, re-evaluate and then make a good exist strategy.
Overreacting, panicking, aggressively making quick decisions might affect us in a crisis. In business, quick decisions and taking risks always helps. But not so in banking. The way I manage my banking is influenced by the principles of all these motivating people in my life.
|q|How do you build team motivation/ improve morale of team players?
|a|I think counting on the employees as part of the team immediately boosts the morale of the team players.
‘With you I am there and without you I am not’ is the policy that I remind my co-workers and that immediately gets them more involved in their work and they treat the company as their own and work with more involvement.
|q|To what level should authority be delegated?
|a|Authority is never given; it is taken, based on the qualifications. If you have a qualified team they will take authority, implement it and take responsibility for it.
|q|Where do you draw the line in discussions, while taking vital decisions?
|a|It is ideal to share opinions before taking decisions. But your mindset should not deal with only this possibility, it should be open and it should evaluate the situation, take your committees consideration into account but eventually base the decision on your gut feeling after analysing it.
The clients, the shareholders and the regulators all should be taken into consideration before taking a decision, without affecting one over the other.
It is best to get the feel from the management and then act according to it.
|q|As a listed company, how do you view your responsibility to your shareholders? What would you tell them, especially given the recent market fluctuations?
|a|The shareholders come after the customers. The survival of organisations depends on customer satisfaction. Ultimately the owners of the company, it makes sure that they are there to cater to the customers needs. Discipline too is very important in building up any business.
You can view this as a triangle or a tripod resting on three legs, the customers, the shareholders and the authority, which could be the Shariah or the QCB and in the centre is the employee or the team who too has a huge say in the success of the company.
Recently, the shareholders have given the authority to the board to raise the equity by right issue and they gave them the authority to verify the price and the time.
Now with that authority, the board had the flexibility to decide the direction that they should take and they immediately assigned it to an external consultant to recommend a price.
And the price that came up was QR120. Now when the market started to diversify against the share, they decided against the price even though it was recommended by experts and came up with QR70 and that really re-boosted the position on the share.
That gives you a feel of the board and how it works to protect the shareholders and we as the management advice the board and guide them in their decisions.
The board does take all the shareholders view into consideration and filter them and then try to implement the feasible ideas.
|q|What do you think about the Islamic Banking trend that is fast gaining popularity?
|a|Islamic banking in the modern banking world has changed dramatically. In the past, they were going through the challenge of promoting and convincing.
The convincing is there, structuring is taking an interesting momentum, now is the challenge of answering the question, ‘How are you in comparison to conventional banking?’
In the beginning it was just a question of pricing, now we have come a long way from that. The structure mechanism, the sharing of the risk mechanism and the ability to be more innovative and also the competitive pricing has made Islamic banking very lucrative.
For example, we have Istisna, which is project financing. Under this facility, the Bank shall purchase the ownership to the asset being constructed from the customer by notating the construction contract between the customer and his contractor/supplier.
Subsequently the bank shall immediately sell back the ownership of the said uncompleted asset, also under the concept of Istisna’ to the customer at a selling price which comprises the cost of the asset to the Bank plus a margin of profit to the bank.
We are now competitive to conventional bank. This is not new, but it is new to Qatar. We are so much innovative in investment banking too; these solutions have created an additional appetite.
Now when we go in for corporate clients, we don’t feel that we cannot fit into their requirement. We are now ready to fit into any prerequisite of the client.
|q|What do you have to say to other conventional banks following your example?
|a|Good Luck to them! We are the leading innovator in Islamic banking, since we were here for long and have many products which are very popular.
Our operations are more mature; we are more into corporate structure finance and trade. And capitalising on these advantages will be our focus.
We used to be on the top10 in terms of equity size, until we drifted away, but I assure you we will soon catch up there, and there is taking our products worldwide, which is also important for us.
Our innovations will also be only in compliance to the Shariah rules. So keeping the discipline in mind, we will bring out more innovative products.
|q|How are you addressing the task of going up the value chain, to bring global recognition to your product or service?
|a|We have come out with different business options; we are venturing into the international markets by going with partners, since we don’t have sufficient capitals to venture outside.
Consequently, the beginning of 2004 witnessed the inauguration of Arab Finance House in Lebanon to meet the need for Islamic banking services and Islamic Investment portfolio; Capitalised by $100 million, Arab Finance House is heading as new player in the market.
Diversification in the centre of the objectives inspired courageous entering the insurance market and resulted in establishing Solidarity Insurance Company in Bahrain with a capital of $300 million marking the first company that offers Islamic Insurance.
QIB enjoys equity participation in some other successful enterprises and holds 30 percent of Gulf Finance House in Bahrain.
QIB is all set to start operating an Asian Finance Bank in Malaysia and finalise necessary procedures for establishing a European Finance House.
QIB will represent 70 percent of shareholders will be a full fledged Islamic bank dedicated specifically to the Malaysian market, but opportunities available in the neighboring countries, such as Singapore, Indonesia and Brunei would also be explored.
The Asian Finance Bank will have its client base and would provide consumer, corporate and investment banking, the European Finance House will provide a purely investment banking and operate as a services provider for financial institutions in the region.
The European Finance House to be based in London is to provide the advantages of Islamic structure of products and is to be dedicated to the money market for Islamic financial institutions.
It will also be operating as trade financer and trade related support. For financial institutions intended to trade in the European market. European Finance House would eventually create alliances with leading European banks, thus providing an Islamic structure unit to serve their Islamic client base.
We are looking at opportunities in Africa. We have not yet specified areas of concern. We believe that Malaysia is the hub of Far East for Islamic Bank. Hence we are focusing on this market, from Indonesia, Brunei etc. Lebanon, we are looking into and hopefully Syria and all we can handle from Lebanon.
Locally, QIB will see radical changes in 2006 with the effectuation of the new restructuring scheme, the branch network expansion with inauguration of three new branches in vital locations and the launch of new e-banking services, new retail and corporate banking and financing products.
Qatar Islamic Bank (QIB) and Gulf Finance House (GFH) will be opening a new Islamic investment bank- Qatar Finance House – being set up at the Qatar Financial Centre.
The new bank is the first Islamic bank dedicated to investment banking in Qatar and the first of its type to apply for a banking license at the QFC. The bank will have an authorised capital of $1 billion and paid up capital of $500 million, with QIB and GFH each owning 15 percent of the new bank.
|q|Do you feel there has to be easier movement of labour, to increase productivity and competitiveness?
|a|Definitely we do try to enforce Qatarisation, But we should have good training centres so that they apt in these areas too.
But with the growth of the company, we will need to have people with more experience in this field, some specialities. Hence yes, we would encourage easier movement of labour.
|q|How has the company’s success changed your life?
|a|We have an entirely different organisational structure. We have a different culture now, there is openness, there is dynamism in the field, sharing of opinions, recommendations of change are being looked into, and there are evaluations and promotions. You have to be very dynamic in the banking sector these days.
The vision from the chairman is the re-polishing of the image of the company, on the customer service sector. Making solutions and having long term relationship transactions with our clients are what we are looking at. We are building relations not just profits.
Being exposed to Islamic banking regulations in Malaysia and also in Lebanon has also given QIB a bigger opening. Even our Shariah board has allowed this challenge to come on board and given us a chance to re-evaluate them. Islamic banking market is in a very fast track of reenergising itself and meeting the expectation of its clients.
It is more energetic now. Islamic Intuitions represent around a $300 billion of investment, you will definitely see a trillion in the near future.
There will be a lot of conversions, definitely. There are the writers coming from Africa for huge Sukuok transactions. When you see that kind of behaviour, you are encouraged by the enthusiasm.
Now there are 250 Islamic banks, there wouldn’t be a huge increase in numbers but the amounts will be increasing.
Growth in the asset base is what I foresee. We will need bigger banks. Around four to five big Islamic banks, 15 medium sized banks that would be an ideal structure.
After seventeen years as a conventional banker I changed to Islamic bank, believing that there was an opportunity for change. In the beginning I could not identify the change. But it was soon revealed to be a more dynamic form of banking.
People believe that banks should minimise risks while maximising profits. I don’t understand how both can be done together?
In Islamic banking there is the scope of venturing with all due diligence and we jump into it and take the challenge. There is the scope of venturing, which we use it to our gain.
All in all, we are doing Ethical banking. London has given us an assurance; granted permission for London being the Islamic Banking region of Europe.
That gives you a commitment, an image for further developing Islamic banking. Within the frames of discipline we venturing out and exploring new vistas.
The horizons are broader now for Islamic Banking. It has changed the way we are doing business. We are developing three banks, three entirely new ones, not buying sick banks and reengineering it. It is an exciting opportunity. All this has changed my perspective too of the business of banking.
|q|How do you unwind/relax after a hard day’s work?
|a|I have a dhow. I am constantly maintaining and fixing it. It is a traditional wooden old boat. I think I am mostly a sea guy. I do gardening too and I enjoy growing plants. I have a small farm and enjoy being there during the winter. I enjoy travelling too and I love what you learn from these trips.
Unfortunately I don’t read other than what I need to read, for work. There is so much to read even otherwise, so I don’t get the time to simply read for pleasure. I need to do that, though.
|q|Do you carry your work home? Or do you switch off your mobile and work tempo when you get home?
|a|I do carry few files that need a little bit more concentration and I enjoy reading them. I check the mail but only for an hour. But I do enforce the discipline of a weekend. I try switching off.
This article is reproduced with special permission from Qatar Today - Qatar's only news, business and lifestyle magazine
