Group CEO of Qatar Islamic Bank, Bassel Gamal
Mr. Bassel Gamal, QIB’s Group CEO, gave an interview to Forbes Middle East magazine. Featured on the cover page, where he shed light on QIB’s development and growth achieved despite the COVID-19 challenges. He stated that the great success the Bank has achieved on the level of digitizing its products and services was only realized thanks to the complete dedication of the Bank’s employees and to the continuous support of the Board of Directors.
Below is Forbes interview:
Globally, the $2.2 trillion Islamic banking industry seems to be facing up to economic challenges, with S&P Global Ratings predicting that it could grow 12% in the next two years. However, Bassel Gamal, Group CEO of the Qatar Islamic Bank (QIB), believes it must still fight a key battle—that of public perception. Many people in some key markets still think Islamic banking is only for those interested in Sharia-compliant products. “That’s a very limited way of looking at things,” says Bassel. And growing market share means changing that misconception. “You have to invest in people; you have to invest in technologies,” says the Group CEO. “You have to invest in building relationships with the clients.”
QIB approach is to deliver results. The Doha-based bank has delivered eight straight years of growth, with its profits and customer base more than doubling in that time. QIB, founded in 1982, currently has a 42% share of Qatar’s Islamic banking sector and a 12% slice of the crowded domestic banking sector overall. It had $47.9 billion in assets and a total income of $2.2 billion in 2020, making it the second-largest player in Qatar and the GCC’s fourth-largest Islamic lender by total assets. It also posted more positive earnings in Q1 2021.
It even recorded a positive performance while operating in challenging conditions. Facing turmoil from the COVID-19 pandemic, the bank doubled its provisions in 2020 to cover anticipated losses but still recorded slight growth. Its profits rose nearly 1.3% reaching $831 million, but key industry counterparts delivered mixed results.
QIB displayed good resilience to the economic shock in Qatar in 2020, says Mohamed Damak, senior director of financial institutions ratings at S&P Global Ratings. Looking ahead, Damak expects QIB’s asset-quality indicators to deteriorate only slightly, with non-performing financings reaching about 3% of total financings by the end of 2022, compared to 1.4% last year. He believes QIB’s capitalization will continue to support its credit profile. “QIB will continue to enjoy a robust franchise in Qatar with manageable exposures to external risks in its funding profile,” he says.
QIB has followed a conservative lending approach over the years. The strategy has helped insulate it from significant economic pressure on various sectors in Qatar. The pandemic came after the country had already adjusted to a regional blockade that began in 2017, forcing its businesses to adapt to a difficult operating environment. While that has now been lifted, QIB is continuing its conservative approach in 2021 amidst ongoing fallout from the pandemic, having more than doubled provisions in Q1 2021 compared to last year.
It also helps that QIB has modernized its business in recent years, overseeing consistent investments in technology and online banking capabilities. QIB has steadily introduced new digital banking services, from instant personal financing on its mobile app to a digital wallet allowing instant transfers to other users. It was especially active last year, introducing a flurry of services helping retail and corporate customers to bank remotely.
Those moves appear to be making an impact. Majority of customers opened new accounts last year through mobile banking, while April 2021 saw roughly half of QIB’s personal financing sales come through its App. The bank has continued adding to its digital platform in 2021, including a new customer service chatbot and updates to its online corporate banking.
Group CEO expects customers to continue using digital services at higher rates and is planning more investment in this area.
He believes that industry has come a long way in the past decade. Simultaneously, it appears the drawdown of geopolitical tensions is opening doors. QIB is reviving old relationships with regional businesses and institutions that hadn’t been very active. In a positive sign, in January 2021, HSBC Bank Middle East completed its first Islamic trade facility in the region by linking up with QIB in a transaction valued at $100 million.
Bassel foresees expansion in QIB’s future, although he doesn’t provide specific details. The bank has focused on improving market share locally in recent years, but there’s a limit to QIB’s growth potential in Qatar. There are markets that we would like to enter once QIB can defend its position locally. “As long as it creates value,” he says.
The QIB’s Group CEO began his career at the Commercial International Bank in Egypt in 1990, where he stayed for over a decade.
In 2004 he moved to Doha, Qatar, to serve as Deputy CEO of Ahli Bank, in which Ahli United had a stake. By 2006 he was Ahli Bank’s CEO, a role he held until early 2009. He then returned to Bahrain, serving as Senior Deputy Group CEO of Ahli United’s banking group. But he’d grown fond of Qatar.
So, when QIB offered him a job, he accepted it, becoming Group CEO in early 2013, when QIB had about $20 billion in total assets, with profits of around $340 million. He joined as QIB’s board was eying larger changes.
The Bank managed to turn around the business and build a stable, modern institution. That included a push to upgrade services and improve operations through technology. “The bank was lagging behind in terms of investment in technology,” says Bassel. We quickly began addressing this. QIB launched a revamped our online channels within a few months as part of an overhaul of digital channels, which came after unveiling a new mobile app in early 2013.
Meanwhile, QIB remained active in financing projects and businesses. Internationally, it saw progress on restructuring and launched a new foreign branch in Sudan in 2013. The following year it had repositioned its UK arm to focus on private banking and real estate.
QIB delivered sustainable results, with QIB’s profits rising 7.6% in 2013, alongside an uptick in income. The next few years saw earnings only improve. On the technology front, QIB overhauled its core banking system across all business lines by 2016, which helped build a foundation for larger-scale plans around client-facing digital services.
Then 2017 brought with it some regional political tensions, which saw an outflow of non-domestic deposits in Qatar’s banks. However, the government stepped in, placing significant deposits to support sector liquidity, according to Fitch Ratings. QIB also tapped international debt capital markets through Sukuk program that year.
Throughout this, QIB’s earnings have kept trending up, and digital banking has remained a core strategy pillar. The lender began a new initiative in 2018 intended to upgrade the digital experience for customers and make services available around the clock. It even launched instant personal financing through its app, allowing eligible customers access to funds in a few clicks. According to QIB, it was the world’s first Islamic bank to offer this service.
This means that when COVID-19 arrived, QIB was operating on solid footing, underpinned by a technology platform capable of serving customers in a remote world. “We became a customer-centric bank,” says Bassel. “I think that was a key component in our ability to grow.” As the shackles of the pandemic slowly lift, the Group CEO will be hoping for more solid growth in the months to come.