“Is­lamic bank­ing is on a steady growth path.”

An ex­clu­sive In­ter­view with Ahmed Khizer Khan, Pres­i­dent & CEO, Burj Bank Lim­ited

Southasia - - Contents -

Ahmed Khizer Khan, Pres­i­dent & CEO, Burj Bank talks about the growth of Is­lamic bank­ing.

What is the con­cept be­hind the Burj Bank slo­gan ‘Shariat Mein Barkat’

Our slo­gan ex­presses the pure na­ture of our busi­ness and we want to com­mu­ni­cate the same through our slo­gan. We be­lieve that Shari’ah leads to the blessed path of success and that is ex­actly what ‘Shariat Mein Barkat’ means. Where does Burj Bank trace its roots as an Is­lamic Bank?

Burj Bank has a rich Mid­dle East­ern back­ground with the fi­nan­cial and tech­ni­cal sup­port of a great in­sti­tu­tion, ICD Jed­dah (Is­lamic Cor­po­ra­tion for Devel­op­ment of the Pri­vate Sec­tor) which is the pri­vate sec­tor arm of Is­lamic Devel­op­ment Bank, Jed­dah. ICD is work­ing for eco­nomic devel­op­ment and so­cial progress in var­i­ous Mus­lim coun­tries by in­vest­ing in the pri­vate sec­tor. Other ma­jor share­hold­ers in­clude Bank Al-Khair from Bahrain, Gar­gash En­ter­prises from the UAE and Al-Ro­maizan from Saudi Arabia. This strong back­ground gives Burj Bank ex­cep­tional fi­nan­cial strength and ab­so­lute cred­i­bil­ity. What ad­van­tages does an Is­lamic bank have in Pak­istan?

In Pak­istan, Is­lamic bank­ing pen­e­tra­tion stands at about 8 %. Be­ing the 6th most pop­u­lous coun­try, Pak­istan is now the sec­ond largest Is­lamic na­tion in the world, with over 180 mil­lion peo­ple and con­tin­ues to grow rapidly. Till date the bank­ing sec­tor has only been able to tap roughly 20 mil­lion cus­tomers. Ac­cord­ing to our anal­y­sis an un­tapped bank­ing mar­ket of over 40 mil­lion cus­tomers still ex­ists within the coun­try. Is­lam is the pre­dom­i­nant re­li­gion in Pak­istan and Shari’ah­com­pli­ant Bank­ing as of to­day has a very small mar­ket share, thus re­flect­ing a huge po­ten­tial for growth in this sec­tor. Is­lamic banks, hav­ing carved out a niche in Pak­istan, should now be given greater sup­port and en­cour­age­ment by the reg­u­la­tory au­thor­i­ties to op­er­ate on a stan­dalone ba­sis. Full fledged Is­lamic banks are still in the process of build­ing their cap­i­tal base, which is im­per­a­tive for growth in a post -Basel III world. This will even out the com­pe­ti­tion in the in­dus­try and be ben­e­fi­cial for the con­sumers at large. What are the chal­lenges to Is­lamic fi­nance thriv­ing in Pak­istan?

Is­lamic Bank­ing is based on the prin­ci­ples of Is­lamic fi­nance and peo­ple have very lit­tle knowl­edge about th­ese prin­ci­ples. This in it­self gives rise to a num­ber of chal­lenges, for in­stance, es­tab­lish­ing cred­i­bil­ity and spread­ing aware­ness. Ca­pac­ity build­ing is an­other ma­jor chal­lenge. Con­ven­tional bank­ing is be­ing taught in numer­ous univer­si­ties whereas very few in­sti­tu­tions are of­fer­ing for­mal­ized ed­u­ca­tion in Is­lamic Bank­ing, thus pro­duc­tion of qual­ity hu­man cap­i­tal is an­other chal­lenge for our grow­ing sec­tor. Though it is true that greater aware­ness of the in­built strengths of Is­lamic fi­nance has contributed to­wards in­creased in­ter­na­tional par­tic­i­pa­tion in Is­lamic fi­nan­cial mar­kets, aware­ness alone is not suf­fi­cient to en­sure sus­tain­able growth for our in­dus­try in Pak­istan and be­yond. To re­main com­pet­i­tive we have to con­tin­u­ally in­no­vate and adapt. If we are to chal­lenge the con­ven­tional banks’ en­trenched po­si­tion in in­ter­na­tional and lo­cal fi­nan­cial deals, we must de­velop the ca­pac­ity to struc­ture multi-cur­rency and cross-bor­der trans­ac­tions and build scale. As Is­lamic bank­ing grows in Pak­istan, what will dif­fer­en­ti­ate Burj Bank?

Burj is the only Is­lamic Bank in Pak­istan with a Sharia’h Qual­ity Rat­ing of AA (Dou­ble A) af­firmed by the Is­lamic In­ter­na­tional Rat­ing Agency – Bahrain (IIRA). The rat­ing sig­ni­fies that Burj con­forms to very high stan­dards of Shari’ah com­pli­ance. Be­sides de­liv­er­ing the high­est stan­dards in Shari’ah com­pli­ance, our pri­mary dif­fer­en­tia­tor will be the qual­ity of our cus­tomer ser­vice. We aim to be the unique Is­lamic Bank that of­fers the ser­vice stan­dards of in­ter­na­tional stan­dards while guid­ing our cus­tomers to the blessed path of success. Our cus­tomer ser­vice is at par with the lead­ing banks of the world. The new look and feel of our branches has com­pletely trans­formed the cus­tomers ex­pe­ri­ence and the per­cep­tion of Is­lamic Bank­ing in the coun­try to a pro­gres­sive alternative to the con­ven­tional bank­ing sys­tem. Se­condly, we take pride in be­ing the first Is­lamic Bank of Pak­istan that ag­gres­sively took up the chal­lenge of spread­ing aware­ness of Is­lamic Fi­nance and Bank­ing. I can proudly say that our mar­ket­ing ef­forts in­formed the cus­tomers of the ser­vices that an Is­lamic bank of­fers

and how th­ese ser­vices are dif­fer­ent from con­ven­tional ones. In the next 5 years, Burj Bank will have over 300 branches as well as an es­tab­lished non-brick and mor­tar bank­ing model in place, emerg­ing as one of the most im­por­tant play­ers in the Bank­ing sec­tor of Pak­istan. How do you rate Burj Bank’s progress so far?

I can proudly say that with the help of Almighty Al­lah, we have man­aged to get our­selves rec­og­nized as the fastest grow­ing fi­nan­cial in­sti­tu­tion in this coun­try. To­day our com­pany’s vi­sion of be­com­ing the Is­lamic Bank of Choice seems ap­proach­able. Our core brand val­ues of “Pu­rity”, “In­tegrity”, “Pas­sion” and “De­vo­tion” are be­ing lived out by the peo­ple run­ning the com­pany, demon­strat­ing in their per­sonal and busi­ness lives that they pas­sion­ately be­lieve in th­ese val­ues.

The list of our achieve­ments in 2012 is never end­ing. In just 12 months, we grew our de­posit base by 80 per­cent. Our fi­nanc­ing port­fo­lio also grew by 80 per­cent. We suc­cess­fully con­verted a loss-mak­ing busi­ness into a highly prof­itable ven­ture. Our branches have grown from 50 to 75. Within our Re­tail Bank­ing arm, we have suc­cess­fully in­ducted a strong BDO Chan­nel, we have con­verted our car fi­nanc­ing fa­cil­ity (Carsaaz) into a mar­ket leader and es­tab­lished our SME and Taka­ful busi­ness. We have strength­ened our hu­man cap­i­tal and we are all set to launch Pri­or­ity and Home Musharaka (fi­nanc­ing) propo­si­tions. Within our Cor­po­rate Bank­ing di­vi­sion, we have added a rich port­fo­lio of top Cor­po­rates and started ded­i­cated cor­po­rate branches, nearly dou­bling our as­set book. We have launched the first Is­lamic Debit MasterCard of Pak­istan and our brand has evolved into one of the strong­est con­sumer brands in the coun­try. Hence, we faced mul­ti­ple chal­lenges in the be­gin­ning but, I can proudly say that we rose from th­ese chal­lenges with dis­tinc­tion. Cur­rently, what are your most pop­u­lar ser­vices?

Burj Bank of­fers a di­verse range of prod­ucts and ser­vices to its cus­tomers. We have launched dif­fer­en­ti­ated prod­ucts and ser­vices in ev­ery cat­e­gory. We launched con­sumer fi­nanc­ing last year and Burj Carsaaz (auto fi­nanc­ing) has al­ready be­come the fastest grow­ing con­sumer fi­nanc­ing prod­uct in the mar­ket. The Cor­po­rate prod­uct menu is also very com­pre­hen­sive and in­cludes tra­di­tional Murabaha, Mu­darba, Is­tisna, Ijarah fi­nanc­ing and di­min­ish­ing Musharaka. We have an en­hanced prod­uct menu in terms of re­tail bank­ing, Con­sumer Fi­nanc­ing, SME Bank­ing, trade fi­nanc­ing. Can you share Burj Bank’s con­tri­bu­tion to­wards CSR (Cor­po­rate So­cial Re­spon­si­bil­ity)?

Cor­po­rate So­cial Re­spon­si­bil­ity is at the heart of our busi­ness and we be­lieve that giv­ing back to the com­mu­nity and this coun­try is just as im­por­tant as our Core Brand Val­ues. We un­der­stand the re­spon­si­bil­i­ties of be­ing a cor­po­rate cit­i­zen and value the im­por­tance of the ac­tiv­i­ties done un­der CSR. Burj Bank Lim­ited has been able to seam­lessly in­te­grate the so­cial, eth­i­cal and en­vi­ron­men­tal con­cerns of the so­ci­ety in its busi­ness model. It has proac­tively par­tic­i­pated in com­mu­nity well-be­ing and growth ef­forts, with its em­ploy­ees con­tribut­ing to var­i­ous phil­an­thropic ini­tia­tives un­der the aegis of the Burj Char­ity Com­mit­tee. Rec­og­niz­ing ev­ery Burj Bank em­ployee as a pow­er­ful agent of pos­i­tive change, we re­cently launched an em­ployee-driven CSR ini­tia­tive - “Giv­ing Be­yond the Work­place Cam­paign”. Un­der this ini­tia­tive we car­ried out a num­ber of ac­tiv­i­ties that in­volved spend­ing qual­ity time and din­ing with the beau­ti­ful chil­dren at the Edhi or­phan­age and dis­tribut­ing clothes and house­hold items to the chil­dren at the SOS vil­lage. Re­cently we also hosted an event where we dis­trib­uted do­na­tion to the fam­i­lies of the vic­tims of the Bal­dia Town fire in­ci­dent. We are work­ing on a va­ri­ety of new ini­tia­tives for 2013 and will dis­close the de­tails very soon. What are Burj Bank’s ini­tia­tives for 2013?

Dur­ing the year 2012, we ex­panded our branch net­work from 50 branches to 75 branches. Apart from adding 25 branches, we also re­lo­cated some of our branches to more prom­i­nent and ac­ces­si­ble lo­ca­tions to in­crease outreach. With the ob­jec­tive of fur­ther in­creas­ing our foot­print in the coun­try, we plan to add an­other 25 branches to our net­work in 2013 bring­ing it to 100 branches. We also plan to in­tro­duce new li­a­bil­ity prod­ucts fo­cus­ing on se­nior ci­ti­zens, chil­dren and salaried in­di­vid­u­als. We will be ven­tur­ing into the home re­mit­tance busi­ness as well and are also plan­ning to ex­pand our con­sumer prod­uct port­fo­lio and form strate­gic al­liances with renowned brands to fa­cil­i­tate our cus­tomers. We have re­cently launched Pak­istan’s first Is­lamic Debit MasterCard, and will be launch­ing Pri­or­ity Bank­ing along with many new prod­ucts for our Alternative Distri­bu­tion Chan­nels.

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