Waheed Qaiser has been involved in a number of projects in Islamic banking and finance, the most notable being his pioneering role in setting up Islamic Bank of Britain, the first full-fledged Islamic bank set up in the United Kingdom. A busy traveler, he is rarely based in any single country, and spends time between the Middle East and London. A keen golfer, he prefers to spend time with his clients in on and off the golf courts around the world. ISFIRE caught him between his busy times in London and asked him about his professional and personal life. In the following is a summary of the conversation.
Q: What do you like to do in your free time?
I try and spend time with my small family who are based in London, play golf and meet with friends. At times, I undertake a bit of charity work. I like to spend more time in Medina, KSA. This is the only city that gives me so much comfort and I never want to leave that city.
Q: What are you currently reading?
Quran on the religious front and various trade publications on the civic side. Sir Allama Iqbal, Agatha Christie, Parveen Shakir, William Shakespeare, Stephen King and Horatio Alger are some of my favourite writers.
Q: For anyone looking to go into Islamic banking, what would your advice be?
My advice is that you must join a mega institution, no matter how little/much you get paid in the beginning. It’s important to get on board with the right Institution so that you get proper training. Sound beginning with the right Institution and in the right department is a key for nurturing a talented person. Moreover, I also tell them to talk to the people they can trust and they will certainly guide them in the best manner. I am always pushing for Islamic banking but unfortunately, Islamic banking has not taken off that well in UK or Europe. Somehow IB has landed on the laps of those who are not really doing justice to it and hence very dismal growth. New entrants to the Industry should not miss the opportunity if they are given a good opportunity in a conventional Institution.
Q: Most dearest possession?
My character, being straightforward and honest. This has cost me jobs and financial losses but that has not made me change my principles in life. Allah is the greatest and He has always blessed me with enough, Alhamdulillah.
Q: What is your greatest love?
This has broad meanings but my greatest love is to be attached to my Allah and follow His and that of His Prophet’s teachings. My Worldly love is to love every human being who is caring and loving irrespective of gender or race. But on the personal front, I have not been that lucky.
Q: What is it about Islamic banking that interests and inspires you?
Being a Muslim, it’s my duty to conduct my affairs in a manner that are in compliance with fiqh al-ibadat and fiqh al-muamlaat. Islamic finance involves a system of equity sharing and risk-taking and it relates to the whole vision of an Islamic economic system. Our religion wants the economy, its major monetary and business dealings, to move away from a debt-based system to an equity-based and stake-taking relationship. I call Islamic banking and finance an ethical system that plays a key role in conducting our financial affairs. The ethical and social dimensions are crucial to all economic activities. Islam teaches us morality and modesty and this is one of the key features in the practice of Islamic finance.
My main objective for money is to fulfil my basic needs and use and share the excess in a way that is directed by the religion. Unfortunately in today’s material life the money has been commoditized which is not correct. Money has no intrinsic value except being a medium of exchange.
If my action is not for the benefit of my family, myself, society and humanity then I have failed in my duty to utilize the financial resources vested to me.
The practice of ethics and morals within and outside Islamic banking go much beyond its name. It has to pave the way to the establishment of a just, honorable, sustainable society otherwise it will result in exploitation, moral degeneration, social tensions and inequalities as we have seen in the other system.
Islamic banking is entrepreneurial and I have always been a risk-taker in my life. The financial resources should not be directed just towards financial expansion but also towards the physical expansion of economic production and services for the good of the society and this is what inspires me. In the Islamic economy, the concept of money is expected to finance talent, innovation and new ideas, skills and opportunities. It is supposed to consider and finance constructive projects and ideas that have intrinsic value. Unfortunately, some of the so-called Islamic banks are still stuck on old conventional values and systems
of financial collateral or financial strength and the market standing of the customers, rather than looking at the entrepreneurial spirit of the innovators and supporting their viable projects thus confirming the true spirit of Islamic finance. and the team in promoting the message of Islamic finance from this platform along with Shari’a Scholars like Sheikhs Taqi Usmani and Nizam Yaquby who came out to support me in public gatherings. After Duncan’s departure, I took the reins at IIBU. It was during my time at IIBU when the Bank of England set up a working party along with key professionals including Mr Andrew Buxton and Lord Edward George. This working party brought aconstitutional amendment to abolish double stamp duty for Islamic mortgages. This was a historical achievement for all the promoters of Islamic finance.
Q: You have worked in a number of financial institutions. Tell us about your experiences at Citibank, UBS, HSBC, United Bank of Kuwait and Islamic Bank of Britain? Where did you feel you grew the most? Which one was the most challenging? What did you learn from each?
I started my career with Citibank UAE where I held various management positions in operations, branch and regional management and later at other regional markets for overseas investments as well. Citibank undoubtedly provided me an efficient training platform where I was also assigned a special additional task of tutor. In each institution I learned a lot and developed myself as a complete banker both on conventional banking as well as Islamic banking. The most challenging job was to turn around the operations that did not do well and I managed to turn them into profitable businesses in less than a year. This came with lot of hard work, planning and focus.
Q: We have heard that you have been appointed as the CEO and Chairman for a bank in a European country. Details remain vague so we were hoping you could tell us more about this enterprise and your role in it? Is this Maxim Corporate Finance LLP? If not, tell us more about Maxim Corporate Finance?
This is a personal initiative that I took after I resigned from Islamic Bank of Britain as I wanted to set up a bank with decent capital and a viable operating model. Unfortunately, the bank has not been licensed as yet and I am not sure if that will happen during my lifetime.
Q: What are your ambitions for Maxim Corporate Finance LLP?
Maxim Corporate Finance LLP is a corporate finance advisory and consulting boutique.
Q: Please take us through your career history and your journey to Islamic banking and finance. You are one of the founding members of the Bank of England working party for Islamic mortgages so please tell us about the constitutional change.
After leaving Citibank, I was keen to move into a business but my financial resources precluded me. During this period of wait, I was approached by UBK who were looking for someone who could come in and penetrate the core segment of the UK and overseas market for Islamic finance. My true conversion to Islamic banking was in January 1998 when I joined the first Islamic window of any conventional British bank that was headed by Duncan Smith at the time. It was quite a daunting task to go around the country and abroad to convince the clients of Shari’a compliance. There was only one thing on everyone’s mind “it’s only a change of name”. I must appreciate the efforts of Duncan Smith house with huge in-house professional talent. We are Nomad at ISDX and aim to operate with an open architecture to provide bespoke solutions to our clients from across the globe with no limit on size or segment. We would like to turn it into a full-fledged PE house in due course.
Q: How do you compare working in GCC with working in London?
It depends on various financial and non-financial factors but with the current challenges GCC, Asia and Africa offers much better prospects. So I am open to good opportunities where I can add value and earn my livelihood. UK offers you much wider range of opportunities as compared to the Gulf. GCC has its own charm of various advantages on commercial, social and cultural front. Moreover, it is closer to Makkah so it makes it a lot easier to perform Umra and Hajj.
Q: How does Islamic retail banking compare with the conventional sector? What are the positives and negatives of Islamic retail banking?
Size will continue to remain a critical aspect in taking Islamic retail banking to the next stage. Islamic retail banking will continue to suffer in the West unless we bring in the right management teams, good size capital, full range of products and services and innovative & customer-focused mindset. Islamic retail banking in Europe needs complete transformation and re-launch. I appreciate the efforts of all those involved in Islamic retail banking in UK but my message to them is that the journey needs to be redirected and redefined so that they can reap the true benefit of their hard work.
Q: As a “lead founder”, you were integral to the establishment of the first Islamic retail bank in the UK and in the West. Take us through the challenges you faced in bringing in an Islamic bank to a secular country?
It was a dream comes true when this opportunity came my way and I had no second thoughts. The journey was not easy as we had to build everything from scratch but it was fun and enjoyable. I used to rush to the office early and come late; there was nothing more important and thinkable in life than seeing the light of the first dedicated Islamic bank in UK. It was team effort and I must appreciate all the hard work by the team who were all equally excited and committed as the most valuable project of their lives. I must appreciate the positive mindset and full support of the UK government and the FSA in making it possible.
Q: How is Islamic retail banking competing with conventional banking? How is it differentiating itself? Is the proposition attractive to non-Muslims?
The acute shortage of financial and human resources has not really helped a good competitive environment for Islamic banking in UK. The propositions need to be made more attractive, easy to access and more importantly the pricing has to be competitive. I said it in my live TV interviews in 2004 at the launch of the bank and the first branch that we can only win customers and business if we are service oriented with competitive pricing. The retail bankers are working hard on it and I am sure they will be able to make a positive mark over time.
Q: Why has Islamic retail banking not taken off in the UK? What needs to be done to improve demand? Is there a supply problem?
The main focus has to be full serviced and competitive retail bank and customers will come to you. People are looking for peace of mind, convenience, and knowledgeable bankers that they can trust. Nobody has the time to go to three different banks to fulfil their banking needs. The customers normally get switched off when they hear bad service stories. Moreover, if the acceptable criteria of products and services are not in line with the market norms then this will have a negative impact.
Q: Affordability and social welfare is part of Islamic economic thought. However, many retail customers complain that Islamic banking products are more expensive. Why do you think this is the case, and what needs to be done to make the prices more competitive?
I think that used to be the case but most of the complaints on the pricing front have been addressed. In certain markets the pricing issue could be due to certain “risk weighting” or it could be due to individual bank practices to control their business segment. Frankly speaking, Islamic banking has to be better in pricing than conventional banks but the banks’ stakeholders will have to play a key role in putting this into practice. They can still make even more return on their equity if they employ the right management team who understands the true sentiments of the market and who can diversify the business to ensure that while offering the customers the best possible pricing the bottom line is not impacted negatively.
Q: Working in Europe, is there sufficient demand and appetite for Islamic finance products amongst the Europeans?
Most certainly; provided we undertake the proper R&D and offer the needed products with right pricing/incentives.
Q: Do you think Islamic banks should concentrate on investment banking or is there still enough potential in Islamic retail banking which has yet to be fully realised?
There has to be balance in retail, corporate and investment banking offering. This is very much accordingly to each market and the clients’ requirements. We cannot talk about purely investment banking products in sub-Sahara Africa today where the need is more on retail, SME and corporate banking. So its very much relevant to each market needs.
Q: Do you believe the current global Islamic financial practices reflect the true form of Islamic banking and finance? Is there too much of a concentration on debt finance products?
Most of the Islamic financial products are in accordance with Shari’a tenets where majority of the scholars are in agreement. In terms of debt finance products, they are driven by the market needs.
Q: Which countries do you see Islamic finance growing in over next few years?
Morocco, Libya, Indonesia, Ethiopia, Pakistan, Turkey, Saudi Arabia, Egypt and Bangladesh.
Q: Can Islamic finance take root in Europe? If so, what does the industry need to do to become more palatable to European clients?
Yes, it can grow tremendously if the following key areas are taken care of:
- Right operating model
- A management team that can understand Islamic finance and can inculcate confidence among customers
- Right size capital
- Competitive Pricing
Q: Economists and policymakers have differed as to how to solve the Euro crisis. What do you think about the current Euro crisis and what role, if any, can Islamic finance play in alleviating the problems?
I don’t think Islamic finance can play a significant role in resolving this challenge. Islamic finance must focus on its own challenges rather than entering into areas that are not relevant to its survival.
Q: Can you describe a recent project in Islamic finance that you have found innovative?
Various innovative initiatives are being taken across the globe so it will not be fair to praise one and ignore the others. The pressing issue on most commonly used “conventional bench-marking” still bothers many though.
Q: Who are the upcoming personalities and institutions that you think will take Islamic banking to the next level?
Royal families from UAE, Morocco and Saudi Arabia. But the commitment has to be solid and long-term. Short-term and short-cut will damage the industry as we have seen in UK. Moreover, I will also emphasize on very careful selection of the management team that can strengthen the concept and build up long-lasting market confidence.
Q: How do you see the future of Islamic banking in the West and globally? What are the challenges for Islamic finance?
I see a very bright future for Islamic finance in the West as well as the entire globe. We have to come out of our complacent approaches if we are to make an early and massive impact in the rising demand for Islamic banking. This is going to grow in a big way and I see conventional players and entrepreneurs from China, South Asia and the West investing into the Islamic banking infrastructure in a meaningful manner.
There are many challenges at present much more will emerge. Some of them that come to mind are:
- Broadening the skill base / human capital
- Diversifying assets
- Benchmarking
- Regulations and standardization
- International Islamic money market
- Market making
- Right-sizing the Institutions
- Governmental/regulatory support in facilitating changes in the regulations
- Risk of contagion
- Selection of appropriate management team
