Isfire Special Report

There are numerous award-issuing commercial and non-commercial organisations in Islamic banking and finance (IBF). The best examples of non-commercial Islamic finance awards are IDB Prize in Islamic Finance (offered by the Jeddah-based Islamic Development Bank) and the Royal Award for Islamic Finance (organised by Bank Negara Malaysia, Securities Commission Malaysia and the Malaysia International Islamic Financial Centre or MIFC). Numerous organisations administer IBF awards programme on a commercial basis, some of which are respected while others are considered as mere money-making tools. There are certain Islamic finance awards programmes that demand from the participating institutions hefty amounts of money to receive the awards. It is no wonder why some people deem such activity no more than buying and selling of trophies.

IBF is a growing industry and it is undoubtedly necessary to highlight best practices in the industry so that other players may attempt to emulate them to achieve the desired results for the benefit of the wider stakeholders. Awards do the job in this respect. They acknowledge contributions of individuals and institutions, and highlight star products. It is, nevertheless, absolutely imperative that such award programmes are transparent, authentic and most importantly are run by those who have full commitment to IBF. Running them on a purely commercial basis doesn’t help the industry as a whole and the individual winners at all. It is equally absurd to receive an IBF-related award from someone whose own knowledge of the industry is rudimentary and whose commitment to the industry needs to be re-ignited every now and then by flashing them the dollar bills.

Why Islamic Retail Banking Awards?

Admittedly, there were already a number of organisations offering awards and accolades in IBF when Islamic Retail Banking Awards (IRBA) were founded in Dubai in November 2015. The reason for starting IRBA was unambiguous: there was a need for setting up a non-commercial award programme in Islamic retail banking. Islamic Retail Banking Awards (IRBA) are managed by Cambridge IF Analytica. In a period of just three years, IRBA have emerged as the most authentic Islamic retail banking celebrations and acknowledgements platform in the world, primarily owing to the non-commercial approach adopted by the awards committee. Cambridge IF Analytica has run three editions of IRBA in Dubai since 2015.

These awards are based on a rigorous efficiency analysis conducted by the research team at Cambridge IF Analytica. The database includes over 150 Islamic banks from around the world out of which more than 130 Islamic retail banks are ranked in terms of their efficiency scores. From this list, winners in the category “Strongest Islamic Retail Banks” are chosen on national, regional and global levels. “This is due to the rigorous approach we have adopted to appraise and screen Islamic retail banks through a sorting mechanism based on efficiency. Unlike some other Islamic banking and finance awards programmes – which apply ad hoc approaches – we have adopted an objective methodology to ensure that our results are consistent and transparent,” said Dr Sofiza Azmi, CEO of Cambridge IF Analytica.

“The Islamic Retail Banking Awards (IRBA) are part of our advocacy efforts for Islamic banking and finance. We firmly believe that an objective assessment of Islamic retail banks by an external body like Cambridge IF Analytica will enhance productivity and efficiency of individual players,” she elobarated. Islamic retail banking is actually the queen of IBF. While a number of activities and sub-sectors play an important role in IBF, retail banking is the face of IBF. Therefore, making it absolutely imperative to acknowledge and celebrate success stories in Islamic retail banking.

3rd IRBA Held in Dubai

On November 14, 2017, in a colourful Awards Ceremony at JW Marriott Marquis Hotel Dubai; winners of the 3rd IRBA were announced. The Gala Dinner was attended by a large number of stakeholders in the global Islamic financial services industry; who came from Europe, Africa and Asia. “This is a fabulous event, efficiently organised, tastefully presented and above all providing extremely beneficial networking opportunity,” said Jamil Akhtar, CEO of Britnaire, a London-based property advisory firm offering services to high net worth individuals and families from the GCC.

Following is a brief summary of the awards and the winners.

Strongest Islamic Retail Banks (SIRBs)

The Islamic retail bank with the highest efficiency rank in the world is chosen as the Strongest Islamic Retail Bank (SIRB) in the World, which also receives accolades for being the Strongest Islamic Retail Bank in the region (e.g., Asia, Europe and Africa, etc.) as well as in the country in which it operates. For example, Al Rajhi Bank this year received 5 SIRB Awards. These awards included:

• Strongest Islamic Retail Bank in the World 2017

• Strongest Islamic Retail Bank in Asia 2017

• Strongest Islamic Retail Bank in the Middle East 2017

• Strongest Islamic Retail Bank in the GCC 2017

• Strongest Islamic Retail Bank in Saudi Arabia 2017

“Al Rajhi Bank of Saudi Arabia this year received 5 awards: Strongest Islamic Retail Bank in Saudi Arabia, Strongest Islamic Retail Bank in the GCC, Strongest Islamic Retail Bank in the Middle East, Strongest Islamic Retail Bank in Asia, and Strongest Islamic Retail Bank in the World.”

These awards were received by Majed Al Rajhi, Head of Retail Banking at Al Rajhi Bank. The success of Al Rajhi Bank owes to the vision and leadership of the Al Rajhi family but the top leadership of the bank also deserves special appreciation in this respect. Al Rajhi Bank is the largest Islamic bank in the world, barring the Iranian Islamic banks.

Commenting on the bank’s big win; Stefano Bertamini, CEO of Al Rajhi Bank said “Over the past two years, we have been executing a major transformation throughout the bank and we have already achieved great progress. This transformation has now become the basis for our strategy moving forward, which is called ‘ABCDE’. The strategy focuses on five key areas: the ‘A’ stands for accelerate growth; ‘B’ is to become employer of choice; ‘C’ stands for customer focus; ‘D’ is digital leadership; and ‘E’ is execution discipline. This strategy enabled us to outperform the industry in terms of both financial and non-financial metrics, which gives us confidence we are on the right track.”

Bank Syariah Mandiri (BSM) topped the efficiency ranking of all Islamic banks in Indonesia, and was chosen to receive two awards: [1] Strongest Islamic Retail Bank in Asia-Pacific 2017; and [2] Strongest Islamic Retail Bank in Indonesia 2017. These awards were celebrated by BSM through an extensive media campaign at home. The regulator – Otoritas Jasa Keuangan (OJK) or Indonesian Financial Services Authority – puts a huge value on IRBA and hence, such achievements go a long way to raise profiles of the winners.

IRBA’s SIRB Awards also bring out performances and achievements of many Islamic retail banks that otherwise may remain unnoticed in the global Islamic financial services industry. One such example is Islami Bank Bangladesh Limited (IBBL), which is a star Islamic retail bank in Bangladesh but is seldom mentioned in the international conferences on Islamic banking and finance. IRBA have highlighted the impressive performance of IBBL by presenting two SIRB Awards to it, each for two years in a row, namely, Strongest Islamic Retail Bank in South Asia, and Strongest Islamic Retail Bank in Bangladesh for the years 2016 and 2017.

Bosna Bank International (BBI) was named as the SIRB in Europe. As the bank is the only Islamic bank operating in Bosnia & Herzegovina, the Award Committee decided not to issue a country award in favour of BBI. Technically, however, BBI should also be acknowledged as the SIRB in Bosnia & Herzegovina.

In the country awards, the most prominent winner was Dubai Islamic Bank (DIB), which won the accolade for being SIRB in the UAE for the third consecutive year. Established in 1975, DIB is the largest Islamic bank in the UAE by assets and the fourth largest Islamic bank in the world. The Bank currently operates 90 branches across the UAE, is present in seven markets worldwide and is expanding its global footprint to further grow and develop the industry.

“We are delighted to be recognized as the ‘Strongest Islamic Retail Bank in the UAE’ for the third consecutive year. This award reinforces Dubai Islamic Bank’s leadership position as the ‘bank of choice’ across many of our consumer product offerings and distinguishes DIB’s ongoing dedication and efforts to drive the transformation of the Islamic finance market. Supported by our long history and expertise in driving growth within the retail banking sector, we remain committed to enhancing our customers’ banking experience by providing them with a unique combination of innovative products, unparalleled services and expert market knowledge. With customer centricity at the core of what we do, we will continue to focus on strengthening and establishing long term relationships with our customers while meeting their evolving banking needs,” said Sanjay Malhotra, Chief of Consumer Banking of DIB.

Similarly, Bank Nizwa was chosen as the SIRB in Oman for the second year in a row. The Bank achieved the highest growth rate in Oman’s banking sector reaching 200% after tax during first half of 2017. This milestone was achieved courtesy of a surge in total assets, which reached 613 million OMR at the end of June 2017 and a gross financing portfolio that grew to 485 Million OMR during the 1st half of the year. Bank Nizwa also recorded a 45% growth in assets and a 37% growth in revenue during the second quarter of 2017, driven by greater efficiency in asset quality and healthy activity across multiple businesses.

“From the onset, we have been committed to innovation and developing our product and service portfolio to always better serve our expanding customer base. Receiving this prestigious accolade highlights the success of our approach and pays tribute to our vision of spreading the benefits of Shari’a-compliant banking to every corner of Oman. We will continue to embrace a proactive business model that will directly contribute to the overall growth of this emerging,” commented Khalid Al Kayed, CEO, Bank Nizwa.

Critics’ Choice Awards (CCAs)

Winners of this category come from a number of institutions involved in Islamic retail finance, which also include non-bank Islamic financial institutions. The non-bank Islamic retail finance winner institutions this year included the likes of National Bonds Corporation, First Habib Modaraba, HelloGold and OneGram, etc. These awards fall under Critics’ Choice Awards (CCAs).

Under CCAs, a number of individual, product and institutional awards are issued. The CCAs allow the awards committee to include those who cannot be captured through the financial data on Islamic retail banks. For example, Islamic banking windows are not included in the data set used for efficiency analysis. CCAs ensure that this important segment of the Islamic retail banking industry is not left out. Similarly, individuals and products cannot be included in the efficiency analysis that utilises only bank-level data.

“Noor Bank has emerged as a premier brand in Islamic retail banking. It received the CCA for Best Islamic Retail Banking Brand 2017 for the second year in a row.”

National Bonds Corporation was the proud winner of Critics’ Choice best Islamic Savings Product Awards 2017. Commenting on this win, Mohammed Qasim Al-Ali, CEO of National Bonds Corporation said “We are pleased to receive this industry distinction that reaffirms our progress in the right direction as we continue to innovate our value offerings to ensure the best dividends for our bondholders.”

As one of the leading investment companies in the region, National Bonds seeks to make regular savings a compulsive habit through incentivizing bondholders with rich rewards programmes.

First Habib Modaraba is an excellent example of Islamic retail investments. It was therefore chosen to receive Critics’ Choice Best Islamic Retail Investment Product 2017. Muhammad Shoaib Ibrahim, Chief Executive Officer of First Habib Modaraba commented, “According to Modaraba concept in Islamic finance, Modaraba is a kind of partnership wherein one party provides finance to other for the purpose of carrying business and sharing profits earned through mixture of investment and expertise.

Enriching every relationship and creating huge benefits through sharing maximum profits with the investors. It is a progressive partnership based on trust, confidence and mutual respect.”

Another Islamic retail investment product of immense significance is Libshara Savings Account offered by Kuwait Finance House Bahrain. It received Critics’ Choice Best Prize- linked Islamic Retail Investment Product 2017. Based on the Mudaraba concept, prizes are donated from the Bank’s shareholders’ money, not deducted from the profits or capital of the Mudaraba. Libshara Savings Account offer a unique opportunity to clients who never won and prizes. For example, clients who never-won in the past 24 months are entitled to enter a special draw in “our savers” segment.

HelloGold received the Critics’ Choice Most Innovative Islamic Retail Product award for 2017. The Critics’ Choice Committee was greatly impressed by the Mobile App that the company has developed to offer the product on a retail level to almost anyone who has a smartphone. Founded in 2015 and headquartered in Kuala Lumpur, Malaysia; HelloGold built the world’s first Shari’a-compliant gold digital application that changes the way people buy and sell gold.

The Critics’ Choice Best Islamic Cryptocurrency Award 2017 was presented to OneGram. OneGram is a collaborative effort of an international group of companies that is leading one of the most exciting innovations in the digital payments industry. OneGram Coins (OGC) are digital cryptocurrency that are backed by physical gold on a 1 to 1 basis. For example, one coin will be equivalent to one gram of gold. Hence, OneGram uses blockchain technology to create a “new kind of cryptocurrency”, where each coin is backed by one gram of gold at launch.

Meethaq Islamic Banking (Bank Muscat) won for the second time in a row the Critics’ Choice Best Islamic Retail Banking Window in Oman 2017 award. Meethaq Islamic Banking is led by Sulaiman Al Harthi, Deputy CEO and Group Head of Islamic Banking at Bank Muscat, who received the award on behalf of the bank. “Meethaq is honoured to win the Islamic Retail Banking Award in recognition of vital contributions to Islamic banking and finance in Oman. Meethaq is contributing significantly to the growth and development of the Omani banking sector and we are witnessing an upswing in Islamic finance and investment compatible with the provisions of Shari’a laws,” said Sulaiman Al Harthy.

Noor Bank has emerged as a premier brand in Islamic retail banking. It received the CCA for Best Islamic Retail Banking Brand 2017 for the second year in a row. The award was received by Mufazzal Kajiji, Head of Retail Banking. Noor Bank began operations as Noor Islamic Bank in 2008, and it was rebranded as Noor Bank in 2014, the year when the total income of the bank was reported to have trebled. Obviously, rebranding worked for the bank! “We are proud to accept this prestigious award, which reinforces our brand presence amongst the region’s expanding retail banking customer base,” commented Mufazzal Kajiji. “The United Arab Emirates offers a wealth of opportunities to provide Shari’a-compliant financial products that are ethical and transparent. Improving the reach of our retail banking services is a core focus area for us – and we are witnessing strong growth in targeted segments, including personal finance, home finance, cards and deposits. Going forward, we will launch a number of initiatives aimed at delivering differentiated, personalised services to meet our customer’s varying needs.”

Adnan Fasih, Head of Islamic Banking at Habib Bank AG Zurich, was named as the Upcoming Personality in Islamic Retail Banking for the year 2017. He also received another award on behalf of HabibMetro Sirat, which was announced as the Critics’ Choice Best Emerging Islamic Retail Banking Brand 2017. Adnan Fasih is the main architect behind HabibMetro Sirat and aims at making it the best Islamic banking brand in the world. Sirat has operations in Pakistan and the UAE, with probable expansion into other countries like the UK and South Africa.

Mufti Khalid Hasani received the accolade for Upcoming Shari’a Scholar 2017. He joins the previous two winners in this category, i.e., Mufti Aziz ur Rahman (2015) and Dr. Abdulbari Mashal (2016). Mufti Muhammad Khalid Hasani is a young Shari’a scholar of growing repute and respect in Islamic banking and finance.

As Shari’a Coordinator at Dubai Islamic Bank Pakistan, his responsibilities include providing Shari’a advisory to different departments within the bank and helping in product development and structuring. Given the growth of Islamic retail banking in Pakistan, Mufti Khalid Hasani has gathered impressive and in-depth knowledge of Islamic financial transactions. “I am pleased that our Critics’ Choice Committee selected Mufti Khalid Hasani as Upcoming Shari’a Scholar 2017, as he is a dedicated young man, with huge commitment to serving Islamic banking and finance,” said Professor Humayon Dar, Chairman of Islamic Retail Banking Awards. “He is a man to follow, as in my opinion he will excel to achieve maximum heights in his chosen area of specialisation.”

“The most significant CCA this year was Best Islamic Credit Card 2017 presented to Arabi Islami Instalment Credit Cards issued by Islamic International Arab Bank (IIAB) of Jordan.”

Other winners in the CCA category included Dubai Centre for Islamic Banking & Finance at Hamdan Bin Mohamed Smart University which was chosen to receive the Critics’ Choice Islamic Banking R&D Award for the third year in a row and Islamic Banking Department of State Bank of Pakistan who took home the IRBA Islamic Retail Banking Advocacy Award 2017.

International Turnkey Systems (ITS) was accorded the Critics’ Choice Best Islamic Retail Banking Solutions Provider 2017. Upon receiving the award on behalf of ITS, Esam Alkheshnam, the Chief Executive Officer said, “It is truly an honour to receive the Critics’ Choice of Best Retail Banking Solutions Provider for our ETHIX Suite.” Alkeshnam added: “We are extremely proud to receive this global recognition from IRBA acknowledging ETHIX as a world-class solution. Such rewards are true testimonies for us that we are on the right direction leading the market in retail and in Islamic finance.”

The most significant CCA this year was Best Islamic Credit Card 2017 presented to Arabi Islami Instalment Credit Cards issued by Islamic International Arab Bank (IIAB) of Jordan. The Critics’ Choice Committee and the research team at Cambridge IF Analytica analysed all Islamic credit cards issued by Islamic banks and other financial institutions (involved in Islamic financial services) from all over the world. All the Islamic credit cards were classified on the basis of the underlying contracts used to structure them, i.e., tawarruq, ujra, waqf, etc. These cards were also assessed on the basis of authenticity of Shari’a assurance processes, social impact, and the overall value proposition of the products for the issuing bodies as well as the end users.

The Arabi Islami Instalment Card (with its different variants) was chosen as the winner, as it beat all other products in the peer group on the above counts. It is the only Islamic credit card with reasonable significance, in terms of its impact on the volume of the business of the issuer, which is based on qard hasan (with zero return earned by the issuer). The beauty of the product lies in developing a strong sense of loyalty amongst customers for the issuer, making it a viable Islamic financial product in its own right.

Islamic Banking Department of State Bank of Pakistan received IRBA Islamic Retail Banking Advocacy Award 2017. As an Islamic banking regulator, the State Bank of Pakistan ensures that Islamic retail banking remains sound and safe for all the shareholders and that its growth continues to fulfil socio-economic challenges in the country. The report on Knowledge, Attitude and Practices of Islamic Banking in Pakistan (popularly known as KAP Study) undertaken by the Islamic Banking Department was a path-breaking initiative that paved the ways for a number of developments in Islamic banking in the country.

CCAs for Best Islamic Retail Banks in Chosen Countries

The following CCAs were announced for Best Islamic Retail Banks in selected countries:

• Al Salam Bank Bahrain – Best Islamic Retail Bank in Bahrain
  • East Africa Bank – Best Islamic Retail Bank in Djibouti

• Bank AlJazira – Best Islamic Retail Bank in Saudi Arabia

Although these banks were not covered in the efficiency analysis, the Critics’ Choice Committee decided to highlight the exceptional success these three banks have achieved in Islamic retail banking in their respective area of jurisdictions. According to Anwar Murad, Deputy Group CEO of Banking; Al Salam Bank Bahrain has always been at the forefront of offering an innovative Shari’a-compliant banking product and services that reflected in our position as a key player amongst Islamic banks. “We also would like to extend our gratitude to all our valued customers for continuously supporting the Bank’s direction with full confidence and trust as well as appreciation to the Bank’s high calibre management team and employees for their seamless efforts towards making ASBB as one of the pioneering Shari’a-compliant Banks in the Kingdom,” he added.

“Given the huge criticism attracted by Islamic credit cards in general, due to their close resemblance with the conventional credit cards and rather weak Shari’a foundations of the structures, Arabi Islami Instalment Credit Card represents a genuine innovation in Islamic retail banking. We believe that such products are going to spearhead a new generation of Islamic financial products, which would increase the scope and scale of Islamic banking and finance.”

Bank AlJazira, which was converted into a fully Shari’a-compliant bank in 1998, is now recognized as one of the leading Shari’a-compliant fast-growing financial institutions in Saudi Arabia. “This award confirms our commitment in providing the highest standards in giving products and services to our clients and at the same time giving us a leading position in Saudi Arabia,” commented Nabil Al Hoshan, CEO and Managing Director. “Receiving this award for the second time is a great honour not only to Bank AlJazira and a constant reminder of our effort and will serve as an inspiration in order for us to achieve more success in the future.”

IRBA Celebratory Awards (ICAs)

The top IRBA Celebratory Award (ICA) is Islamic Retail Banking Leadership Award, which is presented to an Islamic retail banker who has demonstrated his leadership in Islamic retail banking in the world, in his country, or within his organisation. The inaugural Islamic Retail Banking Leadership Award was presented to Hussein Al Qemzi, CEO of Noor Bank, in 2015. This was followed by Musa Shihadeh, General Manager & CEO of Jordan Islamic Bank, in 2016. This year’s winner of this coveted award was Dato’ Wan Mohd Fadzmi Wan Othman, former President and CEO of Agrobank Malaysia.

Dato’ Wan Mohd Fadzmi was chosen to receive this year’s top ICA for his exceptional leadership skills for not only converting Agrobank into a full-fledged Islamic bank with a focus on financial inclusion, agriculture financing and support for the halal industry but also for making it one of the most profitable Islamic bank in Malaysia. “I congratulate Dato’ Wan Mohd Fadzmi on this huge recognition for his leadership role in Islamic retail banking.

May his success story and commitment in supporting the role of Islamic finance in achieving sustainable development and promoting real economic development serves as an inspiration to us all,” said Professor Humayon Dar.

Meanwhile, commenting on the award, Dato’ Wan Mohd Fadzmi said the award is a special recognition to Agrobank and all the employees who worked hard and showed strong commitment. Under his leadership, the Bank recorded a remarkable growth of 16.9% with total financing value reaching RM8.7 billion in 2016, marking one of the best successes of the bank thus far.

IRBA CEO of the Year is another top ICA, which is presented to a CEO of an Islamic retail bank for their all-round performance as top manager and leader. This year’s IRBA CEO of the Year award was presented to Iyad Asali, General Manager & CEO of Islamic International Arab Bank (IIAB) of Jordan. IIAB also received a Critics’ Choice Award for its credit cards – Arabi Islami Instalment Credit Cards – named as the Best Islamic Credit Card for 2017.

Amer Bukvic, CEO of Bosna Bank International (BBI), was chosen as the IRBA Transformational Leader in Islamic Retail Banking for 2017.

Amer Bukvic is an Islamic banking leader of exceptional talent and multi-pronged leadership skills. He is an Islamic banker of very different style and approach. As CEO of BBI, he has achieved impressive milestones in terms of bank performance, and it is primarily owing to his leadership that the bank is considered as a Tier-1 bank in Bosnia & Herzegovina in the entire banking industry of the country. This is a remarkable achievement in its own right. The awards committee chose him for the accolade not only based on his banking performance but also considered his pioneering role in founding Sarajevo Business Forum, which has become a premier event and business platform for businesses (Islamic as well as conventional) from around the world, especially South Eastern Europe (SEE).

Islamic Retail Banker of the Year 2017 was given to a professional with exceptional talent, experience and expertise. Akif Shaikh, AGM & Head of Consumer Business at Al Rajhi Bank, is the winner of this accolade. He is a rising star in Islamic retail banking, and the Awards Committee saw in him a future CEO of an Islamic bank. Akif Shaikh was a founding member at Mashreq Al Islami (UAE) & Al Hilal Bank (UAE) core setup team who played a significant role in the launch of the Islamic window and full-fledged Islamic bank in record time.