Author: World Finance

Jordan’s success amid turmoil

Posted on by World Finance

Jordan’s banking sector has been able to transcend the geopolitical chaos that has hampered many neighbouring nations. Jordan Islamic Bank’s Musa Shihadeh explains how.

Jordan’s banking sector has been able to transcend the geopolitical chaos that has hampered many neighbouring nations. Here to tell us how, Musa Shihadeh. 

World Finance: We just talked about some of the tensions in your region. Tell me, how have you been able to continue to build on your country’s momentum despite all of this?

Musa Shihadeh: Jordan is secured and attractive for investors. The laws in the country are attractive for people coming to invest in the country. Regulations of the central bank enhance banks to make investments, and this gives the banking sector the success they have in this turmoil around our country.

World Finance: Of course you’ve been at the core of Jordan’s Islamic banking sector. Can you tell me what has been the key to your growth?

Musa Shihadeh: Jordan Islamic Bank is a pioneer in banking, established 35 years ago. We stick with Sharia rules and applications. We try always to have the technology and services to satisfy our customers in order to keep them and get other customers to come to the bank, and keep their loyalty for this business in order to continue successfully.

World Finance: As part of these long term plans you have of course incorporated corporate social responsibility. Tell me how.

Musa Shihadeh: Jordan Islamic Bank, as an Islamic Bank, should go to social responsibility so it is part of our mission in order to comply and apply these transactions for the bank. We have always put plans for social responsibility. We made a plan for five years in order to keep up with investing with SMEs for helping the people in education and financing them and medical systems.

We put a plan to have a solar energy system in order to save energy and keep things well, and always we apply these things in order to help the country and make sure that we are doing our business, applying to the social responsibility that banks should be part of a community.

World Finance: So as you continue with your high growth optimism, tell me how are you looking to expand your market share?

Musa Shihadeh: In our policy as a bank we make plans in order to keep our customers. They are our centre – in services and satisfaction of them – and we try always to get new customers in order to further our business.

World Finance: So who’s at the core of these growth plans, is it domestic clients or international?

Musa Shihadeh: Our domestic customers we rely on more, because we are a local bank, although we welcome international customers. Always we have a slogan that the customer is our partner in our business, and we welcome them.

World Finance: Musa, tell me, what’s next for your bank?

Musa Shihadeh: We plan to diversify and give more services for our customers to satisfy them. We hope to issue a tradable sukuk this year, because the government has issued a private loan for this. We hope that we will continue attracting our customers and satisfying their needs with more branches and ATMs, and improving our services.

World Finance: Musa, thank you so much for joining me today.

Musa Shihadeh: Thank you.

Growth of the Omani bond market

Posted on by World Finance

The National Bank of Oman has become the second bank in the Sultanate to begin issuing bonds. Ahmed Al Musalmi and Wasfi Al Sayyid explain the ambitious infrastructure projects underway in Oman, and the excitement of the international investment community to sign up.

The National Bank of Oman has joined an illustrious club in the Sultanate, and across the Middle East and North Africa region. Here to tell us more – Ahmed Al Musalmi and Wasfi Al Sayyid.

World Finance: Now your bank is issuing bonds, only the second to do so in your country, why was it important to take part?

Ahmed Al Musalmi: First of all to diversify the funding profile of the bank, the funding base, traditionally what we’ve doing is through the inter-bank borrowings and the customer deposits. But is very important that we diversify with the funding base that’s a lot more sustainable and also helps a lot in mitigating the risks that are associated with concentration, whether it’s on deposits or whether it’s on the other side of the balance sheet.

So for us it has been a great success and this bond. Under the price we have actually closed the deal – it just shows us how much it is going to help us in reducing the overall cost of funds.

World Finance: Now having more access to bond markets of course increases your liquidity position. Can you tell me how this decision alone is going to help your bank in terms of building up investment capital?

Wasfi Al Sayyid: It’s a large issue – it’s very prominent. We’ve just closed a deal on the bond $500m, which is quite a large amount. We’ve had a lot of interest from all those countries that we talked about – particularly pleasing from European countries, in particularly from London. So we’ve managed to touch on a wide range of investors – some of the largest and most prominent investors in the world, and that will have a knock on effect.

Up to now Oman has been one of the best kept secrets I think in the Middle East and certainly in the Gulf, so this has given an opportunity for these investors to get to know Oman. And these people will be producing research reports – they will create a lot of buzz and a lot of noise around it, and be beneficial in the long term, in terms of our investment flows into the country.

And in terms of our tourism potential – tourism is one of the main diversifiers for the country and this is the vision 2020, where we expect tourism to form a good part of the GDP, and diversify away from oil and gas, and this is another way that we can help to achieve that for the country I think.

Ahmed Al Musalmi: And also I think from the banking sector perspective, when it comes to contributing to the overall economic diversification, which actually is under the government vision 2020, they key focus is to reduce dependence on oil and gas. What we have actually seen is that there is a tremendous amount of interest from all the markets that we have visited – Singapore, Hong Kong and London – a tremendous amount of interest from investors to actually invest in Oman, and Oman has been a very good story.

We have showcased this story of Oman. The government is investing a lot into infrastructure development in the country. There are mega projects that have been announced and these projects obviously need a lot of financing. And this will give a chance to the banks, once they get access to the global funding base, will give the chance to the local banks to participate in a lot more substantial ways going forward.

World Finance: Ahmed, can you tell me what sort of infrastructure projects are foreign investors looking to get involved with in Oman?

Ahmed Al Musalmi: We have quite a number of those. Under every sector of the economy, starting for example with the ports, we have got the new port in the central part of the country called ‘Duqm’. It is a mega project in infrastructure development; again it’s part of the overall vision of the government to diversify the economy.

And there is tourism, again a lot of interest we have seen in terms of hotels for example. We see quite a lot of interest from different investors who are interesting in investing in the tourism industry – it is very very attractive.

World Finance: Though there are many opportunities for investment, some people might be turned away frankly, because of the region you’re based in. How does that affect peoples’ confidence? 

Wasfi Al Sayyid: If you’d asked that question 15 to 20 years ago then yes, there would have been an impact. I mean people didn’t know much about the region at all; a lot of what was coming out was quite scary. Today people are a lot more sophisticated. So we don’t get our news from just one source – we have access to the Internet, blogs; there is a lot of dialogue. So the truth tends to come out a lot more quickly than before.

And I think that, you know, people are able today to differentiate between the Gulf region, which is really relatively peaceful, and some if the wider MENA region where most of the geo-political issues are occurring. So I think when it comes to the GCC we are not really impacted when it comes to investment, people are looking to invest in all of the GCC countries. Oman is particularly attractive – it is a very stable economy. It’s a beautiful destination – sun, sea, sand, 1,800km of coastline. People want to participate in that story and the more they know about it – the more they’ll want to do that.

And I think that’s the same with all of our neighbours. At the same time, you know Oman is very strategically located. It’s located in the centre of Persia and Africa and you know god willing, when peace starts to become a reality in the wider region, Oman will be well placed to form the centre peace of a hub, a logistics hub, a commercial hub that stretches all the way from Persia into Africa, and I think that’s very exciting for all of us.