Kuwait International Bank on the rise of the Islamic banking sector | Video

World Finance talks to Mourad Mekhail of Kuwait International Bank about the future ahead, the bank’s recent Fitch upgrade, and its Sharia compliant activities

February 10, 2014

Having just been upgraded by Fitch, Kuwait International Bank is leading the way in the Islamic Banking sector. Mourad Mekhail talks about how the bank has come up trumps in spite of conflict in the Arab world, and how it is working towards staying Sharia compliant.

World Finance: Well Mourad, the Arab world, in particular Syria and Egypt, has been beset by wars over the past few years. So how has this affected the banking industry in Kuwait?

Mourad Mekhail: They have very limited exposure to this area, and the few banks operating out of these countries are not affected. This type of turmoil is giving the bank a level of appetite to go for certain risk which they were not in the past taking.

[W]e can accommodate the business of our clients, even in these countries that have this turmoil

We, as Kuwait International Bank, as an always-prepared bank, we created some innovative structures that mean we can accommodate the business of our clients, even in these countries that have this turmoil. We have the investment banking department, where international banking professionals are doing their utmost to accommodate the business of the clients by creating innovative structures to mitigate and eliminate such political – and also commercial – risk, related to doing business in these countries.

World Finance: Kuwait’s banking industry has gone from strength to strength, and it was relatively unaffected, would you say, by the global financial crisis. And it was also bolstered by the government’s $130bn national development plan. So how is Kuwait International Bank involved in this?

Mourad Mekhail: It is in fact an ambitious plan for the whole country. We are, as we said, prepared. We know our client very well: we listen exactly to what they need. We know the market. We are prepared to offer all types of services that can be needed in the markets in terms of international banking, in terms of using the services of our treasury, in terms of using our retail banking network.

It is really our utmost priority: if it comes to the business of our country, then we will be offering all of what we have to serve them.

World Finance: Well you’ve recently had your Fitch rating upgraded, so what would you say your key to success is?

Mourad Mekhail: We enhance the asset quality of our bank. We use the NPLs that we have and have tapped into international transactions in the region. It’s very important here to say that really we rely on the teamwork and the spirit of cooperation of every employee in our bank.

We are bringing new products and new ideas and new business solutions to our clients

World Finance: Islamic banking is huge in Kuwait, and obviously that means there’s quite a lot of competition. Now Kuwait International Bank has been Sharia-compliant since 2007, so how do you stay ahead of the game?

Mourad Mekhail: We are focusing on our niche. We are establishing that, and building it based on our client need. We listen to our clients, we know the market very well, we are always maximising the penetration of the market. We are partnering globally, bringing the expertise, the know-how. We are bringing new products and new ideas and new business solutions to our clients.

World Finance: A large part of Sharia-compliant banking is, of course, social responsibility, so what sort of projects do you have set up in that area?

Mourad Mekhail: We adopted a programme of educating the youth in Kuwait to bring them to the level of understanding what finance is. It is one of the non-profitable organisations related to UNICEF, and they are keen to bringing and educating the youth, to tell them what finance is. We started with very simple stuff: saving. From the different departments of the bank, we visited a couple of schools, and we have the intention in the future to penetrate the market; not only to educate our people for savings. We would like to educate our pupils and students of the value of their money, to know what finance is, and for it to be one of the important subjects in their schools.

World Finance: An important part of financial development in Kuwait is of course the growth of capital markets, and the increasing role of regulators. So how do you address this?

We adopted a programme of educating the youth in Kuwait to bring them to the level of understanding what finance is

Mourad Mekhail: Our intention is that we as a bank go to the regulators, talk to them, introduce to them our visions. You know, if you introduce your vision in advance, so you have someone from the regulators to shape your vision, then you have a warning signal: all right, here you cannot go more than this, or that. So, being one of the leading banks and looking to be a market player, and market maker even. One of the very important to establish working very closely with regulators and creating the transparency and taking that further.

World Finance: Well finally, looking to the year ahead now. What’s in store for Kuwait International Bank?

Mourad Mekhail: The year started very positively. This is confirming what we have as a major target, is being a market player and a market maker. Of course we will be continuing doing our homework and concentrating and focusing our market niche, concentrating and focusing on our client needs, and increasing the return on equity of our stakeholders.

World Finance: Mourad, thank you.

Mourad Mekhail: Thank you very much.

Kuwait International Bank is the winner of the World Finance award for Best Islamic Bank, Kuwait, 2014.