MEED: Why was Masraf al-Rayan founded?

Adel Mustafawi: The reason behind it was to establish an Islamic bank that could compete against other banks in the region. That is one reason why the capital of the bank was very large.

The founders wanted to create a regional Islamic bank able to compete against international Islamic banks.

Is Qatar’s location important given the size of projects in the country?

This bank has been playing a very important role in this economy by participating and financing mega-sized projects in Qatar and beyond. But our bank is regional – our shareholders are from Qatar and other GCC countries as well.

You offer the full range of banking services? Why offer this broad spectrum rather than concentrate on one core activity?

Our bank is a fully-fledged bank – we provide corporate, retail, investment and private banking. Of course, being in Qatar, corporate banking is the key for our success due to the mega-sized projects in Qatar. But going forward, we will be concentrating a lot more on wealth management, because people in Qatar and the region are becoming wealthier. Although we will be concentrating on wealth management, corporate and retail will always be key to the success of the bank.

Going forward, we believe we can grow anywhere between 20-30 per cent on the asset side

Is a sharia-compliant institution like yours well placed to service wealth management needs?

We very much believe so. Of course, we are going to leverage our investment banking activities, which we have at our Al-Rayan Investment subsidiary that has its own capital and is based in QFC. We have been very innovative and creative with our investment banking products and with our corporate and retail products as well. This will give us an edge going forward to provide these kinds of services to our clients.

Are you confident that the big state backed projects will continue in Qatar?

Yes, we believe they will sustain. The Qatar economy has doubled every five years since 1995 and we believe the Qatar economy will grow at the same level if not higher than before.

Every five years you are going to see a doubling of gross domestic product (GDP). We are expecting total GDP to be $114bn by end of this year. Going into 2011, we are expecting strong GDP growth, and believe it will double again in five years’ time.

What are your plans for expanding the branch network?

We are going to have our branch expansion organically in Qatar.  We have already launched a few credit cards and retail products and will be doing the same thing going forward.

What are the key challenges facing Islamic financial institutions?

Islamic finance has been growing tremendously even during the crisis. If you look at it globally, Islamic assets and products have grown tremendously during this period compared with the conventional. We believe this will continue as well. A lot of companies are looking at Islamic finance products around the world and we think we are in a good position to be part of this growth, having our size of this balance sheet and capital.

Overall, Islamic assets and products are much more secure than the conventional ones as it is always asset backed. This is very good for both the clients and financial institutions.

How do you plan to grow beyond Qatar’s borders?

We like the GCC and Asia. From day one, we have concentrated on these regions. We are trying to build a bridge between Asia and the GCC.

Today we have an operation in Saudi Arabia, a consumer finance mortgage company called Kirnaf for which Masraf al-Rayan is the major shareholder. The GCC is an important economy to us, so we will be part of this economy and we will expand accordingly. Education, health and industry are the three key sectors, which we believe have great potential.  

Your assets have grown significantly this year. What is your strategy for growing the asset base?

Since our inception we have been growing our asset books at the same time as growing net profits. If you look at our financials year-on-year, we are about 50 per cent up in assets, the same with profitability. Going forward, we believe we can grow anywhere between 20-30 per cent on the asset side and the majority will be from the GCC. We have deals in the pipeline and hopefully, the market will soon know about them.