The 22-time Grand Slam champion and his wife Maria Francisca Perello welcomed their first child together in October 2022
Sohail Zubairi, chief executive of Dar Al Sharia consultancy, said at the Reuters Islamic Banking and Finance Summit in Dubai, sparse liquidity continued to dog Islamic and conventional lenders in the United Arab Emirates and that worse could be in store if conditions do not improve by the third quarter.
Zubairi’s assessment, echoed by others at the summit, reflects how the West’s financial woes have also punished portions of the Islamic sector, once thought protected due to its conservative nature and ban on speculation.
Dar Al Sharia was set up in July 2008 by Dubai Islamic Bank to provide financial and legal expertise for the Islamic finance industry.
Zubairi said his assessment extended to the conventional sector as well and that, by contrast, Islamic banks benefited from their conservative nature, their ban on interest or speculation, and an additional layer of corporate governance.
Yousif Khalaf, chief executive of Ajman bank, said bankers were more focused on survival than profitability and that more losses were likely to come to light in 2009. “Growth and profitability are no longer important objectives for 2009. What is more important is survival,” he said. Ajman bank listed in June last year and has had to reverse plans to expand outside its home in the United Arab Emirates.
Khalaf said the extent of the crisis was likely to emerge only later in 2009 as losses from the real estate sector emerge. “The magnitude of the problems have not been reflected clearly in the financial statements of banks, because banks have been able to use different accounting treatments that have not seen the losses translated into their accounts.”
Islamic finance has grown into a $1 trillion industry built on a belief of ethical investing under shariah law, but poor earnings by Gulf Islamic banks due to exposure to the ailing property sector have thrown regulation of the business into the spotlight.
Khalaf said banks have not followed one consistent standard due to competing regulatory regimes and that it may take the establishment of a common central bank for the six-nation Gulf Co-operation Council to forge a single rulebook.
Governed by national authorities or industry bodies, sharia banks are subject to a patchwork of commercial and religious rules that differ across jurisdictions, reflecting the varied and fragmented nature of the industry.
“Unfortunately, these issues have not helped the Islamic finance industry,” he said. “I’m hoping that if the GCC reaches some point where there is one central bank for the GCC, that will hopefully be able to play some role.”
The 22-time Grand Slam champion and his wife Maria Francisca Perello welcomed their first child together in October 2022
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