Banks face skills gap in Islamic finance

Tuesday, Nov 19, 2013

Dubai wants to be known as the next global hub for the $8 trillion Islamic economy, but the financial institutions are still having difficulty finding the right candidates that are proficient in Sharia-compliant finance.

Banks face skills gap in Islamic finance

Banks face skills gap in Islamic finance

At a forum organized by Dubai International Academic City (DIAC), in collaboration with Thomson Reuters yesterday, representatives from the government, corporate and academic sectors tackled the serious skills gap problem in the Islamic finance sector.

A Workforce Planning Study commissioned this year by DIAC, in conjunction with Deloitte, showed that GCC banks are looking for professionals with dedicated Islamic banking skills, particularly at the entry level.

Among the 60 banks surveyed, half of them said they find it difficult to hire graduates for entry-level posts. About 23 per cent have a similar problem when screening applicants for mid-level roles, while only a small proportion (5 per cent) struggle to fill senior positions.
Experts attributed the problem partly to the lack of proper training, experience and qualifications of finance professionals. While the UAE is home to a number of institutions offering banking and finance courses, specialist programmes dedicated to Islamic finance are lacking. There is therefore a need for the educational institutions, finance industry and government to work more closely in order to address the issue.

A top executive at a major Islamic bank in Dubai who specializes in talent management, said a lot of jobseekers, particularly fresh graduates, in the UAE lack the necessary skills to work in Islamic finance. “We are having difficulty in getting the right skills set. Besides, when I see graduates with Islamic banking qualifications, they don’t really want to be in the Sharia department. They want to be in risk management, for example,” the bank official, who asked not be named, said.

Dr. Mohammed Nurul Alam, associate professor at Canadian University of Dubai, which offers Master of Business Administration (MBA) in Islamic banking, however, said there is a very small uptake of courses dedicated to Sharia-compliant finance. What is contributing to the problem is that most banks don’t finance the higher education needs of their staff who lack specialist knowledge.

“Most of the students who come to us are sponsored by banks, but only less than 5 per cent are enrolled in Islamic finance. There are a lot of Islamic banking institutions here but no one wants to [foot the bill] for an MBA in Islamic banking,” Alam told Gulf News.

Muneer Khan, partner at Simmons & Simmons pointed out that while financial institutions have trouble finding the right candidates, there is actually a huge pool of talent waiting to be tapped into.

Khan said they receive an “astounding” number of CVs mainly from applicants seeking to work as lawyers in the industry and a number from jobseekers who want to move from conventional to Sharia-compliant banking.

“I’ve noticed that the number has been going up. We get applicants from the US, UK, Europe. We also get a lot from the region, for example, from Saudi Arabia, Bahrain and occasionally from Southeast Asian countries like Malaysia,” Khan told Gulf News.

The problem is that while employers require relevant skills, experience and academic knowledge, a lot of the jobseekers lack specialist Islamic finance experience and expertise. Some applicants have not even started studying formally.

“There is a genuine shortage of people with specialist expertise and years of experience. Getting the first foot on the ladder is hard, but as you get further up, the opportunities open up and there is less competition,” he added.

By Cleofe Maceda Senior Reporter

Gulf News 2013. All rights reserved.

Dubai Investments sees $300m sukuk by year-end

Dubai Investments aims to raise $300 million from a debut sale of Islamic bonds by the end of 2013 after delaying a similar plan early this year due to rising interest rates, its chief executive said.

Dubai Investments sees $300m sukuk by year-end

Dubai Investments sees $300m sukuk by year-end

The conglomerate, which has interests in several sectors including property and manufacturing, had in April picked Citigroup Inc, Nomura and J.P. Morgan Chase & Co to help arrange the sale.

“We are in the final stage of application to the various markets. I’m hoping that it should be done this year,” Khalid bin Kalban told reporters on Monday.

“This (sukuk sale) is delayed because interest rates climbed up. We are targeting a specific interest rate. Once we achieve it we will go into the market, otherwise there’s no point. It has come down to lower than the level we expected.”

The company, whose manufacturing business was hit by political unrest in the Gulf Arab region, has been eyeing a sukuk issue since last year to finance expansion of some manufacturing units and repay debt.


Kalban reiterated that plans to offload stakes in two of the conglomerate’s units were still on track despite an apparent delay – in April, he said the sales would be completed by September-end and that combined they would raise about 700 million dirhams ($190.58 million).

“By the end of the year everything will be sealed,” said Kalban. “This is a big transaction. The delay is from the lawyers not from us.”

He said one deal would raise around 500 million dirhams and the other 200 million dirhams, but declined to identify the companies in which Dubai Investments is planning to sell stakes or the proposed buyers.

Kalban was speaking at the launch of a new subsidiary Emirates Insolaire, which is a joint venture between Dubai Investments and Switzerland technology firm SwissINSO to produce solar panels.

The panels will be manufactured at Dubai Investments’ existing plants in the Gulf, which will produce 300,000 square metres of the glass in 2014, Kalban said.

Shares in Dubai Investments were trading 2.4 percent higher on the Dubai bourse at 1050 GMT. – Reuters