Breaking into Islamic finance is no easy task, and getting into an international investment bank’s small Middle Eastern team is even tougher. However, there are signs that some firms are willing to expand.
In an optimistic interview on the prospects for investment banking in the Middle East next year, Sjoerd Leenart, senior country officer for J.P. Morgan in Dubai said that it is planning to increase its Islamic finance footprint in 2013.
"We want to up our game across the Islamic product spectrum and countries, hence are looking to strengthen further our local capabilities with select new hires,” he told Zawya Dow Jones. J.P. Morgan didn’t respond to our request for further detail.
This year has been an unprecedentedly good one for Middle East Islamic debt capital markets; year-to-date, over $19.7bn worth of deals have been announced, versus $5.6bn for the whole of 2011, according to figures from Dealogic.
J.P Morgan, however, has some catching up to do. HSBC is by far the dominant player in the region, with 42.6% of the market in 2012, followed by Deutsche Bank, Standard Chartered, QInvest and Citi.
“The larger international players are open to expanding their Islamic finance capability, but we’re also seeing more of a push from regional banks to compete in the capital markets space,” says Mark Swan, managing director, MENA of headhunters Principal Search.
In particular, recruitment sources tell us that HSBC and Standard Chartered are currently looking to recruit in both the UAE and Saudi Arabia. What’s more, the National Bank of Abu Dhabi (currently 8th in the Islamic DCM league tables) is looking derive up to 10% of its revenues from Islamic finance, up from 3% currently by expanding into Egypt, Oman and Malaysia.
There are, however, some cautionary tales for banks looking to challenge the dominance of the current big players. UBS, for instance, hired Dr Hussein Hassan to lead its Islamic finance business in the Middle East in September 2011. Less than a year into the role, he was made redundant.
As we explained previously, most international investment banks prefer to transfer senior employees across from conventional advisory positions, rather than looking to recruit people with specialist Islamic finance training. At the junior end, however, a combination of work experience, investment banking training and Islamic finance knowledge can give candidates an edge.