NBS expansion surges ahead with creation of new retail banking group

Its strategy is based on the perceived superiority of Islamic banking principles, which it gives a fairer and more equitable deal to customers.

NBS is the first bank in the world to make the transition from conventional to Islamic banking, and has since begun to make its presence felt more strongly in local and regional markets.

Setting up a retail banking group is one of several expansion projects that follow a major overhaul of all its operations, expanding its branch network in the UAE and beyond, and intensifying corporate investment marketing
efforts across the entire GCC.

A team of retail banking specialists has been appointed to operate the new group, led by Ashraf Bibars, a highly-experienced retail banker who previously held senior positions with other leading UAE banks.

Six new Islamic finance products have already been launched - including a Haj and Umrah scheme called 'Labbayk', and 'Shahadati' - specially-designed to meet educational needs.

Both products are made available under the 'Ijara of services' principle - one of the mainstays of Islamic banking.

No interest is charged, but the bank adds a profit margin to the transaction agreed to by the bank and the customer according to Ijara rules. The size of advances offered, repayment terms, and cost to the borrower are all
significantly better than the market, according to Bibars.

NBS is the first Islamic bank in the UAE to accept post-dated cheques as a source of repayment, and the only bank to make facilities available to non-customers who do not have their salaries transferred to the bank.

NBS general manager Hussein Al Qemzi commented: "As an Islamic bank, we are particularly conscious of the significance of Haj and Umrah to our customers, and of social responsibility associated with the provision of education.

"That's why we made these sectors a priority in our diversification into the retail finance sector."

The bank's retail division now offers a suite of personal finance services fully compliant with Sharia'a principles and approved by the bank's Fatwa and Sharia'a Advisory Board. They include holiday packages and air tickets, residential accommodation, and medical treatment.

Same day approval applies to all products and customers have a three months grace period before paying the first installment, as well as receiving a free Visa Islamic card for the first year.

"We are dedicated to the Islamic banking principles of fairness and trust for all - Muslim and non-Muslim customers are very welcome - and our new products reflect these principles," Al Qemzi said.

"Our commitment is to establish a new standard of values and ethics in banking in a way that other banks are unable to provide, simply because they are not founded on Islamic banking principles."

Ashraf Bibars, NBS's head of retail banking, estimates that the UAE market for retail finance for consumption and business purpose is worth about AED6.5 billion annually.

"We believe we can win a significant share of this market simply because of the nature of the Islamic finance products that we offer and superior service that we strive to give our customers.

"We only launched the first product at the beginning of September but the response has been exceptional. This itself shows that the market is looking for better value and better service, which is exactly what we seek to provide.

"I don't think it's unrealistic to say that we could capture a market share in the high single digits within a year or so."

As part of the support service for the division, a dedicated call centre has been set up at Dubai Internet City and branches are being refurbished to cope with the new influx of customers.

General manager Al Qemzi says the sweeping changes taking place at the bank are in keeping with the international trend towards Islamic banking - one of the fastest-growing sectors in the industry globally.

"We are already the world's first bank to convert to full-service Islamic banking and we intend to maintain a leadership position in every aspect of our operations through innovation, imagination, and being ambassadors for the very real customer benefits that Islamic banking represents."