Opening Doors in Islamic Banking
By re-focusing the bank’s business model on SME and insurance products, Gulf African Bank has continued to grow its name as the Kenyan leader in Islamic Banking
Writer: Emily Jarvis
Project Manager: Donovan Smith
Since last speaking to Africa Outlook in 2014, the award-winning Gulf African Bank (GAB) has gone from strength to strength, leveraging its position as Kenya’s largest Islamic bank to grow both the brand and continue to innovate its product range. Recognised by M & A Today and Islamic Finance News as the Best Islamic Bank in Kenya, these triumphs have functioned to widen the profile of the Bank to emerge as the frontrunner in Islamic Finance regionally.
Showcasing its diverse offering once more, Abdalla Abdulkhalik, CEO and Board Member of Gulf African Bank says that growth in different segments within the bank coupled with geographic expansion has contributed to maintaining its expansion levels.
“Our strong position has enabled us to engage in new partnerships regionally and internationally, engage in product diversification to include insurance, re-focusing the bank’s business model through the formation of a singular business unit for easier delivery, especially for micro and macro businesses, improvement in quality and quantity of marketing and a strategic shift in investment to customer and business innovation,” says the CEO.
With GAB’s Return on Assets (RoAs) currently standing at an impressive 3.12 percent and a jump in after tax profit levels by 41 percent, a continued focus on SME products and financing services has served to firmly cement the bank’s leading position in the market, even as more traditional Kenyan banks open their doors to Islamic banking.
“The increased competition in this sector has prompted us to think of ways of improving our product and service offering going forward,” he adds. Accordingly, GAB has the best trade financing facilities for international traders that subscribe to the Shari’ah compliant economic model, with guarantees and bonds to cater for various customer needs.
Reaching even more Kenyans
SME products remain one of the key focus areas for GAB. In line with this, the bank has further consolidated all of its Micro, Small and Medium Scale Enterprises (MSMEs) into a singular business unit (SBU) for easier delivery. This has led to a new range of MSME products and services, which is one of the major initiatives feeding into the bank’s broader long-term strategy.
Moreover, GAB has diversified into other insurance fields including Bancassurance via its new product GAB Takaful, which promises to integrate more services under the GAB umbrella. “By targeting some of the more niche markets, we can add value and entice more clients,” says Abdulkhalik.
In 2014, GAB became a member of the International Finance Corporation’s (IFC) Micro, Small and Medium Enterprise Finance Programme. The programme works with banks in 13 different African countries to increase lending to small-scale entrepreneurs that would have previously struggled to access banking. “A US $3 million investment by the IFC has gone a long way towards improving our product and service offering in this regard,” he adds.
In addition to enhancing its range of products, GAB has expanded its footprint in Kenya to include a further branch along Mombasa Road in Nairobi, a major highway synonymous with the manufacturing industries in the country and an area known as a key business hub. “Our branch network now stands at 14 plus two banking centres for women. The Mombasa Road branch is in an ideal location as a deposit and financing point for corporate as well as individuals seeking personal financing products,” Abdulkhalik explains.
Investments in IT remain a key part of GAB’s strategy in 2015, partnering with institutions like the IFC in order to proactively seek a boosted online presence. “Continued investment in IT, especially for our e-banking platforms, has resulted in continued uptake of online products and this has helped grow our income over time,” he adds.
The bank is currently reviewing various virtual banking models which it hopes to adopt in the very near future.
Maintaining good relationships with various other institutions globally has enabled GAB customers to easily make transactions across a broad geographical reach. Over time, the bank has managed to leverage a variety of partnerships which have each contributed positively to overall growth levels. “Ensuring our partners’ Return on Investment is high has meant continued interest in the bank. The IFC, for instance, made a second investment into GAB due to our good performance over the years and our future outlook.
“As a result, we have also strategically engaged in several partnerships regionally for instance, our current partnership with Takaful Insurance of Africa has seen the bank venture into this sector successfully. This is complemented by a number of loyalty programmes with various outlets in Kenya aimed at giving our customers additional value over and above our traditional product and service offering.
“We usually make certain that we meet our end of the bargain in our partner agreements and ensure our business partners get value, especially through good returns on investment amongst other things,” Abdulkhalik details.
In recent years, Kenya’s pool of professionals has gradually grown to include those well versed in the Islamic banking model and the accompanying products and services pertaining to Islamic banking. However, GAB has its own policies in place that encourage further opportunities for training and growth from within through the identification of the best talents.
“Our management team recognises the essential role played by staff in achieving the bank’s strategic objectives. In line with this, we have drawn up and implemented a policy on talent management which helps us to select key members of staff who we feel best support the current and future business goals. We aim to identify and grow succession from within where staff in the talent pool will be given support through mentorship programmes, training and attachments,” highlights Abdulkhalik.
With the appropriate training programmes in place for all members of staff, GAB upholds diversity and inclusion and practices as an equal opportunity employer. “The bank’s performance-driven culture encourages teamwork and participation in company activities in order to keep staff morale high and ensure GAB keeps its competitive edge,” affirms Abdulkhalik.
As a Kenyan bank and a good corporate citizen, GAB recognises that participation in and contribution to society is part of being good citizens and facilitating the positive development of society. “We strive to be responsive to the broader concerns of the communities in which we operate and have a genuine desire to improve the quality of life for Kenyans,” says Abdulkhalik.
The bank continues to be involved within the community through different facets; namely health, economic empowerment, education and environment initiatives. Over the Ramadhan period in 2014 for instance, the bank made donations to various institutions ranging from places of worship, schools, children’s homes and community based organisations in Nairobi, Coast and North Eastern regions of Kenya. During this period, the bank also participated in a dialysis fundraising campaign with Malindi Toa Donge Lako, a Community Based Organisation (CBO) in the Coastal region of Kenya. Furthermore, the bank has continued to provide access to education under its bursary scheme, besides participating in varied initiatives like the Global Money Week through job shadowing programmes with the youth under the broad economic citizenship empowerment banner.
In order to remain at the forefront of Islamic banking, GAB has in place several new strategic objectives which will help the bank grow its financing arrangements for customers, increase customer deposits and its asset base among other key segments which will move the bank “into the next tier” as Abdulkhalik summarises: “Some of these initiatives include strong partnerships with credible institutions (both financial and non-financial), product diversification, product and service revamping, enhanced customer incentivisation through loyalty programmes, increased selling via digital platforms and coming up with unique niche targeted marketing programmes.
“These are just some of the plans we are following through to ensure the bank retains its position as a leader and an authority in Islamic banking regionally.”
More information on GAB Treasury
GAB Treasury is a highly professional, dynamic and customer-centric team offering following products and services:
• Very attractive foreign exchange rates on transfers as low as US$5,000 or its equivalent at zero commission
• Best packages on Hajj accounts and Hajj Drafts for Muslims wishing to perform the Hajj
• Fast, safe and secure solutions on remittances from the Diaspora vide our value-adding partners;
- North America based Coinfling
- UAE based Xpress Money
- Saudi Arabia based Samba Speedcash
• Robust and long-standing correspondent banking network that supports international trade business specifically covering the Middle East and North African countries
• Solutions on payments and settlements in East and Central African regional countries
• Shari’ah-compliant foreign exchange hedging advice for importers and exporters
• Shari’ah-compliant investment solutions and short-term corporate finance solutions
• Free instant confirmations of SWIFT transfers
• Free quality commentaries on global markets