2006 could be a good year for anyone interested in working with Sharia - or Islamic law - compliant banking products on both sides of the Atlantic.
Recruiters in London and New York say investment banks are showing an increasing interest in the fast-growing Islamic banking market. "It's definitely a growing area," says Aidan Kennedy, a partner at Armstrong International in London. "All the bulge-bracket banks are looking at moving into it right now."
"Islamic banking is still very much in its infancy," confirms Deborah Rivera, president and founder of search firm The Succession Group in New York. "We're expecting growth in the near future."
Much of the interest surrounds products applying derivatives technology to Islamic-approved contracts which avoid the payment or receipt of interest, forbidden under Islamic law. "There are a lot of fairly vanilla Sharia-compliant products," says Kennedy. "But a number of banks are creating more sophisticated products for the Sharia market in the Gulf states, and for institutions in Europe which are looking to invest in the Middle East."
Deutsche Bank, HSBC, Citigroup, and BNP Paribas have an established Islamic banking presence. In March this year, for example, Deutsche Bank claimed to pioneer the first Sharia-compliant foreign exchange option, allowing Islamic investors to hedge foreign currency risk.
However, anyone expecting a flood of Sharia-compliant hiring is likely to be disappointed. Teams tend to be quite small. A spokesperson for Deutsche Bank in London says staff working on Islamic transactions are drawn from other areas of the bank and don't form a dedicated Sharia-compliant division. "We work in a matrix organisation and call upon expertise as required," says a banker working in the Sharia-compliant area of another global organisation.
Kennedy says candidates moving into Islamic banking roles typically have a high degree of sophistication with derivatives products: "There are some very talented people in this space, working at the leading edge of product development. It's a small community, and there is a premium to be earned for working there."
Many of those working on Sharia-related products are Muslim, although this is not mandatory. "We have a few dozen nationalities and every religion from Jews to Christians, Muslims and Hindus in our group," says the head of the Sharia-compliant division of an international bank in New York.
Nevertheless, investment banks' growing interest in Islamic banking is likely to appeal particularly to Muslims as a means of combining their religion and career. That said, one banker of Muslim origin says banks make it difficult to observe religious customs: "In Ramadan, you can't take a 10-minute break to eat after sunset, and taking two minutes to pray somewhere in the office is unthinkable. Most people are afraid to say they are Muslim."