Staffing a key hurdle for Islamic banks

By Douwe Miedema and Clara Ferreira-Marques

ZURICH/LONDON (Reuters) - A shortage of qualified staff is a key obstacle for the booming Islamic banking sector, but indiscriminate hiring could put the sector's reputation at risk, top industry executives said on Tuesday.

Afaq Khan, chief executive of Islamic Banking at Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz), echoed confidence across the industry that it would be one of the few areas in global banking largely untouched by the U.S. subprime mortgage crisis.

But he said a chronic staff shortage could crimp growth and expose the industry to insufficiently qualified staff.

"A lot of Islamic finance institutions are coming to the fore, and there is a (shortage) of trained Islamic bankers," Khan, who runs Standard Chartered Saadiq, told the Reuters Islamic Banking and Finance Summit. "There is a bottleneck."

The industry's reputation, he said, could be on the line.

"The risk I see is that the weakest link will break the chain," Khan told reporters in London. "Reputation will be damaged for the industry as a whole for the error of one."

The head of Swiss bank Mirabaud's Middle East unit said the rapidly growing industry was already paying premium wages.

"A few very talented people definitely deserve what they're earning, but you also have a lot of people in this market who will not be able to deliver," Dubai-based Gilles Rollet told Reuters in a telephone interview.  Continued...