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Ehsun Zaidi: one of the leading bankers in Islamic finance |
The US bank poached from Dubai Islamic Bank (DIB) Ehsun Zaidi, previously head of capital markets, and Omair Mooraj, previously head of global project finance, syndication, and structured finance. Ghassan Abdul Karim, head of the Middle East at JPMorgan, says: "Ehsun Zaidi and Omair Mooraj are among the leading professionals in the Islamic finance field."
The firm also hired Rody Yared, head of equity capital markets and syndicate at Shuaa Capital, the leading regional investment bank based in Dubai.
JPMorgan will hope that these hires will give it the big push that it needs if it wants to become a top-tier player in the region, and especially in Islamic finance, where it trails far behind rivals such as Deutsche Bank, HSBC and Barclays Capital.
The US firm was not even in the top 30 banks for completed Islamic financings in the first nine months of 2007, according to the Islamic Finance Information Service (IFIS), a data provider. Moreover, it has not been involved in a single sukuk bond for a Middle East borrower this year – its only sukuk transaction in 2007 has been for Khazanah, the Malaysian state investment company.
Blockbusters
The bank fares better in conventional bond deals out of the Middle East and ranks fourth in the league tables, according to Dealogic. But to put its performance in perspective, that position is largely on the back of two blockbuster transactions – a $2.5 billion MTN for Dubai Holding, and a $1.5 million deal for Sabic, the Saudi Arabian conglomerate.
The departures of Zaidi and Mooraj are potentially big blows for DIB. Both were senior figures at the bank. Zaidi, for example, was a key banker involved in DIB’s landmark sukuk deal for Dubai Ports, which it lead managed with Barclays Capital in 2006. The two firms teamed up for a similar transaction for Nakheel.
JPMorgan, however, will have to work with banks such as DIB if it is to grow its Middle Eastern operation, according to sources. Corporates in Dubai, as elsewhere in the Middle East, often maintain substantial government ownership. This can often favour local banks since government-owned corporates in Dubai have a history of granting joint mandates to a local and an international bank.
JPMorgan’s Karim says local and international banks should therefore view their roles as complementary. When asked if he expects such partnerships to become more formal, he says that joint ventures between global and local banks might make sense and could work effectively in certain markets and product areas.
Aref Kooheji, DIB’s executive vice-president of investment and corporate banking, also acknowledges the importance of local and global investment banks maintaining good relations. "We see more and more of the banks that have come into the region considering joining hands with us and joining us as a strategic partner," he says.
Salam Salam, managing director of Shuaa Capital, also admits that although Shuaa and JPMorgan have not worked together before, now that the US bank is expanding in the Middle East it is much more likely that they will join forces on deals. "The fact that they have some of our people is even more of a reason to work with them," she says.