Reem Qaraqe was a novelty at the Bethlehem branch of Bank of Palestine Plc (BOP), and she says some customers didn’t hide their astonishment. “There’s a girl here,” was a typical remark. “Why?”

As the branch’s first female teller, Qaraqe says she quietly fumed as she endured teasing and disrespect. She had about reached her limit the day Munjed the fish seller showed up, unfurled a wad of smelly shekels, threw it on the counter and commanded her to deposit it. She says her first notion was to hit him. Instead, she decided to try extreme politeness.

“I said, please sir, count your money and then give it back. He was shocked,” says Qaraqe, 26, who wears a grey suit, white blouse and pink scarf to work. “The next week, he came in saying, ‘Hi Reem, how are you? Please make the deposit.’ He was a different guy. Now I’m his best friend at the bank.”

The encounter in December 2007 was a turning point for Qaraqe, who has an accounting degree from Bethlehem University. She says she realized that with the right attitude she could gain even the most irascible customer’s confidence, supporting her boss’s theory about how to attract depositors in an aspiring country with a fledgling financial sector: hire women.

“The more I get women representing the bank, it brings more money,” says Hashim Shawa, 35, the chairman and chief executive officer of the Ramallah-based bank founded by his grandfather in 1960. “Hiring women is directly correlated with growth, better business, better reputation, better customer satisfaction, more trust and less staff turnover.”

‘Huge Potential’
Shawa’s gender-focused strategy stands out in the West Bank and Gaza, where, according to the Palestinian Central Bureau of Statistics, only 15 percent of women work outside the home. At the same time, Shawa says, the territories are “under-banked.” Israel has 19.85 bank branches for every 100,000 adults and Jordan has 17.79, according to the Washington-based Consultative Group to Assist the Poor. In the territories, Palestinian Authority statistics show, there are nine for every 100,000 people aged 15 and above.

“There’s huge potential for the development of the financial sector,” Shawa says, and also for his bank. He says building trust is the key in a place where people are buffeted by violence and uncertainty, and that women are often better at that than men.

“They are a bit more gentle, a bit more patient,” he says, sipping tea in his office. He adds that he doesn’t want to employ more of one gender than another. “When customers see a good mix of women and men staff I think it portrays a different image, a more stable, balanced image, and I think that then translates into better confidence in the institution.”

Market Share
Shawa, who wears the industry uniform of a pinstriped suit even in the heat of Ramallah’s summer, learned his trade during nine years as a private banker, first in London with Citigroup Inc. (C) and then in Geneva with HSBC Holdings Plc. (HSBA) Since he took over Bank of Palestine from his father in April 2007, deposits have grown 85 percent to $1.2 billion and net profit 46 percent to $30.1 million.

With $1.55 billion in assets in 2010, it was the second- largest bank in the territories after Jordan-based Arab Bank Plc. (ARBK) Its market share of deposits rose to 18 percent in 2010 from 13 percent in 2007, according to Amman-based Awraq Investments. “Our increase in market share is almost in line with the increase of female employment,” Shawa says.

Still, Bank of Palestine has a way to go. Its 209 female employees are 20.6 percent of a payroll of 1,017. While that’s up from 17.1 percent four years ago, Arab Bank’s staff in Jordan is 38 percent female. At Bank Leumi Le-Israel Ltd., Israel’s largest lender by assets, the CEO, Galia Maor, is a women and 63 percent of her employees in the country are female. While Shawa’s board is all male, Arab Bank has two female directors.

‘Old Guard’
Shawa, who says he’s confident women will become directors at the next election in 2014, says he plans to increase the female workforce to 25 percent next year and 50 percent in the next 10 years. Two of his branch managers are women, and women hold about 10 percent of all management positions.

The hire-women initiative began at the urging of his wife, Bernardita, a former private banker with Citigroup who has a Masters degree in gender studies from the University of Geneva. It wasn’t a stretch for Shawa, whose grandfather, also called Hashim, supported the emancipation of women and started a high school for girls in Gaza.

For what Shawa calls the bank’s “old guard,” it hasn’t been so easy, he says, and managers and senior executives still complain that maternity leaves make a mess of work schedules.

New Policies
Last year, Qaraqe was one of four women in the Bethlehem branch who gave birth and who each took three months off, with pay. “I told them to coordinate next time,” says Issa Al- Qassis, the branch manager. “It was very difficult. We had to apologize to customers.”

Al-Qassis says he would rather not add to the 10 women, out of 35 employees, working for him. Nasser Bakeer, who heads the branch in Nablus, says women shouldn’t exceed 25 percent of total staff because of the complications when women have children. He adds that sometimes he finds it more difficult to make demands of a female employee.

Shawa says he tells managers he’s hiring women for the long-term, and that maternity leave is a “blip in their path.”

He has introduced new policies for working mothers, who when his father ran the bank were permitted to take an hour off during the workday to spend time with their babies. Some complained they couldn’t get home and back in an hour, and now they’re allowed to start an hour later or leave an hour earlier instead, giving them more flexibility to manage their day.

Security Checkpoint
When the bank’s new headquarters in Ramallah’s financial district, Ersal, opens, it will have a nursery for children.

Palestinian working mothers sometimes go to extreme lengths for childcare. One woman, who asks not to be named, drives each morning to the military checkpoint along the graffiti-covered wall that separates Ramallah from Jerusalem. There she kisses her child on the cheek and hands over the car seat to her mother-in-law, who looks after the child at her Jerusalem home until the end of the workday, when mother and child meet again.

Challenges at the bank include unwanted attention from some male customers. Nadia Habash, an architect who has done work for Bank of Palestine, says she recently witnessed an encounter as she stood in line at a West Bank branch, watching as a man complimented a teller’s looks and offered her presents.

“She was very polite and quiet,” Habash says. “She kept telling him, no thanks, I don’t want a gift, until he left.”

Statehood Quest
As the Palestinian Authority plans to pursue its quest for statehood at the United Nations in September, its regulators are taking steps to modernize the financial sector. The Palestine Capital Market Authority is seeking to attract investors to the securities, insurance and leasing markets and implementing regulations for a more developed mortgage market.

“Every Palestinian company should be employing more women because we have so many talented female graduates,” say Abeer Odeh, the agency’s female CEO. More than 50 percent of college students in the territories are female. Palestinian Authority President Mahmoud Abbas’s 22-member cabinet includes five women.

“There is very little economic opportunity for women in places affected by conflict,” says Zainab Salbi, the Iraqi-born founder of Women for Women International, a Washington-based non-profit that helps women survivors of war. “Peacemaking is about creating economic opportunities, as well as ending conflict, and the Bank of Palestine’s focus on hiring women as well as men can help that process.”

$50,000 Cash
Women in Gaza and the West Bank have to be won over as customers, too, Shawa says. Some of the bank’s campaigns are aimed exclusively at women, such as a weekly lottery that awarded the winner 1,000 shares. A promotion called Secure Your Family’s Future gives anyone who deposits $200 into a savings account the chance to win $10,000.

Rula Naser, the manager of the branch in Beit Jala near Bethlehem, recalls a woman was came in with $50,000 in a plastic bag. “She was afraid at first because she had never been to a bank,” Naser says. “She said now it’s dangerous to have a big amount like this left at home.”

Shawa’s wife gave birth to their second child in July, and the family lives in an apartment on top of the bank headquarters in Ramallah, with views of the sea, Tel Aviv and the tomb of Yasser Arafat, the Palestinian leader who died in 2004. Evidence of Shawa’s English ancestry -- his mother is English -- lurks in his fridge, which holds Colman’s English mustard and horseradish sauce, along with Palestinian Taybeh beer.

Video Conferences
Born in Gaza and raised in countries from Oman to Kuwait, Shawa, who has a construction management degree from University College London, says he hadn’t planned to take over the bank so soon, returning after his father died of a heart attack.

Since then, he has navigated the global financial crisis, the takeover of Gaza by Hamas and the fighting with Israel that followed, during which more than 1,000 Palestinians and 13 Israelis died. Israel bulldozed orange groves his grandfather had planted in northern Gaza to clear areas the Israeli Defense Forces said served as cover for rocket and mortar fire. His workers in the West Bank and Gaza mainly communicate with each other through video conferences because travel isn’t possible for most.

While it traces its history to 1960, the bank was shuttered for 14 years. When the Israeli army entered Gaza in 1967, his grandfather was ordered to change the name to anything without the word Palestine, Shawa says. He refused and the bank was closed, its sign covered in black paint. It reopened in 1981, after a legal fight; Shawa moved the headquarters from Gaza to the West Bank in 2007.

Now the bank has 45 branches in the territories; Arab Bank has 23. Shareholders include HSBC and the International Finance Corp., a unit of the World Bank, which has a 5 percent stake. Shawa’s grandmother Mahdiya owns 6.3 percent.

Bernardita Shawa says her husband’s commitment to hiring women will benefit the bank, and the territories’ development.

“The more women there are in the bank, the more men will accept them,” she says. “The world is moving towards gender equality. You can’t avoid it.”