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The travelling banker

A steep learning curve”, is how Rick Pudner, CEO of Emirates Bank, describes his five-month tenure at the helm of Emirates Bank.

“People talk about the 100-day honeymoon period for CEOs – you’ve got to come in, do your homework, get to know as many members of staff as possible, bond with senior management and get the team working as your team,” he adds.
But for the silver-haired banking veteran, since taking up his post at the bank from his role as CEO of HSBC in Korea, it has been anything but a honeymoon.

Like many Emirati companies, the bank suffered poor Q2 results thanks largely to a downward trend in financial markets, a lack of Initital Public Offering (IPO) activity and a decline in the equity markets.

Added to this was the pressure of joining the huge business as an outsider, and, crucially, succeeding the 15-year reign of Arab national Anis Al Jallaf, at a time when the finance house had enjoyed record-breaking 2005 profits.

 Under PressureDespite the obvious pressure however, Pudner remains and unfazed by the task ahead and is relishing the challenge of spearheading the Emirati institution.

“It’s always interesting to come into a situation where the bank is in profit - there was a lot of pressure there to keep things continuing on the same lines that we have been going for the past few years,” he admits.

And he insists that the poor Q2 results - that saw April to June profits plummet to AED 368.69 million (US $100 million) compared to AED 442.35 million (US $120 million) in 2005 – were market driven and have not increased the weight boardroom pressure on his shoulders.

“Realistically, everybody could see that the second quarter results were affected by the market situation and was not unique to Emirates Bank, and this was very much due to macroeconomic factors,” he says.

The results of Pudner’s UAE banking rivals would certainly suggest that market forces were at play and not poor management.

Mashreqbank, for example, reported a 21.3% drop in Q2 2006 with profits falling to AED 318 million (US $86.6 million) compared to AED 404 million (US $110 million) the previous year, while the Commercial Bank of Dubai suffered a 56% drop in profits between Q1 and Q2.

“Last year was a one-off in terms of capturing the opportunities through IPOs and the equity market - this year the performance of the bank is still going very well, and there is an understanding that this is the case, so there hasn’t been too much pressure from the board,” adds Pudner.

Despite the disappointing results, Emirates Bank recorded a 36% growth in profit for the first half of the year taking AED 971 million (US $264 million) compared to AED 712 million (US $194 million) for the same period last year.

Total assets for the group reached AED 72.4 billion by the June 30 2006, an increase of 36% for the same period in 2005.

The Emirates Bank CEO - who enjoyed a 24-year banking career with HSBC that has taken in the UK, UAE and most recently Korea, where he held the position of CEO - would savour the opportunity to see out his career with Emirates Bank.

“I would like to stay here as long as they [Emirates bank] want to keep me here – this is an exiting role, the challenges ahead are interesting in terms of IT Alert At a recent IT-security conference in Las Vegas (US), experts proved it is now possible for computer hackers to steal personal information from computers with wireless capabilities even when they are offline.

Hackers have the means to drop what is known as a ‘root kit’ into laptops while they are being used in public places such as cafés and airports, and can then gain access to sensitive files and passwords.

With the internet fast becoming the most popular means of accessing personal banking details, this must surely alert institutions such as Emirates Bank to the ongoing need to constantly monitor and strengthen online security measures.

Pudner says Emirates Bank is “absolutely 100% focused on internet security”, and it is something the bank “continuously monitors”.

“It’s vital to our reputation that we maintain that rigour and standard of security.

ATMs are a classic case here.

There have been cases in the past and there will be cases going forward of sophisticated hackers trying to get into financial systems and so we employ a lot of people to make our ATM security as good as anybody’s in the market,” he says.

While security is perhaps the most immediate concern surrounding the development of internet banking, another is that as face-to-face banking declines in popularity, banking itself is becoming more impersonal which makes Pudner’s job of retaining customers all the more difficult.

“People don’t want to stand in queues in branches just to speak to someone.

The technology that has been developed has made life easier for customers, so the trick is then how do you combine the technology of the interface and still stimulate more face-to-face contact with the bank?”

But Pudner maintains that face-to-face banking will survive the meteoric rise of Pudner: “Everybody could see that the second quarter results were affected by the market situation.”Regional FocusHaving worked in Dubai for HSBC Middle East between 1998 and 2003, Pudner is certainly no stranger to the region.

As a man who remembers the days when Dubai was more blueprint than reality, he admits that he has been taken aback by the rate of its development.

“The change of Dubai has been phenomenal.

I personally think the two most exciting parts of the world to work in are Dubai and Shanghai.

They are the places to be.

“There has also been a continual evolution in the UAE in terms of the sophistication of the banking industry and I’m sure that will continue to move forward.

I think the standard and structure of the financial industry has improved immensely and I see that continuing for some time to come,” he adds.

So, for the man who admits that in his short time at Emirates Bank he has strived to understand how all the group’s subsidiaries fit together and get his “head around everything that’s going on”, what does the future hold?

“Our future in the UAE is pretty dynamic as the population continues to increase, with new communities setting up all the time, but I think, like a lot of banks, we need to start following our customers around the GCC and the rest of the region because there are huge amounts of investment emanating from the UAE.

So, we need to follow those customer flows,” he says.

In following his growing list of customers across the region, the well-travelled chief executive officer could see a lot more of the Middle East than the UAE in the years to come.

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