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Sun 28 Oct 2007 05:27 PM

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Banking and finance

Region's banking leaders on how financial markets will develop in the future and the direction the industry needs to take.

The region's banking leaders talk about how the financial markets will develop in the future and what direction the industry needs to take.

Ala'a Eraiqat
Abu Dhabi Commercial Bank (ADCB)

Quality customer service is paramount; giving back to the community is important; risk can be minimised through diversification.

What sets you apart from other banks?

Many different things. Firstly, everyone likes to be distinguished from a service perspective but for us the true difference is what we call the "customer experience". This is what we build all our processes around. It starts from marketing material that you read and see - whether it is in a newspaper, on the radio or on a billboard and then channeled through our highly-trained sales force. We have one of the largest direct sales forces on the market; we have approximately 600 employees in the UAE alone. Then comes the aftersale process and experience, which is supported by our great network of 43 branches.

The ADCB brand was also recognised through an independent market study as being the most valuable bank brand in the UAE.

We also have a great focus and emphasis on alternative channels, so we have a call centre which receives in excess of 500,000 calls every month and we have internet banking with almost 50,000 active users and state of the art SMS banking. It is not only alert services, it is actually proactive and reactive - what you call ‘push sms' - and we have in excess of 45,000 users there.

We benchmark by monitoring the customer experience. We monitor and strictly adhere to timelines, turn around times from receiving the debit card, receiving the cheque book, getting all the services done. Literally you can have all the services done without going to a branch, but if you do choose to go you will receive the same level of service in all of them.

The customer experience is what we truly believe sets ADCB apart from the competition today and this has been achieved through ongoing investment in high quality staff training and development. ADCB was awarded Best Bank in the UAE 2007 by Euromoney.

What is your strategy to get the brand embedded in the public awareness?

The brand strategy is implemented at many levels across various touch points, from the advertising one sees in the media, to the direct marketing communication we do to our existing customers, to the way in which our staff serve customers and prospective customers - it is all part of the brand experience which is part of the overall customer experience I had mentioned earlier. In terms of public awareness, our strategy is to deliver the best products through a compelling message in a consistent fashion. We target our messages to appropriate segments and then measure the effectiveness of that message through our own response models.

Put simply, we ‘plan, do and then review', which means we continually learn and improve over time. We are all very proud of the ADCB brand and this has not gone unnoticed. Our achievements include numerous industry awards including the coveted and well respected Banker Middle East (Best Marketing and Advertising 2007), and Gulf Marketing Review (Best New Product Launch) awards. The ADCB brand was also recognized through an independent market study as being the most valuable bank brand in the UAE, and the fourth across all brand names in the UAE; the first was Emirates Airline, second Emaar, third Etisalat and then ADCB; which is a significant achievement for a brand that is just 3 years old.

How do you choose your sponsorship? How important is CSR?

We have a very active sponsorship committee with a dedicated strategy and our sponsorship comes from different angles. We have sports activities sponsorship, for instance we were the sponsors for Al Ain club for three years. We also have event sponsorship, so conferences and specialized professional forums, whatever fits in our exposure needs and where we want to be.

For example, we do not advertise or market corporate and treasury businesses, those come through the direct sponsorship of relevant events. We also recognize the need to be a contributor to the community and have been one of the biggest in terms of donations. We were a Diamond Sponsor to the Emirates Foundation, which is an education trust.

Only last month we sponsored INSEAD university, they opened their international branch in Abu Dhabi and we sponsored a faculty chair for life. Plus other smaller contributions towards charities and specific needs organizations.

What are your plans for expansion?

We do have plans on the international stage although maybe not necessarily through establishing branches. We do have two branches in India and we are looking at what would be the best strategy for expansion there. We are looking at alternative areas through joint ventures or acquisitions.

We are very active in looking at the market through segments. We started on the very basic segments which every bank goes to; which is corporate, small to medium sized enterprises, retail and Excellency, the mass affluent segment. Then, within retail and within Excellency and within corporate, we started to look at microsegmentation. It might not be very visible but this is the way we go toward providing the right service to the customer.

The last thing you would want is to spend a lot of money on propositions that are not really appreciated by the customer. That would achieve nothing. So we do a lot of customer feedback through independent organizations. In order to achieve that we researched for a full three years then restructured the bank, so we have data and consumer feedback for three consecutive years. Now we are trying to address every single gap or requirement that customers told us they would value.

The Asian Banker Award for Excellence in Retail Banking Strategy and Execution in Asia Pacific & Gulf clearly demonstrates our policy in following strategy review systems in order actively measure our customer requirements and satisfaction.

We look at criticism and we look at positive points and we match it from a capability, priority and cost perspective. At the end of the day we have shareholders to look after too. This is the biggest challenge; striking the balance between what your customers would want and what you can give them. The customer might want everything but in reality they really appreciate what you can give them that nobody else can.

That brings us to Excellency Wealth Management. Excellency targets a very niche kind of customer. We define them as successful individuals with balances that they can keep with the bank; either invested or savings accounts. We know from experience that this segment can be very profitable to the business but demands certain requirements. We built a fully comprehensive value proposition on these requirements. It varies from banking requirements which they expect - service, efficiency, a good distribution network and competent people to deal with them - and there are also what you call ‘lifestyle benefits'. These are what you would associate with a first class airline cabin or similar. Today we have a international concierge service and a dedicated ‘800' number. Every customer has a relationship manager, which we feel is the biggest advantage. We recruit and train and retain relationship managers of the highest caliber. Usually you need to be a customer of a private banking platform of an international bank to get that level of competency.

How do you guard against market risks?

We need to guard our customers against all risk. Markets will always go up or down, so risk is a fact of life and has to be understood, there is no such thing as a risk free investment.

This risk could be liquidity risk (I could be investing in a great investment but I cannot liquidate it when I want to), there are also currency risks, and of course the underlying investment risk itself. We try very hard to avoid that in the "old-fashioned" mathematical way through diversification. This has proven to be the only consistent strategy that will work for anyone.

We also have a very detailed questionnaire to understand the customer requirement. You can do all the diversification you want but if you put the investment on a five-year time rise and the customer needs his money in two years time, it does not work. So it all is driven by the customer. We are not brokers so we do not advise the customer to go through this investment instead of that.

We help them make the decision and make sure that at the end of the day they understand the recommendation that they need to diversify into funds. Funds, by nature, being less risky than direct equity. We also look at capital guarantee for the customer depending on their risk tolerance and we tell them what sectors and what group of funds they need to be in. The actual selection of the individual fund or product will be the customer's choice, we'll just guide them to that.

That is why we follow an ‘open architecture' strategy. For every fund we offer, we have to have at least one or two alternatives. That is including our funds. So, for example, ADCB, have a proprietary fund for local equities. We offer this to our clients, but we also offer at least one other fund that is not managed by us - so our relationship managers are truly on the side of the customer.

That is how we gain the respect of our customers. In the same way, our fund is being offered by other banks who follow the open architect strategy to their customers. We feel this is the right way, to get the customer to feel that the ultimate decision is to be made by him.

Mission StatementOur Mission

To build a partnership with our customers that lasts a lifetime by:

1. treating every customer as an individual;

2. offering innovative products and unparalleled service;

3. never forgetting that our customer has a choice.

Our Vision

To be the number one bank of choice in the UAE. A constantly innovating, financially successful organisation of the highest integrity, respected by our customers, by our competitors and by the community.

Colin Macdonald
ABN Amro

The Middle East is a very important region for us; we use our advantages as a global bank and tailor that expertise to the local market; we want to triple our profitability over five years.

How does the region compare to the global market?

From ABN Amro's perspective it is a very important region globally in a number of senses. We have been present in the region for a long time and have a firmly established business here. We are part of the Asia region and we are one of the four main growth countries in Asia (the UAE being one and Pakistan, India and China being the other three) so it's classed as an important part of the world for the bank.

We have the name and reputation in the market and that helps us generate business, whether it’s in the retail side or the investment banking side.

I think that reflects the global view of this region in general in the sense that we are seeing a lot of inflow investment, i.e. companies coming into the region, but also a lot of outflow and we frequently see companies from the region investing in the likes of Europe and Asia in particular. This reflects our own profile since we are strong in Europe and strong in Asia. Therefore we as a bank, and I personally, see it as an important region in the world, for now and for the future.

How does your established presence in the region help you to stay at the forefront of your field?

We've been here 33 years now and we are a full service bank with an established presence as well as continued growth. I think we're one of probably four in the UAE who can say that we've been here with a growing full service organisation for that period of time. Some have been here longer but the four main established foreign banks have been here a long time. How does it help us over others? We have the name and reputation in the market and that helps us generate business, whether it's in the retail side or the investment banking side.

In what way do you seek to balance your international presence with a tailored local response to financial needs?

I think we have the advantage of being part of a global bank. We can apply a lot of the knowledge gained elsewhere to the region, whether in terms of products or how we cover clients or how we originate business. We apply that knowledge and use the resources at our disposal that being global affords us; we import expertise and then tailor that expertise to the local circumstances.

So we have the combination of having those resources available (which not many institutions have) and the local knowledge (having been on the ground for over three decades), allowing us to adjust the product accordingly. Hence we have a business development process which is country outwards and then a business growth process which is regional inwards.

How have strategies changed in the last 5 years?

There have been a number of key changes. Our strategy has changed in retail banking in particular; if you go back 6 years we did not have a retail presence in the country. The bank spotted that opportunity and has actually gone about developing a significant retail business over that period of time. That has been grown with the growth and development of the country as well. So as we have seen the population grow, investments happen and the sophistication of the retail banking business increase, we've simultaneously grown our business.

On the private banking side it's exactly the same; there's more opportunity so we've grown our business and been much more focused in developing this side of the business. Equally, on the commercial and wholesale side, we've changed strategy with the change in the market.

The difference in the business is significant as there is much more use of capital markets and there is much more use of risk management product. Therefore we are turning what was a ‘fly in and out' resource 5 years ago into an ‘on the ground' presence and using our hubs to support and grow that presence, particularly on the investment banking and risk management side.

What is the strategy to increase market share and brand awareness?

The strategy of market share is to further develop our businesses and grow them in a way which will increase market share. In some areas you don't want the market share, of course, you may want profitability.

On the retail side we will continue to be innovative with credit cards: we will introduce a number of credit cards products in the coming years. We have just launched the first NRI (non-resident Indian) card in the country and we will continue these innovations in credit cards as it is a principle part of our retail business. We are looking quite carefully at Islamic products as well, and really expanding our product range.

On the commercial and wholesale side, we expand our knowledge on the ground and will continue to do so. We are always increasing our understanding of the clients and what they want as they migrate into the more sophisticated use of risk management products, capital raising, international market usage or M&A, all of which are important expansion areas for us. We have got specific people on the ground to deliver those services to the client.

Our strategy is really to identify a growing opportunity, get the right expertise in and develop a product to expand our business with that opportunity.

Do you have any unfulfilled ambitions for the group?

I have plenty! The CEO of Asia set a goal of tripling the business over five years and we have locally mapped that ambition onto our own plans for the next five year period. I should think that we'll achieve that ambition easily; our business is already growing at a greater rate, in percentage terms.

If you extrapolate the maths, we will see in excess of threefold growth. We have set out a number of initiatives to achieve this including the expansion of our retail business, increasing our physical presence in the UAE, looking at other markets within the GCC, more products, more expertise on the ground etc.

These are our ambitions in terms of growing the business.

What is the most challenging part of job?

There are three points: managing growth, finding human talent and competition. The first, managing growth, is a challenge that we continually face. We are expanding on all fronts and expanding people numbers as well so management is crucial to get it right operationally at the same time as developing revenue and profitability.

The next issue is the people challenge because that is one that we will also continually face. As we expand our people numbers in a market where many other institutions are doing the same thing, the quest for talent is and shall remain high, so we constantly compete for good resources. It comes as a challenge to keep developing the people and expertise that we already have. We do that by hiring, by retaining people and by training and career developing people.

Of course, the last issue is the competition. We've been here a long time many institutions are spotting the opportunities which exist here. To combat this we are increasing our presence in the country and becoming more competitive as a consequence. Many of the local banks are growing and developing strongly as well. So competition is coming from a number of angles: new entrants or expanding presence by some companies and local banks too.

But they are nice challenges; it is great to be in a market which is growing so fast with so many opportunities for the industry!

What are the core values that guide your business decisions?

Our core values as a bank are team work, professionalism, integrity and respect. They are the values that we manage our business by and are present throughout the organisation. All of them are especially valid in my business experience; without them you couldn't actually be competitive.
Saber Daboussi
ACM Middle East and Asia

The foreign exchange market has undergone a tremendous change in the last ten years; technology has made investment more feasible; understanding regional and local cultures is key for success.

Ttell us about ACM and your successes to date.

ACM was set up in Geneva, Switzerland in 2002 and had forgone a tremendous success story over the course of the years through the web based platform. ACM developed from catering for retail clients alone to leading banks and financial institutions worldwide in a short span of time.

Continuous research and internal development has allowed us to reach turnover volumes of $100bn a month. The security of the Swiss banking and financial authorities further supported the credibility of ACM for investors.

How does the region compare to the rest of the global market?

The advancements in technology and the progression of companies such as ACM have made this investment more feasible, efficient and cost effective than has previously been possible.

The global FX and commodity market have been growing at a tremendous pace over the course of the last decade, and the Middle East region has been following the same pattern of growth, further supported by the increase in investments and economic growth throughout many economies in the Middle East.

How has the foreign exchange market changed in recent years?

The foreign exchange market has been around for decades, however over the course of the last ten years the market has undergone a tremendous change.

Coinciding with the developments in the technology sector, the FX and commodity market have been able to open its doors to a more diverse market, upon doing so the market has become widely available not only to governments, banks and multinationals but to the regular retail investor.

How have strategies changed in the last five years in response to that change?

Companies, Fund managers, and retail investors have started to adapt their portfolios by including such a trading tool. The investment possibilities have become more attractive and profit opportunities more widely available.

The advancements in technology and the progression of companies such as ACM have made this investment more feasible, efficient and cost effective than has previously been possible.

How do you ensure the transparency so fundamental in your business concepts?

All markets are difficult to analyse. Therefore a trader always needs the best tools at hand when trading the market and this is what we provide our clients. This is further emphasised by the EuroMarket 500 award we have won for the best FX platform as well as the ISO 27001 certificate we achieved.

The ISO 27001 is awarded to companies that provide security and confidentiality to the highest standard, and we are the only FX broker worldwide to achieve this certificate. This further ensures that we offer our clients the best facilities with the highest standards.

What is the strategy to increase market share and brand awareness? How do you differentiate yourselves from competitors?

We are the only specialised multinational FX and commodities online trading broker in the region. We stand by offering Swiss trading standard in the Middle East, ensuring the highest standards are offered to clients in the Arabic language backed up by Arabic customer and technical support.

We also differentiate ourselves by offering investors the opportunity of trading under Islamic trading conditions, this facility only being available through our Middle East and Asia office.

As ACM, we stand by being aggressive in our business nature, we promote our brand in a similar way.

Furthermore, understanding the regional and local culture is a key success factor for ACM. We have adapted our international trading best practices to the regional business culture and that of our partners, and this combination has yielded mutual success and credibility.

ACM is the FX and commodities leader in the region; therefore it is our responsibility to ensure that the industry is promoted in the best possible and most professional way. It is our duty not only to offer the best products but to support them with knowledge and information. We are continuously contributing information and holding seminars to educate our clients and market participants.

How will your recent agreements and partnerships be of benefit to your business?

The white label solution we offer to banks and financial institutions has given us more direct access to markets. We work hand in hand with our partners (banks and financial institutions) in order to offer them our product under their name: in turn our partners are able to diversify the products available to their clients.

The development and set up of trading platforms takes a lot of time and effort, therefore our partners are able to benefit from our award winning products and market expertise without having to incur the cost, both from a monetary and time perspective, in developing their own.

Do you have any upcoming launches/projects?

We are continuously expanding and developing ourselves. We believe that research and development is essential in such a young market. In order to trade efficiently, traders require the most efficient and up to date technologies. We are one of the only companies in this market with proprietary trading software to this end and we are continuously working to improve it.

We introduced our HTML and WAP trading platforms recently, we will also be introducing options and futures in the coming months through the Dubai office as well as a vast array of tradable products through our headquarters in the near future.

What are the main differences when doing business here compared to other markets?

The GCC is a fast growing and highly liquid market. The development of the local stock market over the last decade has helped create the awareness of the extent of income generated from trading the markets. The local markets are not as attractive as they were over a year ago; investors are now looking for alternative and diverse products to trade. This, in turn, has allowed a natural path for FX and commodities to enter the market.

Do you have any unfulfilled ambitions for the group?

We always have our sites on expanding ourselves further. We are currently working on developing in the same aggressive manner to the Far East. Our aim is to concrete our position as the largest online FX and commodities brokerage company in the Middle East and Asian market in the coming years.

Why did you choose to expand into the Middle East?

The potential of the Middle East is widely visible and we therefore decided to set up our Dubai office in 2005. Our client portfolio has increased by approximately 400% since we were established; this is a good indicator of the tremendous growth the industry has been enjoying in this market.

Our next step is targeting the Asian markets, where commodity trading is highly attractive to investors. We are looking to use the template of our success in the Middle East as we tap into the Asian market.

Where will you be Expanding next?

A: We are also looking to establish our New York office before the end of the year. This will be the fourth branch of ACM, complementing our Headquarters in Geneva and regional offices in Dubai and Montevideo (Uruguay). Further increasing the width of ACM's client base worldwide.

Editor noteACM was founded in 2002 by three Swiss business partners and friends- Alexandre Axarlis, Nicholas Bang and Lloyd la Marca. A start-up company based on a simple yet ingenious formula: an on -line Forex platform offering clients transparency, low margins and simplicity of use. With a site that has worldwide reach and is translated into 15 different languages, this on-line Forex and commodities brokerage has managed to rapidly differentiate itself from competition. ACM now boasts transaction volumes that average at US$100bn per month and the site receive between 50- 60,000 visitors per day.

ACM has a regional office in Dubai and in Montevideo (Uruguay) and is planning to open in New York by the end of 2007.

Stuart Pearce
Qatar Financial Centre Authority

The Middle East economy is becoming increasingly attractive to foreign investors; we provide a stable business and legal environment for these investors, and the Qatari government is investing heavily in improving the economic environment.

How does the region compare to the rest of the global market?

The reason that the Qatar Financial Centre and other financial centres in the region were established was to capitalise on the opportunities that exist because of the increasing wealth and accelerating economic growth that is taking place here. Our research over the last two years has shown that the Middle East is factoring increasingly into the business plans of major financial institutions around the world. We believe that a sustainable and dynamic economy such as Qatar's, combined with a world class business and legal environment, is a very attractive proposition for such firms, and this is exactly what we are seeing translated into applications for licences to operate through the QFC.

Our research over the last two years has shown that the Middle East is factoring increasingly into the business plans of major financial institutions around the world.

Does the current strength of the Qatar economy make the region an unpredictable business environment or merely a more dynamic one?

The strength of Qatar's economy is of course a magnet for financial and other businesses to come and participate in the country's major investment and development programme. When we talk to firms who are interested in doing so, we make it clear that not only is Qatar's economy blessed with a real asset in the form of its natural gas, but also, because of what we have built in the QFC, it represents a strong base from which to trade into the region as a whole. Our job, and I would say that of the other regional financial centres, is to reduce any unpredictability of doing business in this region. We provide prospective companies with a wide range of data to help them put their business plans together, and we are able to handle all their enquiries because of our relationships with the government and business sectors in Qatar.

What potential do you see in the Gulf financial sector at the present time?

The prospects are very bright indeed. The increasing wealth of the region and the clear objectives of governments to channel that wealth into over US$1 trillion worth of infrastructural and other projects make this perhaps the most opportune time for international firms to commit to the region.

What is the strategy to increase international investment in the Middle East?

In Qatar the government has committed itself to over US$130b worth of investment in a wide range of projects across the economy. A little over half of this is in the hydrocarbons sector, but tens of billions of US$s are going into transport, health, education and leisure. Because the wealth of the region is staying in the region, to a larger extent there is greater demand for investment instruments and funds to be created locally and this is supporting a move by governments in the region to stimulate a more sophisticated capital market. International banks and financial institutions are very keen to support this process.

How does your organisation assist in stabilising the local market for foreign investors? What specific advantages do you have?

The main contribution the QFC is making to strengthening the local market for foreign and local investors is to create a world class business and financial environment that firms establishing in and investing in Qatar will find both familiar and reliable.

The QFC Regulatory Authority will only authorise firms which have been able to demonstrate that they can comply with the stringent obligations and conditions that a QFC licence requires.

However, I would say that our main advantage is the strength of the Qatari economy, coupled with the determination of the Qatari government to create a dynamic and sustainable industrialised economy, and to provide for their future generations.

How is the Qatar business environment of mutual benefit to both yourselves and foreign businesses?

The role of the QFC is not only to bring in world class financial institutions to support the development of Qatar's financial sector, but also to raise the standards of finance in the economy as a whole, to generate more employment in this sector, and to encourage partnerships with Qatari institutions. There is a lot of scope for mutual benefit.

Do you have any upcoming launches/projects?

We have many initiatives in the pipeline. Those that I am able to mention at the moment are a Financial Knowledge Centre, to bring institutions to Qatar that offer qualifications and accreditation to those working in the financial sector; Qatar Finance - the Ultimate Resource, which is a major publishing initiative with Bloomsbury Publishing of the UK (Encarta, Who's Who, Schott's, Harry Potter) which will provide a database of financial knowledge to the world of business, to academics, students and the media; and a number of events with such leading names as the Financial Times, the Economist, Institutional Investor, Chatham House and Euromoney.

Do you have any unfulfilled ambitions for the group?

No. The QFC Authority has beaten all expectations after two years of operation, in terms of firms licensed, the infrastructure we have put in place (both physical as well as legal and operational) and the financial segments and geographies we have now encompassed.

Indeed, we are now having to reassess our expectations for the next two years to take into account a much broader remit for the QFC Authority.
Colin Plowman
Al Ahli Bank of Kuwait

Safeguard the business from external risks; go the extra mile for the customer; the challenge is turning a diverse group of people into a highly performing team.

How long have you been in the region? Where are you planning to expand?

ABK has a long history in the region - this year marks our 40th anniversary. We already have a branch in Dubai and we are planning further expansion across the region into other markets like Abu Dhabi and Qatar.

What key strategic alliances have you forged with financial partners?

We work with other financial institutions on a wide variety of initiatives - for example, we have a tie up with Skywards in our credit card business.

Our aim is to build a business which thrives regardless of what is going on in external markets.

How do you safeguard yourself against market fluctuations?

By having a diversified risk portfolio so that effectively we do not put all our eggs in one basket. Our aim is to build a business which thrives regardless of what is going on in external markets - primarily this is a customer-focused business.

How have strategies changed in the last 5 years?

We have become much more value-focused and see enormous opportunities in wealth management, consumer and expatriate banking. We now have an investment company subsidiary to extend the value chain in our corporate and consumer business.

What is the strategy to increase market share and brand awareness?

We are concentrating on key value-creating segments and developing our propositions to meet customer needs. Our brand is currently being reviewed as we reposition ourselves to appeal to a younger market segment.

How do you differentiate yourself from your competitors?

Through customer service - there is a wide convergence on product offerings but we are looking to go the extra mile for our customers in terms of service.

For example, during the hot summer months our customers were offered cold towels and ice creams in all our branches to help them cool down. These are small things but they mean a lot to our customers and set us apart in the market.

Do you have any upcoming launches/projects?

Yes, I already mentioned our regional expansion plans - we are also opening new branches in Kuwait, extending our ATM network and expanding our product range so that we can compete more effectively.

Do you have any unfulfilled ambitions for the group?

Yes, I think that ABK has the potential to become one of the top three banks in Kuwait and a leading financial institution in the region.

What is the most challenging part of the job?

Managing the widely diversified group of people here at ABK and turning them into a high performing team - it is also the most enjoyable part of my job!
Dr Henry Azzam
Deutsche Bank

The growth of the Middle East at present is unprecedented; an upgrade in standards leave the bank better placed to survive market volatility and uncertainty; there are strong possibilities for Islamic banking; a good reputation is of the utmost importance.

How long have you been in the region?

I started working in the region in the early 80s, first with the Arab Fund in Kuwait, then in Bahrain (1983 - 1990) with Gulf International Bank and later on Jeddah, Saudi Arabia (1991-2000) with the National Commercial Bank. I then established a small investment bank, Amwal Invest, in Amman, Jordan.

Our region is vastly benefiting from the experience of the entire DB Group and, in many instances, the experience acquired in the Asia Pacific.

I have also served as a board member and then as the chairman of Dubai International Financial Exchange (2004 / June 2007).

Deutsche Bank itself has been in expansion mode in the Middle East region, with five new entities established in four new countries over the past two years. As such, our region is vastly benefiting from the experience of the entire DB Group and, in many instances, the experience acquired in the Asia Pacific a couple of years earlier.

How do you see the regional economies developing over the next decade and how does this affect your ongoing strategy?

The region is going through a period of growth and prosperity unprecedented in its recent history. GCC holds 40% of World Oil Reserve and will increase production to 20mb/b (2010) up from 16mb/b (2006). The Gulf countries also hold 20% of World Gas Reserves and will boost production from 7% to 12% of world total.

With higher oil prices and oil revenues, government budgets remain expansionary, with annual expenditures growing by 10% - 15% across the GCC. Infrastructural projects worth US$1200b have already been announced.

On top of existing US$1.2 trillion foreign Assets, GCC surplus reached US$236b last year which was larger than China & Japan. Interest Rates have hit a ceiling and outlook for domestic and dollar rates is slightly lower; i.e. an expansionary monetary policy as well.

Although inflation in 2006 was high in the UAE (9.9%), Qatar (8.0%), Egypt (9.5%), and Jordan (6.2%), it is likely to drop as supply bottlenecks in the housing markets ease in the coming two years.

Non-oil Arab Countries will benefit from GCC booming economic conditions through higher remittances, regional tourism, exports, capital inflows seeking investments.

Private equity funds are being established to invest in the region such as: Carlyle, Blackstone, Abraaj Capital, Invest Corp., Global, EFG, Shuaa Capital.

How does the recent Standard & Poors upgrade to AA status demonstrate the group's global standards and how do you guarantee them across your international operations?

Standard & Poor's commented that the upgrade would reflect major and sustained improvements in Deutsche Bank's operating performance across all business lines and in its credit and market risk profile. These structural improvements will leave Deutsche Bank well-positioned to withstand a more challenging environment of increased volatility and market uncertainty.

How have strategies changed in the last five years?

In the last five years Deutsche Bank has pursued a management agenda with a clearly focused strategy. Following the successful completion of the first two phases, we reviewed our strategic options last year with a clear result: the course we have taken is correct; we are on the right track. We do not see any reason to change anything fundamental in our strategy. Phase 3 of our management agenda is therefore evolutionary, rather than revolutionary. It consistently follows through on our previous strategy.

Our primary focus is now on leveraging our global platform for accelerated growth. Our business strategy comprises four key elements:

First: we will continue to maintain our cost, risk, capital and regulatory discipline.

Second: we will continue to invest in our core businesses. We intend to grow through both organic growth and selected bolt-on acquisitions.

Third: we will continue to expand Global Transaction Banking and Private Clients and Asset Management, businesses which deliver stable contributions to earnings.

Fourth: we will further leverage our growth opportunities, building on our competitive edge in investment banking.

Which side of the business has experienced most growth and are you concentrating on private asset and wealth management or corporate accounts?

We have already created a world-leading investment banking platform. Now we aim to accelerate growth in Global Transaction Banking, Asset and Wealth Management, and Private & Business Clients. These businesses are highly valued by the capital markets and rating agencies, since they are seen as delivering stable contributions to earnings. Growing these businesses should therefore have a positive impact on Deutsche Bank's share price and credit rating.

Do you take advantage of Islamic financial systems and how do you use these to provide the best innovative financial services to your customers?

We are at the forefront of Islamic Finance and always coming up with innovative products and new structures that are well received by our customers. Given that demand for Islamic bonds has risen as petrodollars have flooded the GCC, we continue to see strong potential for the Sukuk market. UAE-based companies appear to be leading the way while Saudi and Bahrain-based companies are catching up.

According to Moody's, global outstanding Sukuk issuance totalled around US$82.2b up to the end of July 2007. More than 30% of the issuers of the outstanding Sukuk are Gulf-based. Western investors have made up about 70-80% of the buyers of Sukuk issued in the Middle East thus far in 2007, as compared to about 20-40% last year. We expect continued strong demand for Sukuk.

How does your wealth of international experience and pan-geographic location and expertise help you in the regional market?

We have 10 legal entities spread over 7 countries, with less than 200 employees throughout the region, and source a substantial portion of our business and infrastructure support from all across the globe.

We can only achieve this by horizontal connection of all our business lines and entities, e.g. in our MENA ExCo, and Country Committee. We further guarantee vertical connection by means of our MENA Operating Committee in which all global and local support functions liaise with the businesses on ground.

We protect the reputation of our bank by implementing clear rules, policies and procedures to guarantee integrity, and to provide the necessary Compliance and Legal resources to monitor this. Our Regional Executive committee is the most senior escalation point for reputational risk issues.

Finally, we have implemented and tested an efficient Crisis Management framework, which is crucial to give employees, clients, and stakeholders the necessary comfort to operate in this region.

Regional Management has been managing the implementation of most country growth initiatives across the region, including the establishment of our Riyadh Branch, the establishment of Doha (QFC) Branch, and the establishment Deutsche Securities in Saudi Arabia. We are currently developing a regional strategy which will identify the best approach towards further opportunities for our businesses.

How do you handle governance in the region?

We have established the MENA Executive Committee in our regional hub in Dubai, as the centrepiece of governance executed on the highest level of business heads throughout the region. The MENA ExCo (which I chair) receives all critical information and acts efficiently to handle any governance related matter efficiently. To facilitate efficient resolution of operational issues, the MENA ExCo has delegated tasks down to the Operating Committee, and the Asset Liability Committee.

Finally, to foster regional integration, we established the Regional Country Committee, which connects on a quarterly basis the Regional Business Heads and the Chief Country Officers across the region.

Do you have an upcoming projects or launches?

Egypt is a very promising market for us and we are keen to develop our business franchise there. We are already active in Egypt through our representative office in Cairo but we would like to enhance our competitive positions and grow our investment banking business.

Do you have any unfulfilled ambitions for the group?

Our global franchise is outstanding, with presence in all major markets and in the important growth regions of the world. But I hope and will work hard to strengthen our market position in the Middle East to offer our domestic and global services to more customers in this dynamic region.
R. Seetharaman
Doha Bank

The GCC economy has been transformed; our diversification strategy has been in line with market needs; we are taking steps to expand internationally using strategic hubs.

How does the region compare to the rest of the global market?

GCC region is one of the fastest growing regions in the world today with about 20% GDP growth. With increasing energy demand as well as prices, GCC countries have been able to consistently generate considerable fiscal surplus consistently. GCC has been prudently deploying the surpluses towards multi sector development that has changed the face of the region completely during last two decades.

With the increasing degree of openness in investment, trade and commerce policies, rapid pace of modernization and infrastructure development and private sector role enlargement, GCC economy has completely transformed. Today GCC is competing very favorably as an attractive investment destination. GCC economic transformation has been a role model.

On social front too, all important indicators such as healthcare system, literacy rate, women's' participation in governance indicate steady improvement resulting in significant transformation.

With the increasing degree of openness in investment, trade and commerce policies, rapid pace of modernization and infrastrucure development with the enlargement of the role of the private sector, GCC economy has completely transformed.

As far as the Banking environment, it is highly mature in terms of corporate governance, regulatory framework, business competition, integration with macro economics and technology adoption. In all domains of banking and finance we compare vary favourably with the developed economies elsewhere in the world. We provide a one-stop financial service solution to customers for all their conceivable finance needs, such as loans, deposits, credit cards, investment, insurance, remittance etc. In terms of technology deployment, we are second-to-none and our consumers use the different channels, such as ATM, Cash deposit, SMS banking, Mobile, Internet etc. extensively.

How have strategies changed in the last 5 years?

With economic expansion, the strategy of banks will naturally align to the direction pursued by the country. Our diversification strategy has been in line with market needs. As Qatar economy expands, both retail and corporate segments are expanding.

There is strong influx of professionals and a skilled work force. The multi-sector growth is creating new business opportunities; with increasing international trading level, global trade opportunities are increasing. Accordingly, we have created many new Strategic business units such as Commercial Vehicles & Equipment Finance, Mortgage Finance & Real Estate Services, Project Finance & Equity Advisory Services and Private Banking to cater to growing customer needs.

We have been expanding our branch network in Qatar regularly. We now have a well dispersed network of traditional branches, Islamic branches and state-of-the-art e-branches with host of self-service facilities.

An Exclusive Corporate Branch has been opened to cater to all banking needs of corporate customers. We have initiated global expansion with opening offices in countries such as Japan, China, Singapore, Turkey as they have strong trade relations with Qatar. In addition, our Dubai branch has been converted into fully fledged operations.

In what unique ways do you use technology to strengthen your services?

Technology plays a pivotal and differentiating role in our activities. We are pioneers in deploying consumer-centric technology solutions, maximizing consumer convenience. We are the first in the market to introduce technological conveniences, such as SMS banking, Internet Banking, Infovest investment portfolio tracker, online remittance, mobile banking etc.

Our real-time, straight through processing of remittance funds from Doha Bank to the beneficiary bank account in partnering banks is a unique solution. Similarly, our Bank-on-wheels takes banking facilities to remote corners of Qatar. We have been investing strategically in various consumer-centric technology solutions.

How do you blend traditional values with dynamic requirements of modern banking?

We value our relationships with passion and commitment. While continuing to innovate to global standards in terms of products, services, technology, standards and processes, we ensure that customer care is foremost.

We relate very well with our customers through many other forums. With regards to continual professional education, we consciously encourage various professional and knowledge dissemination forums.

Doha bank corporate quizzes are the most sought after events in Doha. In addition, as a responsible corporate citizen, Doha Bank proactively contributes towards social causes. We conduct annual traffic awareness and safety campaigns, in addition to participating in various charity causes. We have been organizing environmental seminars in various places on "Global warming and Climatic challenges" for spreading awareness on the issue.

With awards such as ‘Best Bank in Middle East' and ‘Arab Banker of the Year' to your name, how will you strive to maintain your high quality product and success?

We have taken very many initiatives during last four years to position ourselves as a strong Qatari entity of international repute. During last four years, we have achieved more than three fold growth in Shareholder Equity and Six fold increase in Annual Net Profit.

We have been maintaining consistently best performance ratios in the whole region. Through continuous product innovation, expansion, collaboration and customer centric approach Doha bank has moved towards becoming the first choice bank and we are fully committed to maintain our position.

What is the strategy to increase market share and brand awareness?

We have a clear road map to grow steadily both locally and internationally at strategic locations. We have identified niche segments, products and services where we will excel and become the market leader.

We are continually reviewing and enhancing our products and ensure that they always remain customers' first choice.

How do you differentiate yourself from your competitors?

Doha Bank has a track record of demonstrated and consistent success in all areas, with continuous improvement in all efficiency parameters and growth indicators - Customer Care, Performance, Innovation, Quality, Security, Technology deployment - we are consciously driving on all fronts to be the leader.

We have become a one stop financial service provider with most comprehensive range of products and services. We are BS7799, ISO 9001:2000 and ISO/IEC 20000 compliant organization, which validates our commitment to follow international best practices and standards.

How is the Qatar business environment of mutual benefit to both yourselves and foreign businesses?

Qatar has one of the fastest growing economies in the world. The rate at which different segments are growing, influx of migrant workers at all levels, intensity of economic development activities - all these clearly show the mode that Qatar is in at present.

All this incremental economic growth requires banking support - be it a corporate, projects, traders, manufacturing, exports and imports, real estate, construction, retail etc.

While the overall size is small, rate of economic growth is very high, that clearly reflects in the performance of banking sector. As far as development plans are concerned, project financing requirements for Qatar in the coming years is huge.

The participation of foreign banks for the funding needs of projects will hence complement the overall banking and financing environment.

Do you have any upcoming launches/projects?

Doha Bank is in expansion mode today with various activities taking place at different levels. We have launched our US$1b EMTN program to meet the expansion needs of the Bank, which is now listed in London Stock Exchange.

We have also concluded a highly successful International syndication arrangement for US$35m. Our presence in international hubs will help us gain leverage in expanding bilateral and multi lateral trade and commerce through these regions.

We have made a strategic investment in a Non-Banking Financial Institution in India which has a branch net work of more than 100. We have established a fully owned Insurance Company in Qatar Financial Centre.

With many new Strategic Business Units, international expansion and diversified revenue streams, we have many exciting and challenging initiatives in pipeline.
Phil Adams
MFS International

We rely on our carefully selected team of international investment banking experts; Dubai is an ideal hub because of its vision and regulation; the MFS Group have a significant presence here.

Tell us about MFS International.

The MFS International Group represents another step in the international growth of the MFS Group.

Dubai is the perfect hub for us to access the MENASA region, to respond to opportunities in most time zones and to monitor a global investment horizon.

MFS Limited is a top 150 ASX listed company, with a market capitalization of approximately US$2.1 billion and in excess of US$4.2 billion funds under management from over 50,000 investors. The Group employs over 5,000 staff worldwide and has investments in the Middle East, Oceania, Africa, Asia and Europe.

The MFS International Group is in the business of creating strategic opportunities that maximize the returns for shareholders and investors. Our main focus areas are Investment Banking and Asset & Wealth Management.

Tell us about your team.

We have a great team based in Dubai; one thing that we pride ourselves on is our ability to add commercial value. Because of this, our team is our best asset so it is vitally important that we have the right mix of staff and that our team is made up of ‘the best' and ‘the brightest'.

Our local team consists of staff from Australia, New Zealand, UK, Europe and the Middle East. Our staff are international investment banking experts who specialize in investment banking, corporate finance, M&A, and tourism & travel.

Due to our culture of success in Australia we equipped our local office with 10 highly-skilled, senior MFS employees who have relocated to Dubai. This means that the MFS culture of excellence, innovation, integrity and professionalism is embedded in our MFS International team; and we have been able to hit the ground running.

Stuart Price, the former Chief Operating Officer of the MFS Group, has also relocated to Dubai to take on the role of Chief Executive Officer of MFS International. So, as you can see, we have a very senior team here in the region. This shows our confidence in and, more importantly, our commitment to the region.

Why have you chosen to set up in Dubai?

The decision to set up in Dubai was easy. The UAE provides an appealing mix of both vision and regulation. Dubai is the perfect hub for us to access the MENASA region, to respond to opportunities in most time zones and to monitor a global investment horizon.

The UAE has a regulated market operating with a young and vibrant model, this is appealing to us. It is similar to the market and model in Australia, which is an environment we have excelled in.

Aside from this, the region is not ‘undiscovered' for the MFS Group. We already have a significant presence, owning: a large stake in the Golden Tulip Group; The Oceanis Group (who have been appointed aquarium project manager and operator in the Burj Dubai); and the Protea Hospitality Group (who have a Joint Venture with the Sharaf Group to develop a portfolio of up to 20 hotels in the Middle East).

The region is also appealing because it is undergoing rapid change; hand-in-hand with these changes come significant investment opportunities. We are fortunate to be in the position where we have not just the capital, but also the skills to embrace these opportunities.

Most importantly, we are here to look for new business opportunities in a global market. We are leveraging from our experiences in and the model used in Australia. Just as in Australia in 2000, we are starting here in Dubai almost with a clean sheet of paper.

How does the region compare to the global market? Does your existing experience of the Australasian markets help you in your aims?

The region has the vision and the desire to be one of the most important global hubs for financial and business transactions. Coupled with this, it has installed corporate and financial regulation of the highest level, which is required to create a sustainable financial hub. This makes the region a very attractive place to do business.

Economic uncertainty is visible in many regions throughout the world and many aggressive investors are now re-thinking their strategies and business models. Here, the economy is stable, and the vision of leaders and business leaders is for strong sustainable growth in the medium- to long-term. Few economies in the world could boast of the level of internal investment that this region has committed to. However, the Middle East still has some way to go in terms of establishing a diverse range of capital markets. The wealth will be delivered in time as the financial structure here attracts other major players.

MFS in Australasia has built a business model that is sustainable throughout the economic cycle. Opportunities emerge at all stages of the cycle and the smart and strong companies are able to move quickly to identify and convert these opportunities. We strongly believe MFS International is one of those companies.

MFS Limited has a substantial funds management and investment business in Australia and New Zealand, as well as significant investments throughout the Middle East, Africa, Asia and Europe. These investment successes have laid the foundations for the right investment discipline to approach a market such as MENASA. We are in no way re-inventing ourselves but rather continuing along the same path of success following the same principles and adopting the same disciplines.

How do you successfully manage investments in such a variety of sectors?

The key is to readily accept that you are not the expert in all industries or regions. Having made that observation, it is critical to partner with international experts who bring the necessary industry skills and experiences to ensure we are fully briefed on the risks of the opportunity so that we can manage them up-front.

Getting the initial investment decision right is critical, and through this due diligence process we are fully informed on the risks and opportunities before we make the decision.

And finally we overlay our investment team who bring significant international and industry experience to the decision making.

After we make an investment, we continuously monitor and remain hands-on to ensure it is achieving the desired outcome.

How have strategies changed in the last five years?

The past five years have been an exciting time for the MFS Group, as we have moved from strength to strength, but to be honest, the strategy has stayed the same since day one. Our strategy is to identify and convert opportunities that others may not see, in an efficient and effective manner, whilst always remaining true to our investment criteria and our investors.

There can often be a short-term influence on market commentators, and we received plenty of press when we invested in hotels, travel agencies and serviced apartments to name a few of our investments. We had no doubt in our mind the opportunities were right, and have been able to prove our strongest critics wrong by delivering year on year growth and a sustainable business that we are proud of.

In an emerging market such as MENASA we expect to achieve the same level of success on a much larger scale.

What is the strategy for staying ahead of the field and delivering healthy returns to your investors?

I guess it comes back to setting up a strong, highly-skilled local presence; and being committed to finding and building high-performance opportunities for the benefit of all stakeholders, in an innovative and ethical manner.

We do not apply a short-term mind-set to the opportunities and we are business partners with those investments we make. This, in my mind, is a key difference to many of our peers. We bring a commitment to the business and management team; this commitment provides the team with the confidence that we are with them for sustainable growth, not just short term profit.

What is the strategy to increase market share and brand awareness? How do you differentiate yourselves from competitors?

In many ways, the size of opportunities and the emerging market in the MENASA region allows businesses similar to ours from many jurisdictions to participate.

We know that today we are not the biggest, but we have the ambition and team to become the best. Remaining focused on what we bring to opportunities ensures we consistently deliver value.

As we know, reputation and integrity count in business relationships. We are confident as we invest in this region that the opportunities will multiply, and as long as you stay true to your core there is no expectation that this pipeline will slow down.

We bring strong credentials in a number of fields and these, amongst others, will be the cornerstone of our focus in this region. We believe we are unique in the region because of our ‘proprietary mind-set', combined with our hands-on management team, our strong management focus and our human capital commitment to the region.

Having a ‘proprietary mind-set' means that we make informed investment decisions to take acceptable risks in the pursuit of attractive returns. We invest shareholders and investors funds with the same level of care as we manage our own funds.

We apply extensive due diligence processes and international best practice measures to opportunities. However, unlike many other operators, our senior managers in the region have a hands-on management approach and make the final decisions.

We are not an aggressive investor, instead we are management focused. We believe long-term sustainable returns are created by working together. We provide corporate and capital support and work with management, who have the necessary skills and expertise.

Our commitment to the region with the investment in experienced, senior human capital sets us apart from our peers. As I said earlier, we have seen the opportunity here and now we are seeking to convert those opportunities. The only way you do that is by having people on the ground.

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