CEO interview in Durrah, December 2010 - BMI

UP CLOSE & PERSONALUP CLOSEANDPERSONALJamal Ali Al-HazeemWalks the TalkReena AbrahamBahraini banker, Jamal Ali Al-Hazeem, took over as ChiefExecutive Officer of BMI Bank in May 2010 with a commitmentto build on the bank’s strengths as well as deliveron its commitment to provide customers with uniqueand innovative financial products and services. Aftera 22-year career spanning some major highlights andwith significant stints as head of a number of financialinstitutions as well as the Bahrain Economic DevelopmentBoard, the quintessential professional looks ready totake on the new challenge.040 a Pearl of Luxury

UP CLOSE & PERSONALWe are still a young organization. We have the potential to grow and gain a higher market share.In a freewheeling conversation with DURRAH,Jamal Ali Al-Hazeem, Chief Executive Officer, BMIBank looks back on his career and his vision for thefuture.Tell us a little about your backgroundand the road that led you to yourpresent position.I started my career in 1979, and within afew months found an appointment with ArthurAnderson- Bahrain. I started from scratch as staffmember at level one, and worked my way to theposition of Managing Partner by 1993. I stayedthere for 22 years and I am especially proud ofthe fact that we built a practice staffed largely byqualified Bahrainis, contrary to the trend in themarket at that time.In October 2000 I was appointed as ChiefExecutive Officer of the Economic DevelopmentBoard (EDB). I only stayed two and a half years inthis position. The difference of the work culturefor me as a person who had moved from workingin the private sector to a government or quasigovernment organization was a truly genuineexperience.I stayed on as an Advisor to His Royal HighnessPrince Salman bin Hamad Al Khalifa, the CrownPrince, Deputy Supreme Commander and Chairmanof the Economic Development Board for six monthsas agreed, it being the first year of Formula 1 inBahrain. The agreement was that once Formula 1was over I could rejoin the private sector, whichis exactly as it happened. After a short break Iworked in Kuwait with The International Investorand returned back to Bahrain in 2007 to take on therole of CEO of First Investment Bank, a $200 millionSharia-compliant investment bank headquartered inBahrain. From there, the next stop was BMI Bank.Why BMI?I am 51 years old and what I have lived is fargreater than what is left. At this stage in my life,after this career, there is not a lot to prove and not alot left to gamble with.I wanted to make sure that I am able to givemy best shot, with people I like working with. It isimportant to know they will support you and backyou in your efforts. The interactions here are verypositive. I had a few other options at that stage butthey were not really what I was looking for and thiscame as an opportunity to do something good, todeliver something worthwhile in the time I have.This is something I learnt at Arthur Anderson. Youtake something and work with it and when youleave it to someone else, you leave it in muchbetter shape than when you took it over.There has been progression as wellas a transition in your career path atcertain points. How did you cope withthat?Yes there has been progression but not manytransitions as I have stayed consistently within theareas of banking and finance. Banking is not newto me. Having interacted with bankers even at theearly stages of my career, it is a field I know verywell and feel very comfortable with. Even at ArthurAnderson I worked in the financial sector divisionas a consultant and auditor, interacting closely withcorporate banks.The major transition, I would say, was theshift from Arthur Anderson to the EconomicDevelopment Board, which was the move fromprivate sector into a quasi government organization.The EDB was a newly formed organization andthat in itself was a great challenge. Today His RoyalHighness the Crown Prince has both the executiveand political role defined and the EDB is workingsuccessfully as per the original vision and objective.That was the transition for me as I have realizedthrough it that the private sector was my niche.Where do you see the economy todayand how does BMI fit in the big picture?Today there are two main drivers of theeconomy in Bahrain, one of which is thegovernment, who is the biggest spender. As longas the government does what is expected ofit, the economy will run. The other driver is realestate. We don’t have a lot of large corporationsin Bahrain. We have BAPCO, ALBA, Gulf Air, and afew like that but what we have is a large segmentmade up of Small and Medium Enterprises. I thinkthe services industry is growing and tourism andhospitality sector needs to be brought to its truepotential.The government is spending a lot of moneyto build up the infrastructure of the country withprojects like the one near the Diplomat Hotel, andother infrastructural projects, including electricity,power, water, and so on. However, business will notcome just because you have infrastructure. Businesswill come only if you have a lifestyle that investorslike. Saudi Arabia has a lot of infrastructure, andso do a lot of other places, but if you don’t have alifestyle that will attract people to come and live hereand do business, they will not come because theyhave many other options all over the world.In 2000, at the EDB, a study that wecommissioned indicated that the average stay fora tourist here is 1.7 nights and the average spendper night is US$ 125. If however we can increasethat to three nights and US$ 300, the impact on theeconomy will be huge. We need to figure out howto make people stay on longer and spend more withthe right offerings. Seef Mall and City Center arenot enough. Dubai today has the lifestyle and I canspend four 4 days there and not get bored becausethere is so much to do. The government of Bahrainhas a responsibility to come up with some sort ofstimulation package or initiatives for the economy.There is a lot of liquidity in the market. Just lookat the deposits in the bank. We need, howeverto create the right avenues and opportunities forinvestment. We have to create the lifestyle not onlyfor those who come here as tourists, but also for us,for our kids, for our visitors and guests.Given the recent economic downturnand recent banking difficulties, how doyou reassure your clients?BMI is a retail bank and our core businessis in retail. What we are trying to do is increaseour share in the market. The only way we can dothat is by offering better products and services.In 10 years time, I would like to see this bank asone that always uses cutting edge technologyto deliver innovated finacial solutions to ourcustomers. I would like to see BMI taking up thecourse that BBK took 20 years ago, when it wasthe first bank that came up with Internet banking.0201 Jamal Ali Al-Hazeem, CEOof BMI Bank, is determined tobuild on the bank’s strength andprovide customers with uniquefinancial products and services.02 Part of BMI Bank’s CSRProgram is to support the localcommunity. Here the CEOpresents a check to the AmericanMission Hospital.What differentiates BMI from all otherbanks?I have to be candid. At the moment the answerto that would be No, we don’t have a differentapproach, but we would like in time to differentiateourselves distinctly. We don’t want to compete onthe price so I think we can compete on only twostands - quality of service and type of products.These two factors can only be driven by people.There are organizations that can compete onprice because of their size and their liquidity but Ithink what I would like to compete with is people,the staff at BMI. If we have the right quality ofpeople they will provide the right quality of serviceand right type of products. I think that is moresustainable than competing on price. We are still ayoung organization. We have potential to grow andto gain more market share. All that, however, willdepend on the culture we create within BMI. So ifyou ask me whether in the next 5 or 10 years timecan we be the new BBK or AUB of Bahrain, I wouldsay that we can and it will happen because of thepeople here.Tell us about your partnership withTamkeen and the benefits it promisesto bring to the SME (Small and MediumEnterprises) segment within Bahrain.From an economic point of view, the futurefor Bahrain lies in SMEs. If something like a crisiswere to happen, with total dependence on largecorporations that would be catastrophic for thecountry. Bahrain should be supporting SMEs andworking on ways to improve the way SMEs dobusiness. The Tamkeen program is one step in thatdirection and because of our belief in it we have042 a Pearl of Luxury

UP CLOSE & PERSONAL03 0403 BMI Bank celebrates its five yearmilestone in Bahrain.04 “It was instilled in me that in anybusiness you have to be a goodcorporate citizen and give back tothe community you operate within.”decided to work with them. In fact when I cameto BMI, one of the first things I did was to go toTamkeen to find out how we can work together.Our systems were not ready, but we agreed ona grace period of three months in order for us toprepare and have recently launched the scheme.I believe that if you have very strong SMEs inyour economy, that is your best protection. Italyis one of the big industrial nations but its maineconomy is based on its SMEs. The mom andpop shops drive the country. It’s not the Fiat, northe big organizations, but the SMEs. If we canreally work with SMEs improving the way they dobusiness, their reporting, their accounting, the waythey handle their finances, the way they handletheir cash management, I think it would be bestfor them and for us. I think the more they improvethemselves the better for us as banks to work withthem. Once they have better practices, and betterways of managing their business then we will knowand understand their business more than we dotoday. Tamkeen has come up with a lot of productsthat will help SMEs improve themselves.What are the bank’s retail bankingplans for 2010 and what new productsand services do you intend to roll outin 2011?On the retail side we want to continue todevelop our product offerings to our customers.Most banks offer customers the same productor service packaged under a different name, butthe products can go beyond the normal bankingproducts like current and savings account, creditcards, auto loans, mortgage loans and so on. Wewould like to come up with better products thatwill hopefully help our customers so that insteadof just keeping their money with us and earninglow returns on that, they can put their money, withminimum or zero risk on their capital, but which willmore than increase their average deposits. In orderto do that you need a proper kitchen, a kitchen thatwill develop these products, and you need a specialtype of people, special type of skills, special type oftechnology for you to be able to do that, packageit and take it to your clients. This is what we areworking on.Tell us about your CSR program andplans for 2011.We have been contributing and working withthe American Mission Hospital, Think Pink andCommunity development programs. All are greatcauses and we intend to continue supporting them.I come from the background of an internationalorganization, well established in different countrieson the globe. It was instilled in me that in anybusiness you have to be a good corporate citizenand you need to give back for good causes. Theprogram that exists in BMI today was started beforeI came and we are continuing with that. I thinkwhat we are trying to do today is help people helpthemselves. Besides our association with thesecauses we are looking at different ways to helpand contribute. I would like personally to see thatin addition to these causes, we involve ourselves ingood learning programs, something like His RoyalHighness the Crown Prince’s program for education.I think it is one of the best things that has happenedin Bahrain. The vision of His Royal Highness to startthis program is tremendous, and testimonials havebeen pouring in from the international community,even from people like former US President BillClinton and others. This program has been able todevelop some very good brains for the country.Besides it is the first time we have a program thatdoesn’t tie you up. In this program if I support youreducation, you don’t have a commitment to comeand work for me, you are free after you finish.However in the long run the country will benefitfrom your knowledge and experience. It is truethat some of these students have stayed behindafter their education to work for two or three yearsin the US or UK, but I believe that is even betterbecause if they are trained outside, the benefitswill be even more when they come back. I havemyself experienced that when I was in the US on anexchange program. When I returned I managed tobring back a lot of good things with me. I would liketo see BMI involved with initiatives like this.044 a Pearl of Luxury

UP CLOSE & PERSONAL05Our plan is to be able to offer our customers a full rangeof products and services to cater to all their tastes andrequirements.05How do you plan to build on synergieswith your biggest shareholder,BankMuscat, in the next years?We are working very closely together. We aretrying to support each other and I believe thereis much greater strength in the unity than in theindividuals. If we work together as a group we havea much stronger bargaining and negotiating powerthan if we work individually. Today if we need toraise funding in the market place, we work withBankMuscat. If we need support, we work withBankMuscat, if we have a ticket here that is big forus, we try to bring in BankMuscat, or if they havereached their limit with a customer they will askus to take part of it. So the synergy is there. SinceI took over, I made it very clear that I want to workvery closely with BankMuscat because I believethis is my backbone and if I have a shareholderlike that I am very lucky. I see them as a verysupportive, mutually benefitial and strategic partner.Having been the CEO of an IslamicInvestment bank in your previous role,what are your plans for the IslamicBanking division with BMI Bank?Our plan is to be able to offer our customersa full range of products and services to cater toall tastes and requirements of our customers. Ifa customer wants finance or wants a deposit inthe conventional way, we can offer that, and if hewants to do it in the Sharia compliant way, we canalso offer that. By doing that we can really cater tothe vast majority of the population. Whether thisis a better way or that is a better way, we leave tothe customer to decide. My job is to offer him afull range and then he can choose what is best forhim and for his requirement. I think we are luckythat we have an Islamic window that can cater tothis need. So we will look at it carefully, nurturingand expanding it and we are making sure weare bringing the right people into this division toexpand it.Would you say that the globalfinancial crisis underlined the case fora more ethical form of finance?Yes, definitely. I think a lot of banking andtransactions were done in ways that were notprofessional. We have seen so many examplesover the last two years. This industry was supposedto be regulating itself but this latest crisis hasrevealed that this industry cannot regulate itself.There have to be strict regulation in order to protectdepositors and shareholders and I think hopefullywhat they are working on will achieve that. Morethan any other business, this business is based ontrust and if we lose that we don’t have an effectivebanking sector.What exactly is the vision for BMItoday?To be a dynamic and innovative regional bankoffering our customers unique financial solutions overthe next ten years.060705 BMI Bank is a retail bank with eightbranches and 26 ATMs in Bahrain.06 Mr. Al-Hazeem with the Board ofDirectors and CEO of BankMuscatcelebrating 5 years of success inBahrain.07 Mr. Al-Hazeem inaugurates Sami AlKooheji’s boat. BMI Bank is one of theofficial sponsors for Sami Al Khooheji’s2010 Asian Games bid.046 a Pearl of Luxury