BizBahrain April 2016

Interview | Dr. Farid Al-Mulla
There is a lot of
secrecy and there
is a lot of trust
involved, and the
trust is based on
confidence and
longevity.
Dr Al-Mulla started his banking
career with Gulf International Bank
(GIB) in 1983, from where he joined
Bank of Bahrain and Kuwait (BBK) in
1990, starting as Head of International
banking and ending as CEO in 2001.
In a fascinating interview at the
Capital Club with bizbahrain Group
Editor Reena Abraham, Dr Al-Mulla
talks about the changes and challenges
he has seen in private banking and the
ethics and principles that have built
the foundation of his success. Here are
some excerpts from the conversation.
Let’s start with the story behind Oasis
Capital Bank. What defines it?
The story starts in 2007 when I was
approached by the main promoters
behind Oasis Capital with the idea to
create a private bank. Initially I was
skeptical, as I thought that the barrier
for entry into private banking was huge
and dominated by the Swiss banks
and by international banks. Private
banking for me was the ultimate
because you have the confidence of
the most successful, the HNWIs. There
is a lot of secrecy and there is a lot of
trust involved, and the trust is based on
confidence and longevity. These older
institutions have been around for years
and years, literally hundreds of years
and above all their performance have
perpetuated their existence.
When we were established in July
2008, within two months the world was
faced with the global financial crisis.
We started looking very closely on what
the repercussions of the crisis were
on investment banking. Our capital
was intact, but as an institution we did
not have the pedigree. It was a tough
introduction to the world of investment.
The learning curve must have been
steep. What was the take away from the
situation?
Fortunately for us, and through the
hard work of our staff and the support
of our board, we managed to exit all
our investments by 2015. We made a 51
million-dollar profit, and distributed a
good dividend in a very difficult market.
In private equity, you are not a
long-term player. You come in, you put
the house in order, and you move on.
Somebody else will then take it to the
next level. Somebody else could make
more money than you, and good luck to
them.
The increase in profitability
resulted from successful exits from
direct investments. Going forward, the
plans are to leverage our track record
and long-standing relationships with
various partners and continue to look
for suitable deployment opportunities
in selective markets. Today, we have
taken away the word “bank” from
our name and function; we are an
investment firm, and we are focused
solely on private equity. In our second
phase of investments, we have recently
closed an investment in an online
platform in beauty products in Europe
You reported 51.2 million for last year,
that’s a nearly 4 times increase from
the previous year, so how would you
differentiate your investment strategy
against other investment banks in
Bahrain?
Having gone through the early
experience and the massive challenges
we faced, I think the important thing is
to learn and to analyze your mistakes.
Is there one infallible rule or guiding
principle that works for private
banking?
Every firm will have its own
distinguishing brand message, but
perhaps there is one simple and
universal rule; know your customer/
investor and manage the product/asset
well.
Also, while we worry about
instabilities of markets, oddly enough
we also welcome it. Volatility in
markets create risks and opportunities,
this is precisely the type of challenge
we like to take.
We have streamlined our Business
model to focus on key strengths
and leverage our track record and
longstanding relationships with leading
PE firms. Oasis Capital will effectively
provide its investors with access to
“handpicked” individuals direct PE
investments from top tier firms at very
competitive ad transparent costs
What are the challenges for the banking
sector, particularly the private banking?
We are not in 2008 with a financial
and banking crisis, but I believe there
could be a possible repetition here in
the emerging markets, maybe not to the
magnitude of 2008, but still at a high
level.
What happened between 2008 and
now, and I am putting it very simply,
was to combat the down turn by making
money cheap to keep the ship afloat.
But the side effect is that it will create
another bubble, and this is where I
come back to the point, banking is
not a science. What the international
community did between 2008 until now,
honestly, is experimenting and like
many things in life, like medicine, you
don’t know the negative side-effects
until years later,
I think what happened between
2008 and now has been a near miracle.
We are very fortunate as a world we
didn’t get into a situation like the 1930s
with huge unemployment, and poverty,
and the end result of a world war.
In your opinion, what are some of the
specific long-term reforms to create a
stable and sustainable society?
I hesitate to answer because there
are so many variables. You can take
May 2016
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