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Private Investor Middle East


Adam Smith Conferences is launching a new international conference in our portfolio of events on wealth management and private banking – “Private Investor: Middle East” which will take place in London on 4th-5th September 2017.

The event will bring together high-profile private bankers, family offices, private investors, tax, legal and immigration consultants to discuss changes in the profile of private investors from the Middle East, the most promising geographical markets and investment sectors, succession planning and many other hot issues.

Speaker confirmations include:

  • Mohammad Al Duaij, CEO, Alea Global Group, Single Family Office (Kuwait)
  • Mohammed Helal, Director – Group Investment Head, Al Othaim Real Estate (Saudi Arabia)
  • Chris Payne, Managing Director, GWM Investment Management (Guardian Wealth Management)
  • Sheikh Bilal Khan, Founding Partner & Co-Chairman, Dome Advisory
  • Philip Munro, Partner, Wealth Planning & Tax, Withers
  • Matthew Norman, Chief Investment Officer, Kenjiro Private Office (London)

You can see the full speaker list here >>

Forum highlights and hot topics in 2017 include:

    • Estate planning tips and traps for wealthy people from the Middle East
    • What investment strategies are best in the current political & economic situation?
    • Investments in financial & tangible assets
    • Investments in real estate
    • Live on-stage interviews with successful Arab entrepreneurs
    • Master-class on succession planning for Middle Eastern clients
    • Family office for a Middle Eastern client
    • One-to-one meetings with private bankers & family offices

    You can see our programme here >>

    The European magazine’s subscribers can benefit from 10% discount by quoting 1124EUR upon online registration.

LRI Group


LRI Group partnered with one of the largest German insurance groups in launching a real estate fund with a committed capital of EUR 600 million. The fund targets exclusively professional investors and focusses on a diverse portfolio in the area core/core plus real estate in Europe ex Germany.

As Alternative Investment Fund Manager (AIFM), LRI Invest S.A. provides central administration and portfolio management as well as the specific regulatory reporting for German investors. LRI Depositary S.A., the in-house depositary for alternative investments, functions as a register and transfer agent. The role of the investment adviser is fulfilled by a large international real estate investment manager.

LRI Group launched a Specialised Investment Fund (SIF) tailored to the specific needs of German institutional investors such as pension funds and insurance companies. SIFs in Luxembourg are highly efficient not least due to their rapid implementation. In addition, due to its regulatory environment the Luxembourg SIF is more flexible than its German counterpart as it can be tailored to the specific needs of the initiator and especially the investors, also product-related requirements and restrictions are less strict than in Germany.

Michael Sanders, Managing Director of LRI Invest S.A. says: “We are very happy about the confidence the investor has in us. LRI Group positions itself once more as an established partner for regulated German investors such as insurance companies and pension funds who want to invest in alternative investments via Luxembourg. The legal and regulatory framework in Luxembourg provides not only German but also international investors various possibilities in the structuring of investment mandates.”

Overall, LRI Group manages over EUR 3 billion in alternative investments for a global investor group, of which around EUR 1 billion are in real estate. In 2016 the transaction volume in real estate totalled more than EUR 900 million.

About LRI Group

LRI Group is a leading independent investment services company based in Luxembourg. It provides asset managers and investors with nearly three decades of experience in structuring and administration of traditional and alternative investment strategies. Established in 1988, LRI Invest S.A. acts as Super Management Company (Super ManCo) being authorised as Alternative Investment Fund Manager (AIFM) and as UCITS Management Company in Luxembourg. Through LRI Invest Securitisation S.A. it also operates a securitisation platform for a variety of alternative investment underlyings for institutional investors. With LRI Depositary S.A. it also provides depositary services and can act as Register and Transfer Agent for alternative investment funds. LRI Group has about EUR 10 billion in assets under administration and 100 staff.

Further information
www.lri-group.lu

Delivering public value through executive education


Cardiff Business School is the world’s first business school to put public value at the heart of its activity and provision. We promote economic and social improvement through interdisciplinary scholarship that addresses the grand challenges of our time, while operating a progressive approach to our own governance.

We are committed to principles of innovation, entrepreneurship and opportunity, pursuing research and scholarship that benefits communities, both domestic and international.

This means that in addition to teaching of the highest standard, delivered by academics and practitioners working at the forefront of their disciplines, those who study with us benefit from a an innovative new form of business education.

Our 150 academic faculty work closely with colleagues across the University to innovate and solve business problems, large and small, as well as address some of society’s major social challenges. This results in a progressive and holistic viewpoint on current corporate and social challenges, and bold insights into potential solutions.

In particular, our Executive Education provision, and Executive MBA programme, can provide you with the motivation, knowledge and tools to challenge the business status quo and think differently. It allows you to consider and define your role in your organisation and identify new ways of working which provoke positive change, helping you to redefine business practice and impact while accelerating your career.

Our programmes are informed by our world-leading research, delivered by expert faculty in a collegiate and supportive environment. The physical learning environment places you at the heart of a dynamic and fast moving community of academics and students and is tailored to encourage collaboration and promote networking opportunities.

Cardiff Business School is doing this differently, and our flexible, socially-minded approach to business management could help you, or your teams, to adopt and develop new strategies, gain expertise and transform your ways of working. This could help transform your business outlook and wider society.

Our Executive Education courses can be tailored to your individual needs and requirements, while our Executive MBA offering is a flexible 28-month programme and delivered in three-day blocks to fit around busy professional and personal responsibilities.

Click here to find out more about our courses.

Supercharging your ERM/Risk program


A few years ago, at a major operational risk conference, the Federal Reserve and OCC presented operational risk’s role in the financial crisis. They stated that it was the “most critical risk” to the continued health of the financial industry and gave sound logic for their proclamation.

Craig Spielmann, CEO RiskTao, LLC presented directly after them on “Operational Risk Needing a Facelift.” He started by asking the 400 plus operational risk professionals in the room, if they expected their budgets to increase given it was cited as the most critical risk. Not a single hand was raised. He asked, “How many expected to have their budgets cut?” Half the room raised their hands. This seemed illogical on the surface. The “most important risk,” but instead of investing, there was an expectation of budge cuts. This should alarm most people and speaks volumes to the “perceived value proposition.”

Craig claims another perspective comes from his own personal experiences conducting ERM/ORM and risk workshops at conferences and individual institutions. Towards the end of each workshop, he asks participants to break into groups. He supplies them with a list of 10 critical questions. The tenth question is: “Would you pay for your own services?” The vast majority of the groups answer “No.” His sessions usually include all three lines of defense as well as front line business people and regulators (at the open conference sessions). So it would seem, the desire for improvement and is across the board.

These data points tell us that some risk functions need to transform to add value. The feedback received from risk professional is that they believe they have become overly “administrative in nature” and improving and guiding the business to achieve their goals within risk appetite, is secondary.

Here are recommendations to improve the value proposition:

  • Strive for Excellence – Organizations must recognize and invest in risk transformation to gain a competitive edge and achieve a high return.
  • Run Risk as a Business – Risks groups should run as “business, “ understand their value by assessing from their stakeholders perspective, their people, products and services, processes and technology to effectively compete and maximize value.
  • Strategic Alignment – Risk has to be involved in strategic planning to make a significant contribution and be in-step with the organization.
  • Talent – Organizations need to attract and keep talent. This includes having a “skills model” aligned against goals blended with a smart compensation structure.

In conclusion, risk management and business management are one in the same. The alignment between the two is paramount to running a successful business. There is a better path to achieving this seamless integration goal. There is much more value that can be generated by transform risk into a “business.” As we learned in the financial crisis, getting it right can generate a competitive edge and a high ROI.

All of these items and more will be addressed in the upcoming “Supercharging Your ERM/Risk Program Masterclass” sponsored by the Center for Financial Professionals. The Masterclass will accompany the 3rd Annual Operational & Enterprise Risk Management Congress taking place 19-20 April, where over 200 senior financial risk professionals will join to assess the remit of operational and enterprise risk management to increase efficiency between departments.

Stress Testing Europe


Antoine, can you tell the audiences about yourself and your experience in the industry?

I have a 15 years’ experience in quantitative finance first in market then in credit and now in a transversal role for stress testing.

I started at Dexia where I contributed to the implementation of the internal model for market risk and was appointed head of model validation for valuation / pricing and market risk models.

I joined BNP Paribas in 2009. First in a model validation role, leading the review of the economic capital, stress testing and credit provisioning frameworks. I joined in 2013 the Group credit risk stress testing team and have been leading the team since 2015.

Now the organization around stress testing and capital planning has evolved in order to leverage stress test as a key capital planning and risk management tool for the bank. A transversal team has been set up that gathers Risk, Finance and ALM resources. I am in charge of the model component of this « platform » (hence covering stress testing models for credit, market, ALM, operational risks, other revenues…).

Can you explain some of the synergies between IFRS 9 and stress testing people and systems?

Under the push of Basel II, Banks have strongly invested in measures of credit risk, EADs, PDs and LGDs, that are “through-the-cycle” or downturn. Typically these measures do not reflect an expectation for the realization of a loss rate or a default rate in the near future, but rather a long-term-average perspective.

Under IFRS9, the parameters used have to be point-in-time and forward looking. Hence, reflect current and anticipated trends and thus provide the best expectation of the actual realization of a variable in the foreseeable future using all information available, especially macroeconomic forecasts.

The synergy with stress testing is strong as the aim of credit stress testing is to anticipate the value of risk parameters under severe macroeconomic scenarios, as well as under baseline scenarios. Hence stress testing is the area where the banks had already developed capabilities to compute and project point-in-time and forward looking indicators. Moreover, macroeconomic scenario generation processes had already been implemented for this process. It was thus a natural choice for most banks to rely on the stress testing infrastructure, after some potentially major evolutions, to fulfil the IFRS9 requirement in terms of computation of risk parameters.

Can you outline the main challenges of the synergies between IFRS 9 and stress testing models?

Using stress testing models in the accounting context is a clear opportunity to reinforce stress testing and popularize the models and techniques used across the institution. Stress testing models will drive P&L impacts and thus be scrutinized by many stakeholders across the organization. It will be a great opportunity for receiving more feedbacks on model performance and involve more people in the construction of the most relevant approaches. It is also the opportunity to reinforce the operational insertion of stress testing.

But indeed, IFRS 9 comes along with major challenges:

  • With IFRS9, the stress testing teams evolve from a context of risk anticipation and financial planning to accounting statement and to a direct PnL impact. It leads to significant changes in terms of governance, reporting needs and in the way to monitor model risk. For example, model recalibration will result in PnL impact, which needs to be managed and explained.
  • The other important challenge is for stress testing itself. At the same time where stress testing teams are contributing to the implementation of IFRS9, they need to develop an approach to stress cost of risk under IFRS9. It is a major challenge in terms of methodology (because the IFRS9 measure is complex itself) as well as in terms of systems (the computation of IFRS9 provisions requires a lot of data that is not always present in stress testing systems).

What are some of the operational challenges of similar teams working on both stress testing and IFRS 9?

The evolution of regulatory stress testing requirements over the past few years has forced institutions to develop increasingly complex methodologies with a high level of granularity. There has been less focus on the efficiency of the associated operational processes (design and automation) as these evolutions were mostly short noticed. With IFRS 9 coming, the same teams are now working on both stress testing and IFRS 9 may face the following challenges:

  • Most institutions retain a relatively small number of staff dedicated to stress testing, while a broad range of other teams are indirectly involved. With IFRS 9, the teams in charge have no room left for time consuming and resource intensive processes. The latter may become unsustainable especially if the demands from senior management and regulators continue to increase. To this end, it will be crucial to document the full to-end stress testing process and accurately measure the full costs of delivery in order to identify optimization opportunities and support investment decisions to better design, integrate and automate stress testing processes;
  • In this context, as teams work on both internal and external stress testing on top of IFRS 9, they will definitely need to embed stress testing into existing planning and forecasting activities in order to leverage existing resources tools, and methodologies. In order to do so, aligning internal and external stress testing would significantly lessen the burden on banks thereby releasing resources to focus on IFRS 9 (project work load and production) and internal risk management (e.g. the static balance sheet assumption potentially detracts from the internal value);
  • Teams now working on both stress testing and IFRS 9 have been focused in delivering external stress testing within tight deadlines and challenging environment. They will now need to step backward and take some time to design and automate a real capacity of analysis to explain P&L impacts under IFRS 9 as demand from stakeholders will be very high especially considering volatility of provisions and CET1.

    Unfortunately, our view is very few institutions and regulators understand clearly the totality of these efforts and the associated costs yet. Even though no comprehensive credit risk stress testing exercise under IFRS 9 has been conducted yet, it will clearly be an operational challenge for the entire banking industry and the one to come will surely set the path.

How do you see the role of stress testing professional evolving over the 6-12 months?

So far, stress testing professionals were employing significant time and resources in meeting regulatory demands, diverting efforts away from internal stress testing and limiting the value that firms derive from this as external stress testing is primarily used in validating capital resilience, with limited influence in business strategy. The current change in agenda provides the ideal platform to reform stress testing professional role to:

  • Support for operations: Conciliate stress testing with business planning and internal risk management requirements in order to insert operationally stress testing into business monitoring and decisions. This will require to iterate with businesses notably in order to capture their risk drivers, appetite, requirements…;
  • Project management: Better invest time and effort to improve and streamline existing processes to enable institutions to continue to meet regulatory requirements given the prevailing trend for ever-stricter regulatory supervision;
  • Client-facing: IFRS 9 impacts and volatility will definitely bring the light into stress testing professionals. They will be required to rationalize and explain the impacts to a broad range of stakeholders both internally and externally, turning their role into a more “client-facing” role. One of the main drivers defining the future of the stress testing professionals in the longer run would greatly depend on the probability that banks and regulators work together to agree the right balance of effort between internal and external stress testing to preserve the value of stress testing as an internal management tool.

Antoine Bezat, Head of Stress Testing Methodologies and Models at BNP Paribas will be speaking at the Stress Testing Summit 2017.

Protect your business travel data


It’s highly probable that the following applies to your company when you send your executives on business travel: you are responsible for protecting the data of your staff but, in reality, you have no control over it. This is a significant risk.

The European Union now takes data protection seriously. The rules apply for any company that collects data from EU citizens, irrespective of their place of business. These rules, made in the framework of the General Data Protection Regulation (GDPR) are, in principle, reasonable. But in reality, only a few companies are really prepared for them.

Business trips always require personal data. Today, this data is stored in multiple systems: in a company’s HR system, the travel agency’s system or the online booking engine. It is sent to systems at airlines, hotels and credit card companies at the time of booking. Things become even more complex with international companies, multiplying the number of systems in which personal master data is kept.

Umbrella AG, based in Wetzikon, Switzerland, and data.mill of Salzburg, Austria, provide companies with professional master data management assistance in accordance with the new GDPR. Thiemo Sammern, Managing Director of data.mill, points out a key change: “Master data management now becomes much more than just access and storage. Companies must learn how to handle personal data.”

This means companies must ask a range of questions. Where is my data? Who has access to it? Which data is actually needed? Which tasks does it fulfil? How and when is data that is no longer needed deleted?

Left: Helmut Pilz, VP Business Development, Umbrella AG, and Thiemo Sammern, Managing Director, data.mill

Umbrella aims to practically implement the new data protection requirements. Its Umbrella Faces product ensures that personal data is synchronised between various systems; for example, the online booking engine via which business trips are booked and a company’s internal HR system.

Umbrella and data.mill and also help companies clean up their master data with an ingenious concept that quickly makes clear which data is not needed and where gaps exist. Last but not least, storage in a Swiss data centre is another building block in this security concept.

The EU’s penalty scale for violations of the GDPR is draconian. As such, Thiemo Sammern and Helmut Pilz, VP Business Development at Umbrella unanimously agree that “doing nothing is not an option”.

Further information
www.umbrellafaces.com
datamill.solutions/en

ALBA: creating opportunities through investment


Established in 1986, Corporación Financiera Alba (Alba) is a listed Spanish investment holding. The company is part of Grupo March, one of the main family-owned business and financial groups in Spain, which is also integrated by Banca March and the Juan March Foundation.

The group’s strategic investments, excluding those within the financial and insurance sectors, are made via Alba. Its net asset value (NAV) is above 4,200m euros, with a stock exchange market capitalisation of over 2,800m euros.

Alba’s current investment portfolio is composed of listed companies and cash (85%), investments in Artá Capital’s vehicles – a growth private equity house controlled by Alba (7%), and real estate (8%).

The listed portfolio is formed by minority but relevant stakes in companies including Acerinox, BME, Ebro Foods, Indra, Euskaltel, Viscofan and Parques Reunidos. In unlisted equity investments, Alba currently owns minority stakes (or majority stakes along other co-investors) in mid-cap Iberian companies, all of them managed by Artá Capital.

Investment philosophy

  • Alba is a long-term investor. On average, it remains in the share capital of participated companies for more than 10 years, and in some occasions, has invested over 20 years.
  • Alba hold minority but significant stakes. In listed companies, the target stake range is 10%–20%. In unlisted companies, Alba’s direct stake could go up to 50%.
  • For a potential investment to be considered, Alba should have access to the company’s governing bodies, and therefore be able to appoint a representative on the Board of Directors and its commissions – this is a pre-requisite in any of its investments. This allows Alba to monitor investments and actively participate in the key decisions of each company. This ensures the highest possible level of compliance with market practices in terms of corporate governance, which are considered essential for the long-term success of all companies.
  • Alba invests in companies with good long-term growth prospects, led by strong management teams.
  • Alba seeks to be a reliable and trustworthy partner of other shareholders, the management team and other stakeholders of the participated companies.
  • Alba avoids potential conflicts of interest.

Alba considers that its reputation is one of its strongest assets, and it is therefore very important to avoid reputational risk. The company does not invest in distressed companies or troubled sectors, and does not make hostile acquisitions.

Further information
www.corporacionalba.es

Empowering Islam with knowledge


The International Islamic University Malaysia (IIUM) reflects the long-term ambition of Muslim scholars to have an Islamic university in Malaysia that can lead the Muslim community in all branches of knowledge. The Government of Malaysia officially established the university on 20 May 1983. The philosophy of IIUM was inspired by the First World Conference on Muslim Education in Makkah in 1977.

IIUM was founded under the Companies Act of 1965, which enabled it to use English and Arabic as the main languages, therefore enhance its global orientation. IIUM integrates Islamic values and world views into its humanities, scientific and technical curricula, which is captured in the university slogan ‘the Garden of Knowledge and Virtue’. This is reflected in IIUM’s educational philosophy. IIUM aspires to restore the roles of Muslims in education, knowledge creation, and contributing to improving quality of life across society.

Befitting of its Premier International Islamic Research University (PREMIER) status awarded by ISESCO on 17 December 2014, IIUM provides an extensive and comprehensive learning environment conducive to advanced research across various disciplines. It is the quality of the learning and research environments that has attracted the high concentration of talent for which IIUM is renowned. IIUM offers various postgraduate, professional and leadership training programmes especially in its niche areas – Islamic Services and Islamic Products. The university has become recognised as a global pioneer in Islamic banking and finance, and considered as the reference point for these areas of business.

To ensure delivery of quality tertiary education, IIUM employs accomplished scholars and experienced professionals. As of October 2016, there were approximately 2,000 administrative and about 1,980 academic staff. More than 80% of the total academic staff have doctoral qualifications.

IIUM has 14 faculties, three institutes and a Centre for Strategic Continuing Education and Training.

Ethical approach

In addition to achieving academic excellence, IIUM ensures that the students are trained in responsible business practice and taught the vital importance of sound ethics and total professionalism. Managerial and entrepreneurial skills, as well as leadership skills, are also high on the teaching agenda. IIUM places great emphasis on good character or Budi as part of the education process. This is in line with the Islamic teachings, which focus heavily on developing a strong ethical foundation.

IIUM is ranked in the top ten of the world’s best varsity debate teams. Its debaters have even received the ‘Asian Best Debater Award’. IIUM achieved further success in the debating arena when the students were awarded ‘Best Debater Award’ in Cambridge, UK. The Malay Language Debating Team has won the Environmental Debate Competition three years in a row. The IIUM Arabic debating team has also received many accolades in debates, public speaking, Quranic memorisation, recitation and Tajwid (the rules governing pronunciation during recitation of the Quran) at local and international competitions.

IIUM has several campuses spread across Malaysia, each providing different fields of study. The Gombak campus in Kuala Lumpur houses the university’s administration as well as the faculties of Law, Economics and Management Sciences, Islamic Revealed Knowledge and Human Sciences, Architecture and Environmental Design, Information and Communication Technology, Engineering, Education and Languages, and Management.

Professor Dato’ Sri Dr Zaleha Kamarudin, Rector, International Islamic University of Malaysia

The Gombak campus offers a complete range of facilities including on-campus housing, a mosque, two state-of-the-art sports complexes with Olympic-sized swimming pools, a fully equipped library with more than two million printed and digital materials supported by online databases, a medical clinic, a post office and three Malaysian commercial banks.
The other campuses are located in Kuantan, Kuala Lumpur, Petaling Jaya, Gambang and Pagoh.

The Kuantan Campus is nestled within a valley surrounded by lush greenery. It houses the Science, Medical, Pharmacy, Allied Health Sciences, Nursing and Dentistry faculties. Kuantan has another site, Jalan Hospital campus, housing part of the faculty of Medicine. The Kuala Lumpur campus at Persiaran Duta is now housing the Centre for Strategic Continuing Education and Training (CRESCENT). The Centre for Foundation Studies is located in Petaling Jaya, a satellite town at the south of Kuala Lumpur and Gambang, Pahang.

The population of IIUM students is approximately 30,649, who attend from around 117 countries. To date, IIUM has about 80,000 alumni of which 68,000 are Malaysians and 12,000 international.

Professor Dato’ Sri Dr Zaleha Kamarudin, Rector of IIUM believes that students who graduate from IIUM are stronger both in character and knowledge. She says: “IIUM is one of the leading universities in research. It is also a garden of knowledge and virtue imbued with Islamic principles and it promoted the meeting point of diverse cultures of more than 100 countries globally. Our students benefit from the culture of research, diversity and develop an understanding of shared values.”

Further information
www.iium.edu.my

Incorporating enterprise risk management into strategy


Enterprise Risk Management (ERM) is an approach prescribed to manage and balance organisations’ risk with their objectives. It looks to provide a strategic overview of an institution and their risks. Since the global financial crisis, institutions were criticized for their apparent siloed approach to risk management, failures to bring each area together for a holistic overview of risk to manage within its risk appetite. ERM provides a central risk function to improve an institutions coordination between functions and capability, it provides a unified outlook for stakeholders and aims to improve the ability to manage risks across the enterprise more effectively. Scrutiny is increasing on financial institutions to ensure risks area appropriately managed and an ERM program is in place to manage risks in order to feed up to stakeholders. There are a range of frameworks or approaches adopted in order to tailor to the needs of complex institutions and improve their practices to identify, analyze, respond to and monitor risks and opportunities.

With risk playing an integral part in any financial institution or broader business, regulatory scrutiny is continually increasing to ensure processes are in place across the industry. When properly managed, risk can enhance growth and opportunity for institutions, however with many large complex institutions across the industry, it is increasingly difficult to gain an overview of risk and opportunities to drive the business.

ERM as a function is difficult to place within an institution, with many questions raised as to where the function sits and how this impacts reporting structures. ERM should be viewed as a business strategy, not just a regulatory burden and used to manage risk both holistically and to better prepare for the future of the enterprise. Institutions look to carve out a function to identify all risks and manage them actively based on several factors, reports are made available to stakeholders and shareholders. Across the industry and between each institution there are varying ranges of interpretation around the ERM requirements and understanding the conceptual standard across the industry. Many have questioned the theory in practice and questioned the functionality of the role and necessity, with questions around the role of ERM compared to the role of the CRO? Doesn’t the prescriptive text theoretically describe the role of the CRO? The differences appear to come when considering reporting lines, do functions report to the ERM function or the CRO? For a relatively mature requirement many are grappling with the fundamentals of what ERM means and where it sits within their institution. The function has the task of calculations for both modelling and finance and representing the enterprise and their risks, reporting up and providing reports to drive business strategy and decision making.

During the research for the Center for Financial Professionals’ risk management conference: 3rd Annual Operational & Enterprise Risk Management, an alarming number of industry professionals raised a number of questions as to the fundamentals of the ERM function, where it sits and often grappling with understanding the purpose.

Another key area flowing on from definitions and interpretations is implementation within strategy and using ERM as a strategy asset to define the lines of business. ERM should be seen as a function that drives strategy and business making ability, with an enterprise wide view of risk. ERM is often misinterpreted as mentioned above and not always utilized in the way anticipated, often viewed as a confliction with other functions and more of an op risk focus, the role of ERM plays a vital part in reporting upwards and providing a business overview. Organizations should see ERM as a strategy asset used to define risk and appetite in each line of business with a uniform overview of each silo or business line/function. ERM plays a vital role in communicating to the Board and providing information upwards to key stakeholders. Board communication is an integral part of ensuring that ERM is used and utilized as a function that sets appetite and drives the business forward, key decision makers are informed of the overall risk level and make decisions accordingly based on this. Many should but do not see ERM as a function that can assist in identifying, monitoring and assessing risk at an enterprise level, it is not only the responsibility of each function, but also of ERM in order to bring these areas together. ERM is increasing in momentum and focus in individual institutions, and is quickly being seen as a strategy asset, although differing interpretations and uncertainty as to the expectations of the function may impact effectiveness.

ERM has been a strong focus area in many institutions both large and small since the financial crisis, the visible need to reduce the apparent siloed structure in organizations brought the idea of a function to ‘bring it all together’. Traditionally institutions operate with business lines as individual functions, and a broader overview of risk is not always apparent, ERM brings silos together and provides senior management and the Board the information required to steer the business and set appetite levels. When interpreted and implemented effectively, ERM can provide untold success and benefit to institutions.

The Center for Financial Professionals look to provide insight from the industry’s senior though leaders to review what ERM means and tools for successful implementation at the 3rd Annual Operational & Enterprise Risk Management Congress, NYC, October 19-20.

Visit www.cefpro.com/oprisk-erm for all information on the agenda, speaker line up and speaker insight. Join industry peers for two days in New York City to discuss key areas within ERM and Operational Risk, combine the two for an overview or delve into one stream for in depth discussions.

Don’t miss the ERM Masterclass, October 18, led by industry expert Craig Spielmann who provides an intensive and interactive one day class on ‘Supercharging your ERM Process including an RCSA step by step’.

Ignoring the highway code: how Uber CEO’s need for speed devastated the firm. Ajit Menon

The recent events around Uber founder Travis Kalanick have once again opened up the conversation about organisational culture and leadership. A successful entrepreneur, he has taken Uber from a tech start-up to one of the world’s most innovative companies completely turning the taxi market on its head. However, Kalanick departs under a cloud of controversy and is resigning after 8 years at the helm of the firm that he co-founded in 2009. So, where did it all go so badly wrong for the serial tech entrepreneur?

I work with a number of founder businesses. Founders are visionaries, they are able to see a gap, a business model that others cannot. However, it takes a lot more than a vision and a business model to build a successful organisation.

One of my clients, a successful entrepreneur who has built a strong financial services business that survived the crash, attributes his firm’s success to its strong culture. I remember facilitating a strategy session for his top team many years ago. His executives had prepared complex financial models and projections to chart the future trajectory of the business. However, his first question was ‘What sort of business do we want to build for our people and our customers? What will it look like and what will it feel like?’. This was an important starting point in building an environment, a culture with strong non-negotiable boundaries within which they would do business.

Leaders play a very important role in managing and perpetuating the culture. Kalanick has found out to his cost that all the commercial success in the world can’t protect you from the devastating consequences of negligent leadership. In pursuing a ‘win at all costs’ mentality, Kalanick has presided over a company that has neglected employees, deceived regulators, allegedly stole trade secrets from a rival and got embroiled in sexual harassment charges.

The report by former attorney general Eric H Holder Jr. into Uber’s culture suggests that Uber flouted rules and regulations and turned a blind eye to corporate misconduct. A firm’s culture determines how employees behave in a business. Leaders play a pivotal role in building and managing the culture. Kalanick’s behaviour set the tone from the top on what was acceptable and what was not. It set strong expectations around what was valued in the organisation and what was not.

Like in the dashboard of a car, there were a number of flashing lights, incidents that emerged that pointed to Uber’s toxic culture. For example, in Uber engineer Susan Fowler’s blog post about her experiences of sexism and sexual harassment she alleges that, instead of launching disciplinary proceedings against the alleged culprits, Uber hired a law firm to dig up dirt on her. In effect, Kalanick and subsequently his leadership team condoned the misbehaviour by not putting down strong boundaries. They were complicit in the misconduct by failing to respond quickly and unequivocally to issues that were raised by customers and their employees.

When the integrity of Uber’s business was questioned, Kalanick failed to set the tone for a healthy corporate culture. As Uber’s most senior executive, it was incumbent on Kalanick to lead by example and mount a robust response to any allegation of inappropriate behaviour. Uber’s rapid worldwide success probably created a sense of invincibility in Kalanick. One can see this in his abusive response to an Uber driver that was circulated around social media. Instead of acknowledging the problems and vulnerabilities, he probably saw them as a potential threat to his success. He therefore responded unconsciously in a way to prove his superiority doing irreparable damage to Uber’s corporate image. He stepped on the gas without checking his mirrors and without looking out for the warning signs that were in front of him.

This case is far from unique, sadly. As a consultant specialising in organisational culture, I have encountered countless examples of business ‘leaders’ failing to be good role models in their business. I have come across leaders turning a blind eye to misconduct in the pursuit of commercial success. This is dangerous as it does two things; firstly, it condones bad behaviour and normalises it. Secondly it causes dissonance in the system when the organisation says one thing but the leaders demonstrate different behaviours. It leaves employees confused and anxious as there is no clarity on which behavioural rules to follow; those espoused by the company or the behaviours displayed by leaders.

Along with a clear vision and strategy leaders must also build and uphold a narrative around the culture and values of an organisation. Whilst the competition may quite easily be able to replicate your products or services, they will find it hard to replicate your culture, what it means to work at and with your organisation. Your culture can become your competitive advantage. Customers will come back to you based not only on how good your product is but also how they feel when they interact with you. You will attract the best talent because your employees want to work for you, are committed to your vision and feel they have a shared set of values. Ignore culture and like Kalanick you will find that your balance sheet will only take you so far down the road.

As Travis Kalanick found out to his cost this month, business leaders who fail to set the right example risk losing everything. From SMEs to conglomerates, leaders play an enormous role setting the direction of the organisation both strategically and culturally.  Make your culture a key differentiator and a significant factor for commercial success.

How to build a healthy organisational culture?

  1. Be clear about the non-negotiables:

Create absolute clarity around what behaviours are acceptable and which ones are not. Build your own ‘highway code’, a set of norms and values that will guide behaviour. Think long and hard about what kind of organisation you want to build for yourself, your people and your customers.

 

  1. Open up the boardroom:

Too many values programmes are driven top-down and employees never see the point of them. Build this narrative with the organisation not with your executives isolated in a boardroom. You must engage your employees in creating a shared set of values that they want to live. Your people need to understand how this is important for them in their roles.

 

  1. Hold yourself and your people to account:

It’s not enough to create a set of behavioural principles. You need to live it and you need to pull people up who are not living it. There is no point in publishing a set of values but acting contrary to them. You have to be dogmatic about sanctioning those whose behaviours are counter cultural.

 

  1. Empower your champions:

Whilst leaders are role models in organisations, identify other key influencers. A lot of influencing happens around the water coolers and corridors. Legitimise these influencers by giving them a voice and engaging them in the process of building your culture.

 

  1. Listen! Listen! Listen!

Take every opportunity to listen to your employees and your customers. One of my clients regularly brings together panels of clients, employees and alumni to give feedback to the organisation on their experiences. Do not be afraid to hear the difficult messages.

 

Ajit Menon is a partner at organisational change consultancy Blacklight Advisory

ICMA Executive Education – internationally recognised qualifications for the financial market

ICMA Executive Education is a unique partnership between the International Capital Market Association (ICMA) and the ICMA Centre, Henley Business School, University of Reading.

We offer financial training courses which combine the best of both market and academic practice. The programmes are designed to be interactive and equip participants with practical skills they can use in their day-to-day jobs.  Our Executive Education programmes are benchmark qualifications for both the front office and operations areas of the business and are accredited by the UK Financial Skills Partnership (FSP) and the CFA Institute.

Our courses range in length from 1-5 days and can be studied either in classroom or via online training. The programmes we offer attract an international client base and present an opportunity to network with counterparts from a whole host of financial institutions.  Delegates on our courses work in the top tier investment banks, stock exchanges, law firms and regulatory bodies.

We offer candidates the opportunity to achieve a recognised financial markets diploma by completing training in a defined pathway.  The two diplomas, focusing on either Securities and Derivatives or Financial Market Operations, are achieved by candidates successfully completing the required Introductory and/or Intermediate qualifications in addition to two ICMA training programmes.

We also have a progamme which provides scholarships for employees of ICMA Member firms who are under 25 years of age.  There are a limited number of scholarships available for each ICMA Member firm. Eligible students receive a further 50% discount off the member rate.

Further information
+44 (0)20 7213 0338
education@icmagroup.org
www.icmagroup.org/executive-education

 

Danube Business School Austria


Danube Business School Krems Austria is leading the Executive MBA’s Industrial magazine Ranking 2017 for the best MBA programmes in Austria. For the fourth year in a row, the Executive Master of Business Administration programme has been voted number one in the country. Our Executive MBA programme covers a unique 3-Dimension Learning Model focusing on Leadership Techniques, Strategy Innovation and Global Business Dynamics guiding our students to understand the importance of innovation for business and society in a new professional way. The “Experiential LAB” offers an innovative, real time learning space for entrepreneurs, creators and business leaders. More information about the Business School’s innovative programmes including Executive MBA, Professional MBA and Master in Business Administration (One Year MBA) can be found on our website.

Lead Innovatively. Learn Globally. Act Strategically.

Are you also confronted with steadily increasing complexity in your business environments, such as digitalization, as well as global economic dynamics, resource constraints and accelerating innovation cycles? Are innovation and transformation more than just buzzwords in your prospective business? Our MBA programmes cover state-of-the-art general management education linked with international standards for achieving the top management level. Specifically, our Executive MBA curriculum is designed to meet the latest international education standards in the business field. Its target group are business leaders who aim to deepen and broaden their general management expertise and competences.

By joining our programmes you will make contact and collaborate with international executives on different case studies, develop “best practices” for your business and exchange experiences with executives from diverse industries and professional backgrounds. The programme also gives you the opportunity to reflect on your strategic decision-making competence, improve your people leading skills, learn how to reflect and tap into your full potential to grow.

International Accreditations

An important part of the Danube Business School quality commitment is that we are ACBSP (Association of Collegiate Business Schools and Programs) and FIBAA (Foundation for International Business Administration Accreditation) accredited. ACBSP is the leading accreditation association for business education programmes, celebrating and rewarding individual teaching excellence.

Become a Student of Danube Business School in Krems. Gain access to global networks, tap into the experience and expert knowledge of our highly skilled lecturers and boost your personal leadership potential – be part of the Danube Business School Krems.

Further information

http://www.donau-uni.ac.at/en/department/wirtschaft/studien/mba-master-of-business-administration/index.php

Warsaw University of Technology Business School

Why Warsaw University of Technology Business School?

WUTBS is one of the leaders of management education in Poland with a 25-year-long tradition of cooperation with the prestigious co-founding academic institutions: HEC School of Management Paris, London Business School and NHH – Norwegian School of Economics based in Bergen. Since 2006 the School has had an international EPAS accreditation for its MBA programme. In 2014 the Warsaw University of Technology Business School in collaboration with the CEU Business School in Budapest launched the Katylyst MBA which was a substantial upgrade of the to date programme.

For years, the programme offered by the School has reached the top of the Polish MBA rankings and has been appreciated in international rankings (e.g. seventeenth position in Europe in the TOP MBA ranking) as well. School’s faculty include lecturers from renowned international famous business schools, as well as global and local business professionals.

The Executive MBA at the WUT Business School is a two-year part-time postgraduate programme designed to address the needs of professional managers. It has an overarching ambition to accompany our students in becoming responsible business leaders. The new, innovative curriculum facilitates comprehension of the of the global trends, interconnections between multiple stakeholders, and the emerging roles and challenges of the leaders. We aspire to equip students with a complete toolbox for solving complex problems, advance their capabilities to get business endeavors done, and support personal development by means of a thorough dignosis, developmental feedback, professional skilss development, and carier planing.

What makes our programme unique?

  • The multicultural environment
  • The classes conducted fully in English
  • Worldwide recognition of the Founding Partners
  • International cooperation with BMI (Lithuania) and CIM in Patna (India)
  • Broad selection of elective classes available in Warsaw and in partner international schools
  • Optional study visits to New York City, China and India
  • High academic standards combined with a real-life approach
  • The use of the modern teaching methods
  • 2-year Personal Development Programme
  • MBA diploma with the prestigious EPAS accreditation

Is it a good time to pursue an MBA degree in Poland?
Obviously, it is. Poland is competitive in many areas, including the educational services. The good MBA programs match those ones in Western Europe as far as the quality is concerned, while remaining much less expensive for students. And finally, it is a good idea to come to the only country in Europe that has survived the global crisis without a recession – and try to analyze what makes the Polish economy so resilient to turbulences.

All the major multinational companies are present in Poland, some of them actively developing their activities and searching for employees. Our graduates do not have problems finding attractive jobs and entering exciting career paths. Poland is a growing, fast developing economy, with numerous opportunities existing for the entrepreneurship. Why not to set up a company and benefit from this opportunity?

Further information
Warsaw University of Technology Business School
tel: +48 22 234 70 89
www.business.edu.pl
mba.recriuitment@business.edu.pl

Berlin: a new business capital


Strategically placed in the heart of Europe, Berlin is a major political, business and cultural centre, with an undeniable cosmopolitan energy. This increasingly ambitious global city may have gained a reputation for its vibrant nightlife scene but an array of high-tech firms and international companies are showing that Berlin is a genuine business destination, too.

The conference industry in Berlin is going from strength to strength. According to statistics from Berlin’s tourist board visitBerlin, 2015 saw a record 7.7 million overnight stays from conference delegates and a total of 27,500 international events were held in the same year. The great diversity of distinctive meeting venues is helping drive interest in the city’s MICE scene, which saw the International Congress & Convention Association’s meeting city rankings place Berlin at number one in 2015.

Messe Berlin is among the world’s leading trade fair organisers and has its own exhibition grounds. From the immense scale of the 170,000sqm Messe Berlin exhibition centre, made up of 26 halls and home to countless international trade fairs, to the newer CityCube, Messe Berlin can host events on almost any scale. Opened in May 2014 and covering two levels, each of 6,015sqm, CityCube is symbolic of Berlin’s emergence as a new capital on Europe’s conference and events scene.

Then there’s the iconic Fernsehturm television tower, which gives visitors a panoramic view of Berlin and is hugely popular for events. Many other conference halls can of course be found throughout the city, but new inspiring spaces are attracting startups and creative companies.

Hotels like the 25hours Hotel Bikini, named after its distinctive shape, lets guests enjoy a better work-life balance by creating a relaxed and informal atmosphere. For example, up to 100 people can be accommodated in the Freiraum function room in the 1920s radio tower, which offers views over Berlin Zoo and the city, as well as a wall of plants to brighten up the space.

25hours Hotel Bikini

Getting around

Getting to Berlin by air is hassle-free, with direct flights originating from London City, Heathrow and Gatwick all taking under two hours. The city is served by two main airports, centrally located Tegel and Schönefeld. Landing in Tegel, the busiest of the two – and only 8km away from the city centre of Berlin – is usually the best option for business travellers, due to the compact design making it easy for passengers to move quickly through the airport and onto their flight.

Schönefeld is positioned on Berlin’s southern border, and while slightly further out than Tegel, the airport is just a few minutes walk from a S-Bahn rail station, which offers a direct connection to central Berlin in under 40 minutes. The public transport system in Berlin is very efficient and offers a relatively quiet experience when compared to the underground in London, especially during the rush hours – just remember to validate your rail ticket before boarding.

Finding one of the over 50,000 cream-coloured German taxis is generally easy and thanks to strong regulation it’s unlikely you’ll be taken for a ride in terms of the fare.

In my experience, Berlin feels very safe at all hours and air pollution levels are lower than other European cities, partially due to strict rules on diesel vehicles and low rates of car use.

Where to stay?

Hotel prices across the city are notably lower than most other major European capital cities, meaning visitors can get a luxury five-star hotel in Berlin for the price of a solid four-star hotel in central London. However, during the frequent conferences, trade fairs and major corporate celebrations prices can creep up.

Western Berlin, especially around the famous Kurfürstendamm avenue, houses a large number of modern hotels catering for all budgets. Although several high-end hotels can be found in the eastern part of the city, namely the Hilton, Sofitel and Adlon Kempinski, the transport infrastructure and visitor facilities are lacking compared to the west.

It’s hard to miss the Waldorf Astoria Berlin as you exit the Garten U-Bahn station opposite the hotel. Set in the Zoofenster skyscraper at the heart of West Berlin, the famed Waldorf Service starts as soon as you enter, with guests greeted by relaxing music played live by the pianist in the lobby. The lobby itself is decked out in lavish materials, with black Portoro marble columns adorning the area and an elegant staircase above a decorative pond leading to the mezzanine level.

The Waldorf Astoria Berlin has worked hard to offer spaces to suit all type of meetings and events. Bathed in natural light, the 332sqm ballroom is ideal for grand banquets and major conferences or for smaller events select one of the four conference rooms ranging from 70sqm to 139sqm. The on-site ROCA all-day dining restaurant, offering seasonal and Mediterranean cuisine, is the perfect place for an informal business lunch or after conference get together.

The boardroom at the Waldorf Astoria

As you would expect at a hotel of this level, even the standard King Guest room is furnished with a king-size bed, dressing table, large dining table, spacious wardrobes, Nespresso machine and marble-clad bathroom. The little touches of Salvatore Ferragamo toiletries, faultless concierge and, of course, full length windows providing city views, make the Waldorf Astoria one of the best hotels in the city for travellers.

The massive transformation the city has undergone over the past almost 40 years can be seen most strikingly in Potsdamer Platz. Major development projects have turned this once barren area into a sprawling urban plaza, housing Daimler, the Sony Centre and the Beisheim Center. The Ritz-Carlton Berlin can be found in the latter of these developments, south of the Reichstag, Germany’s parliament building.

From museums, shops and attractions, the Ritz-Carlton is perfectly placed to explore the city and encounter the Holocaust Memorial and Brandenburg Gate. The 303-room hotel is a short taxi ride from Tegel airport or a 35-minute rail journey from Schönefeld and employs arguably the best concierge in the city, Thomas Munko, president of the German International Concierge Association. No request is too big or too small with a simple phone call unlocking the most exclusive restaurants and hard-to-find tickets for corporate entertainment.

The Club Lounge on the 10th floor, accessible to guests of the 25 Club rooms and seven suites on the adjacent floors, offers a complimentary food selection and cocktails, as well as a dedicated Club concierge on hand to arrange private shopping trips and many other excursions. Club guests can enjoy these benefits in a private and discrete setting, away from the hotel’s public areas, making this lounge ideal for finishing up last minute work in a quiet environment.

The in-room decor is decidedly traditional and features classic, well-appointed furniture, alongside modern technology, like the bedside control panels, and high-spec bathrooms replete with Asprey toiletries. The Brasserie Desbrosses restaurant located on the ground-floor offers European cuisine served in a laid-back setting, with part of an original 1875 French brasserie in southern Burgundy having been tastefully incorporated into the interior.

A total of 1,800sqm of meeting space in available at the hotel, with an impressive 910sqm ballroom taking centre stage. Few hotels in Berlin can match the state-of-the-art technology employed by the Ritz-Carlton’s meeting rooms, as well as their extensive meeting rooms that can accommodate up to 1,500 delegates.
Also great for business is the super-stylish Ellington Hotel Berlin, which has extensive conference facilities backed up by state-of-the-art technology.

Ritz-Carlton

Out of hours

Upscale restaurant ULA Berlin, a contemporary Japanese restaurant and bar, provides the perfect setting for after work get-togethers. Located in the Mitte district, hidden away from the tourist hotspots down Anklamer street, ULA Berlin has created an exclusive and private environment. Diners can sample from traditional dishes like Japanese radish salad with boiled prawn and sea bream sashimi and Monkfish tempura with seasonal vegetable tempura, alongside indulging in the extensive sake selection.

In between meetings, be sure to make a stop at the unique galleries and museums found on Museum Island on the Mitte district’s Spree river. This museum complex, made a UNESCO World Heritage Site in 1999, contains objects from almost 6,000 years of civilisation. Restaurant Quarré at the Adlon Kempinski Hotel is also a great place for a quick business lunch or for an evening entertaining colleagues. While the light international cuisine is more than enough to warrant a visit to Quarré, prospective clients will be impressed by the grand terrace with views of the Brandenburg Gate.

Berlin is often characterised as gritty and full of concrete, but close to one-third of the city is comprised of green spaces, rivers and lakes. The Grunewald forest is an ideal place to decompress after a day of meetings or to visit the abandoned US spy station on Teufelsberg hill. The 3,000-hectare forest also contains the small, but perfectly formed, Haus am Waldsee, home to a perfectly curated showcase of contemporary art.

From emerging eastern Berlin to buzzing City West, this international powerhouse is easily accessible from European countries, with regular flights and rail services opening up this once closed capital. The long-delayed $6bn Berlin Brandenburg Willy Brandt airport, which is expected to open within the next few years, will soon replace Tegel airport and make it even easier to reach Berlin.

The Messe Berlin exhibition centre

Welcome to a new way of working


They’re known as the ghost desks – workstations that sit silently in the corner of your office, vacant, gathering dust and draining your business of money. And businesses have every right to be spooked. Under-utilised office space is costing billions of euros each year; a punishing legacy of an outdated working culture geared towards fixed hours at a fixed location.

Happily, times are changing. Today’s business owners are recognising the need to think flexibly, re-imagining the world of work to save, but also developing new practices that bring out the very best in their employees.

The way in which office space is consumed is developing fast. Taking space on an as-needed basis makes sense for businesses that no longer want to be locked into long-term fixed and inflexible leases. After all, why pay for an office with 30 desks when only 15 are ever occupied?

Think fast, work smart

Flexible workspace is giving businesses of every size the freedom to act fast and make better decisions. A firm wanting to open a new division or department can do so immediately, secure in the knowledge that essential IT and front-of-house administrative matters are taken care of by the workspace provider. New teams can simply turn-up, plug-in and focus immediately on core tasks, with no wait for leasing negotiations or re-location logistics.

A recent Regus survey of business professionals outlines the importance placed on flexibility. When faced with two similar jobs, nine in ten professionals would select the one offering flexible working and half of respondents agreed they would ‘actively change job’ if one with more flexible working was offered.

Unlike previous generations, workplace flexibility is no longer regarded as a perk – rather, it is expected. By positioning themselves in a more agile fashion, businesses can cast their recruitment net wider – location no longer being a handicap to securing the best employees.

Catch the co-working buzz

Working flexibly does not mean working in isolation. The same Regus survey identified that nearly nine out of ten professionals believe co-working “helps curb loneliness for home-workers”. Co-working is one of the biggest workplace trends of the moment, describing a workspace that is occupied by individuals from a number of different companies and that encourages networking and collaboration.

These environments are specifically created to foster innovation and drive productivity, with employee wellbeing firmly to the fore when it comes to the design of communal areas such as cafes, bars and activity-led breakout areas.

Regus is at the forefront of this trend, with a growing network of over 3,000 locations in 120 countries worldwide. Today, conversations between Regus and business leaders cover the financial benefits of a more flexible workplace approach. But the conversation moves beyond the financial – namely, how to provide the best environment for workers, so that they in turn might provide their best work for you.

Further information
www.regus.de

BLOM: driving a new era of Lebanese banking

Saad Azhari


BLOM BANK of Lebanon has been consistently recognised as the country’s best performer by a range of leading regional and international industry voices. Its business operations are based on a universal banking model that spans a range of divisions including: commercial banking, investment and private banking, asset management, insurance, retail and Islamic banking. It’s this breadth of expertise that has seen the bank continue to expand and progress in challenging circumstances. BLOM BANK is looking to strengthen its regional presence in the medium-to long-term through a balanced growth strategy that adheres to its conservative but rewarding business model.

The European caught up with Chairman and General Manager, Saad Azhari, to discuss the bank’s strategy and the market in the Middle East.

Please tell us how BLOM BANK came to be established.

Saad Azhari: BLOM BANK was established in 1951, primarily as a commercial bank. True to its name as Bank of Lebanon and Overseas (Banques Liban et O’uter Mer), it branched out to Saudi Arabia in 1953. In the 1970s, as a result of the Lebanese civil war, it expanded to Europe and the UAE to serve Lebanese and Arab expatriates.

In the 2000s it prospered as a full-service, universal bank, specialising in corporate, retail, private, investment and Islamic banking, in addition to asset management, capital markets, and insurance services. It also expanded into new countries in the region: Jordan, Egypt, Qatar and Iraq. It is currently present in 12 countries in Europe and the Middle East. It serves niche markets for Arab clients in Europe and operates as a full-fledged local bank in countries of the Middle East.

Technology has changed the banking landscape over the last decade, what’s been the key for BLOM BANK to ensure you remain at the forefront of innovation?

SA: BLOM BANK is reputed to be a conservative bank, but it is also highly innovative and constantly creates products and services that are world-class and at the cutting-edge in terms of digital technology. This arises from our belief that although banking is basic and fundamental, its modes of delivery must change to meet the changing needs of our customers and to ease the channels of communicating with them. That is why we were the first in Lebanon to initiate e-banking, to develop e-Cash, and to launch the NEXT programme for youth, to name just a few. We are capable of doing this because we devote enough resources to strengthening our IT capabilities and because of our talented and dedicated staff.

There is also the additional factor that emanates from the tough competition in the domestic market, as well as in foreign markets, which always acts as an incentive to work harder and to rise above and beyond the competition.

Why do you think BLOM BANK has become the banking partner of choice in Lebanon?

SA: BLOM BANK’s motto is ‘Peace of Mind’ and it is a motto that the bank adheres to by word and deed. This translates to the bank making sure that its products and services are not only innovative and remunerative but also safe. We spend a lot of time designing services that meet our clients’ return profiles but with the minimum risk possible; and we also work hard that these services abide all regulatory and compliance standards.

Besides the quality of our products, there is also their diversity that spreads over the entire banking spectrum. And combined with our regional spread, BLOM BANK is able to offer its clients the opportunity to engage in banking and financial activities across different countries and across different services, maximising synergies and the benefits from cross transactions.

Despite fluctuating economic conditions in the Middle East, BLOM BANK has achieved an increase in its net profit. Please highlight how.

SA: BLOM BANK’s net profit in 2016 increased to $463.3m, higher by 14.61% on 2015. This implied a return on average common equity of 17.43%, and a return on average assets of 1.58%, both the highest among listed Lebanese banks. And as noted, this was accomplished in difficult circumstances amid a politically unstable domestic environment, at least up until the fall of 2016.

The bank was able to achieve this performance mainly due to three reasons. First is its ability to diversify over products and countries such that its profits arose from different banking activities and from foreign as well as domestic markets. Second are its conservative credit and investment policies and its priority to control banking risks and cost. This is reflected in the bank achieving a capital adequacy ratio of 19% (against a required ratio of 14%), a primary liquidity ratio of more than 70%, and a cost-to-income ratio of 35.81% (the lowest among listed banks). Third is its capable and stable management structure and its efficient and experienced staff members, who always give their best to keep BLOM BANK as the best bank in Lebanon and the one with the most industry recognition.

BLOM BANK serves a niche market of Lebanese and Arab expatriates in Europe. How does this set you apart from your competition?

SA: As mentioned earlier, the bank moved to Europe in the 1970s to cater for the banking and financial needs of Lebanese and Arab expatriates. What sets BLOM BANK apart from the competition in this niche market are several things. First is that we have a first-mover advantage since we were among the very first Middle Eastern banks to expand to Europe. Second is the diversity of our products, which covers all bases across corporate and private banking services and trade finance. Third is the fact that we are present in more countries: France, Switzerland, England, Cyprus and Romania. Last, but not least, is the quality of our products and services and the opportunities that they represent to all our clients for cross transactions with countries in the Middle East region and beyond.

Is there a particular highlight over the last 12 months for BLOM BANK?

SA: I think the most notable event is the conclusion of a sale and purchase agreement for the Lebanese operations of HSBC. The agreement became effective on 16 November 2016, following many months of negotiations. We competed for the deal with no less than eight Lebanese banks. HSBC has three branches in Lebanon; employs around 200 people; and generates around $20m in net profit annually on deposits of some $820m and loans of $520m equally divided between retail and corporate. It is also highly active in trade finance. As part of the agreement, we will retain all employees.

We are currently working on getting all the final approvals and expect the operation to be fully merged by end of June 2017.

Further information
www.blombank.com