Asset management

Bahrain Middle East Bank: A bank for banks

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Korhan Alev, CEO of Bahrain Middle East Bank, reveals his thoughts on current market conditions and the role the bank plays in it

editor's pickSunday 12, August 2018

Tell us about BMB.   

The bank was founded in 1982 and started as an investment bank. That was the era of investment banking where the bank was successfully managed. We hold a wholesale bank licence, which also permits investment banking. Nevertheless, with the new shareholder structure and management, BMB has changed its course from investment banking to a wholesale one. BMB now specialises in all aspects of trade finance, treasury and capital markets, asset and portfolio management as well as correspondent banking service.   

How do you place yourself as a bank?  

 We are majorly the bank for financial institutions. We have a long history and strong presence in GCC. We also have our associates in Europe. This enables us to be the window or the bridge between GCC and Europe. Our clients are our partners, and we mean that as we are there for them as a solution to their needs through the services we provide. We’re having a good year so far, as year-to-date the bank has been positively performing and has been successful in implementing its upscaling strategy along with its business expansion plan. With its firm network, BMB has been able to recover ground with institutional relationships, reciprocity of business and attracting clients.   

The bank’s presence is getting recognised in the GCC region as well as across Europe and Asia. BMB was able to increase its paid-up capital to $100 million, with the change of major shareholders of the bank. The current major shareholders are keen to upswing the bank in its presence and perseverance. Given the strategic support, business and financial foresight provided by the incumbent major shareholder, the bank has been able to nearly double its total assets. BMB now plans to focus on being a bank for the regional smaller financial institutions and for the foreign financial institutions seeking to enter the GCC market and build a cohesive platform for the respective introduction to regional markets.   

 What makes you optimistic about the market you are operating from?   

The discovery of new oil and gas reserves in the Kingdom of Bahrain, its wherewithal to sustain the tide through rough times and the strong support from neighbouring countries like Saudi Arabia and UAE, are factors that make me optimistic. Also, one key aspect to take into consideration is the highly educated & skillful local workforce who are committed and dedicated, along with the experienced expat workforce that blend well into the commercial and social life of the Kingdom, thus we are optimistic to operate and expand from our Bahrain base. We see huge opportunity in the trade finance business within the region and across other parts of the world. We also see opportunity in the regional debt issuance from sovereigns and the flourishing capital markets, which are likely to provide an opportunistic play.   

Looking into the future, what would you say is the biggest threat to financial institutions?   Trade wars, currency manipulations and unregulated cryptocurrencies are the focal concerns to an otherwise smooth global economy. Central regulators of certain nations are required to be prudent to take the global economy along with them, rather than to run ahead. The fintech revolution is bringing lots of opportunities and efficiencies to financial institutions, emphasising institutions to shed fat and increase energy.  

How do you view the present regulatory environment?  

Banks in Bahrain are well regulated by the Central Bank of Bahrain and the Ministry of Industry and Commerce. Compliance and financial reporting are fervently reviewed by the central bank. This, along with other arms overall impact, owing to the banks’ good investment quality, limited trading activities, and largely holdto- collect or hold-to-collect and sell, business models. IFRS 16 is a new era of lease accounting. First time application of the new standard is likely to be challenging and early engagement to determine the most appropriate option for the business circumstances is critical. Most businesses in the region are behind the curve and they must speed up their efforts and get ready for IFRS 16. In light of the tariff wars, Alev is adopting a prudent and an on-guard approach for the near-term. of the Government, provides an extensive guidance for the banks to mark their tracks and succeed well. The government also promotes ease of doing business, which has made the Kingdom a banking hub.  

How has IFRS9 impacted financial institutions? And looking forward, how do you see IFRS 16 affecting the market segment?  

As was anticipated, the overall impact of IFRS 9 appears manageable. Classification and measurement under IFRS 9 had little influence on the overall impact, owing to the banks’good investment quality, limited trading activities, and largely hold to-collect or hold-to-collect and sell, business models. IFRS 16 is a new era of lease accounting. First time application of the new standard is likely to be challenging and early engagement to determine the most appropriate option for the business circumstances is critical. Most businesses in the region are behind the curve and they must speed up their efforts and get ready for IFRS 16.

What are your projections on your market segment for the rest of the year and going in to 2019?

With all coefficients remaining constant, we foresee a result well above our forecast for 2018. 2019 will be our year to push boundaries. Should political and economic factors remain subtle and nature be benevolent, we foresee robust growth in the financial sector and in global markets. However, the tariff wars that bear on the trade and financial sectors may lead to downturn in the global economy. We take a prudent and an on-guard approach in the near-term.   

 Up-close and personal Why did you choose to become a banker?  

A very good question. My parents were both bankers and I remember my dislike of a banking work day, as it kept them away from me, as back then there was no digitisation and they had to work late hours. But I still became a banker. I received a full scholarship from Türk Ekonomi Bankası (TEB) to undertake my MBA, in return for an employment bond with the bank. My plan was to work for the bank for the asked period. Nevertheless, once I started, I began to realise my love for the job. And ever since, I found myself to be very passionate about banking.

 How long have you been in the banking business and which areas have you worked in?

  I have been in banking for 25 years. I started my career as a Management Trainee for TEB Turkey which is currently a JV with BNP Paribas. After the training, I joined the Corporate Marketing Department of the main branch, where I worked for five years. Thereafter, I worked at a few banks and ended up at Bahrain Middle East Bank (BMB). I have worked in Treasury, Branch Management, Financial Controlling, Credit, Credit Restructuring as well as Credit Marketing. Prior to joining BMB in late November 2017, I was working in Frankfurt, Germany.  

This must have been a big change for you. What were your thoughts?  

In terms of climate, I would say yes. From a colder country to a quite warm country. But, as you can see, I am easily adaptable. I lived in various parts of the world, such as USA, UK, Netherlands, and Germany. Therefore, it did not take me too long to get adapted to a new region, to be honest. On the other hand, in terms of cultural change, being Turkish, it was easier to assimilate into the regional culture quickly. I try to attend as many social events as possible. This helps me network with friends and colleagues in the industry.  

Outside of banking, what are your interests?  

I am very much into sports—I gym as often as I can. I am very fond of kitesurfing and snowboarding. There are several kitesurfing areas in Bahrain where I frequent, and it has become quite a relief after a busy week. I also do scuba diving and fishing, and Bahrain has numerous areas to explore when we have the appropriate weather. Other than that, I also love travelling and cooking. I also read and watch movies in my free time, specifically history and science-fiction. In our work, we need to think fast, decide fast and act fast. Even after all these years, these create stress. Thus, I believe it is always nice to have some hobbies so that one can refresh the body and the mind.  

What is your personal management style?

 An open management system that permits everyone to work through solutions and tap on the management when required. Our work requires to be within the established ethos of the organisation. I strongly believe in teamwork and try to choose the right team members to establish the team. Although I am a professional in the job, I work like an amateur. I try to choose similar team members so that we all can put all our hearts in what we do.  

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