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Building Dedicated Capabilities for Institutional Clients in UAE and Beyond As the influence of non-bank financial institutions (NBFIs) continues to grow, the need for these organisations to access to sophisticated, integrated banking services, also continues to grow.

Building Dedicated Capabilities for Institutional Clients in UAE and Beyond

by Padmanabha Mishra, Executive Vice President, Institutional Clients Group, Abu Dhabi Commercial Bank

As the influence of non-bank financial institutions (NBFIs) continues to grow, the need for these organisations, from insurance companies through to asset managers, private equity and commodity brokers, to access to sophisticated, integrated banking services, also continues to grow. In this interview, Padmanabha Misha, who is responsible for the NBFI business at Abu Dhabi Commercial Bank (ADCB), discusses how the bank supports both the regional and global banking needs of these organisations.

How has your previous experience working with large international banks contributed to this role?

Having worked at various banks in different locations in the past, I have developed a deep awareness of the diversity of cultures that exists across the banking community, both organisationally and in the countries in which they do business. Consequently, when I joined ADCB, creating and maintaining a creative, inclusive and transparent culture, both within the business and in the way that we engage with our clients, was a key priority.

Initially, I joined ADCB to head up our financial institutions business, which was effectively limited to correspondent banking at that time. However, one of the features that attracted me to ADCB was the exciting strategic development that was taking place, and it soon became clear that we had the opportunity and ability to transform our business in order to offer a comprehensive product range across investment banking, corporate banking, retail banking and asset management. Non-bank financial institutions (NBFIs) were a clear part of this strategy, so it was a privilege to take on responsibility for this key client segment.

How have you gone about developing the NBFI business?

Building a leading NBFI business at ADCB has included a number of key elements. One of the first things we did was to take a targeted approach to ensure that we were attracting and retaining the clients that we were best equipped to support. We therefore invested in strengthening these key relationships and enhancing the value both for our clients and the bank.

Secondly, we restructured our internal business to bring together into one place solutions and services that we were already offering to insurance companies, asset managers, private equity firms and commodity brokers. This has enabled us to dedicate the right resources and expertise to meet our NBFI clients’ specific needs, which has proved highly successful.

Thirdly, given that ADCB is a regional bank that prides itself on its depth and quality of relationships in the Middle East, rather than operating as a global bank, it was key that we forged relationships with partner banks that would enable us to offer the depth and quality of international, as well as regional, solutions and coverage that our customers required. Following a careful and thorough review of suitable partnerships, in 2011, we signed a key strategic partnership with Bank of America Merrill Lynch. This alliance would allow both ADCB and Bank of America Merrill Lynch to offer integrated solutions and services that leverage each other’s strengths and capabilities in our respective areas of expertise.

Galvanised by the success of the relationship with Bank of America Merrill Lynch, we signed a second strategic alliance in November 2012 with Santander. This partnership enables us to consolidate our global services and solutions, and was signed by the Chairs of both banks, demonstrating our strong mutual commitment to leveraging our relationship for the benefit of clients.

How do these relationships differ from other banking alliances?

In my experience at other major banks in the past, I have seen a number of banking alliances, but these have been managed quite differently from the partnership between ADCB and both Bank of America Merrill Lynch and Santander. In particular, they are often quite generic in nature and lack the focus, common culture and commitment to joint goals that characterises our partnership. We work together to pitch jointly for new customer business, and hold regular steering committee meetings to review and refine our value proposition and performance. With considerable value to both parties, we have a strong mutual interest in ensuring the success of the partnership by deepening client relationships and expanding our offering into new target client segments.

While financial institutions seek to operate internationally, they do not have the capacity or desire to establish a direct presence in each market, so forming the right relationships with banks that offer complementary services and a common ethos to client engagements is becoming more important than ever. ADCB, together with its partners Bank of America Merrill Lynch and Santander, has pioneered the formation of proactive alliances that benefit both the parties involved and their clients, as opposed to supporting clients’ international requirements through expansion or acquisition, which brings with it considerable cost, risk and the potential for less sophisticated solutions and services in each market.

As the regulatory environment continues to evolve, with increasing scrutiny and complexity, the cost of compliance for financial institutions is spiralling. Consequently, we anticipate that the type of partnership forged between ADCB and both Bank of America Merrill Lynch and Santander will form a blueprint for other banks to follow in the future. Other industries, such as the airline industry, have an established track record with successful alliances such as OneWorld, and there is considerable incentive for the banking community to achieve a similar integrated network to offer global coverage to clients without adding substantial risk or cost.

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