The entrepreneurial beginnings of one of the largest banks in the country, as well as its track record of supporting Qatari businesses for over four decades, means the Commercial Bank of Qatar (CBQ) understands the fundamental role that SMEs play in Qatar’s economy. CEO Abdulla Saleh Al Raisi explains how the bank aims to ‘wake up’ the private sector by helping budding Qatari entrepreneurs turn their ideas into reality.
You once said, “The world is moving fast, but Qatar is moving faster”. Taking into account the rapid changes in the international markets such as the drop of commodities prices, the lifting of Iran’s sanctions or the raising of interest rates in the US, do you still think Qatar is moving faster?
Despite all the changes and challenges the world is facing, I continue to believe we are moving faster. Qatar does not exist in an economic bubble and we have indeed slowed down a bit, but we are still witnessing robust economic growth in our economy. Continued growth is thanks largely to the government’s wise economic diversification strategy, which is already paying dividends in this time of low oil prices. Inflation-adjusted GDP growth for 2015 is expected to be 3.7%, but what is remarkable is the non-oil and gas sector being set to record double-digit expansion, mostly attributable to construction and services. Qatar has also used its large surpluses from hydrocarbon revenues to create a cushion of foreign assets in the form of the $256 billion Qatar Investment Authority. This makes it clear to me that the proactivity of our people and the wisdom of our government is driving the Qatari economy to a level where it has the respect of other nations.
Commercial Bank has always been committed to community development and to the overall development of the country. How is the bank reinforcing the path towards achieving a knowledge-based economy?
Qatar has a roadmap to achieving a knowledge-based economy in the form of the Qatar National Vision 2030. The government plays a strong guiding role in this transformation but His Highness The Emir, Sheikh Tamim bin Hamad Al Thani, has made it clear that Qatar’s private sector must assume its responsibilities and take the initiative towards achieving the Vision.
As Qatar’s first private sector bank, Commercial Bank shares an interlinked development path with Qatar, and we serve the Qatari community by strongly supporting the Qatar National Vision 2030 as a committed and active partner in the development process. This is important to us as an organization, as we are very proud of our Qatari heritage and still feel part of the Qatari community from within which we were established over 40 years ago.
I was reminded of our connection to the Qatari community only recently when we reopened a newly renovated branch in the small town of Al Wakrah, near Doha. The opening ceremony involved viewing a video of the people and staff who first opened the branch decades earlier and some of those present were moved to tears. They all felt the sense of continuity and the determination of Commercial Bank to give back to our community as much as possible in return for what we have gained over the years.
Going back to the Qatar National Vision 2030, Commercial Bank contributes to Qatar’s economic development through our everyday banking activities, financing major infrastructure projects that are driving private sector growth, and by supporting the development of Qatari SMEs that are essential for economic diversification and new sources of innovation.
Moving beyond the economic pillar of the Vision, Commercial Bank proactively strives to be an outstanding corporate citizen by supporting the Vision’s human and social pillars through a range of socio-economic initiatives as part of our CSR program for the benefit of the wider Qatari community.
In terms of diversification of the economy, you have always supported SMEs, which are meant to play a major role, particularly given the new law that is going to be adopted for PPPs, in which 30% of the tenders are going to be destined to SMEs. How relevant is the SME segment for the bank’s operations? What are the future strategies particularly targeting SMEs?
Commercial Bank’s entrepreneurial beginnings and track record of supporting Qatari businesses for over 40 years means we understand the fundamental role that SMEs play in the economy by providing the engine for private sector growth and diversity in line with the Qatar National Vision 2030. This sector has been asleep for some time, and now it is time for it to wake up, which cannot be done without the support of the financial institutions. There are some brilliant young, well-educated Qataris who are willing to take the challenge and risks to develop their own business. You can see the future in their eyes, which gives us much comfort because we know that these people have an enormous potential.
SME banking is a core part of our business and we have a dedicated department providing specialized services and also advice, given the fact that in most cases SMEs are new entrants into the market and they require a management style and processes that are more informal than for large corporations. We have assigned special relationship managers for each one of these businesses to make sure that everything is in order, thus minimizing the risk of default.
We have also signed an agreement with Qatar Development Bank, called Al Dhameem, in which we provide loan facilities to enhance existing SME businesses or to finance new ones. And have previously collaborated with the Qatar Stock Exchange through a joint workshop to educate small businesses about the opportunities to list on the Qatar Exchange Venture Market.
You also mentioned infrastructure development, since it is another key aspect that aids politically sustained mid-term growth of the economy. How is Commercial Bank particularly involved in developing the country’s infrastructure?
Qatar will spend nearly $200 billion over the next decade on infrastructure projects as we move close to the FIFA 2022 World Cup. Despite the fall in oil prices, Qatar’s Minister of Finance has stated that it will be “business as usual” in terms of these projects’ execution. Commercial Bank remains strongly committed to supporting and financing the development of these major infrastructure projects, which are essential for both accelerating Qatar’s private sector growth in the near term and staging a successful World Cup in 2022. You name an infrastructure project in Qatar and Commercial Bank is probably involved in financing it. We are very close to the project contractors and provide financing, as well as tender bonds and performance bonds.
There are 18 banks operating in Qatar at the moment, in a rather small market. You are the second largest bank in the country and you have kept on growing for more than 40 years. What are the main competitive advantages for Commercial Bank when you look at the Qatari market?
Competition in the Qatari banking sector is certainly high and to enable us to continue our profitable track record achieved every year since incorporation, our strategy has been to focus on providing high quality, innovative services. This is what distinguishes us from the competition and we are proud to be the leader in Qatar for quality of service and innovation. Quality of service is what we believe matters to our customers most and this is why our customers choose to bank with us and stay banking with us for the long haul.
2015 was the 40th anniversary of Commercial Bank. In your opinion, what have been the main achievements and highlights in these 40 years of operating in the country?
There are some common threads behind almost all our activities since we opened our doors for business in 1975, namely ambition, entrepreneurship and innovation, that reflect on the spirit of our founders who brought a different concept of banking to Qatar. I believe our achievements in terms of innovation have been particularly striking, and we were the first bank to launch numerous products and services in Qatar, such as personal and vehicle loans, credit and debit cards, ATMs, a ladies’ branch, and electronic point-of-sale machines. We wanted to give the banking industry a different flavor and were determined to bring products and services that keep our customers satisfied. When we see a smile on the face of our customers, that is enough for us.
By being innovators, we have gained over the years the respect, admiration and, most importantly, the loyalty of our customers. To maintain this loyalty, investment in technology is a high priority at Commercial Bank and a central part of innovation and enhancing our services today. This is perhaps most visible with our internet and mobile banking services, and today we lead the Qatari market in digital banking, bringing the ease and simplicity of our banking services to our customers’ smartphones and tablets from anywhere, anytime.
You have had different regional alliances with the National Bank of Oman (NBO) and United Arab Bank (UAB). And you have expanded internationally to Turkey. How do these expansions fit within the mid-term strategy of the bank?
Commercial Bank is always trying to find the right opportunities, whether locally or internationally. Extending our sights and ambitions beyond Qatar, we first looked within the GCC as these countries are similar in terms of language, customs and way of living. Our associate banks (National Bank of Oman in Oman and United Arab Bank in the United Arab Emirates) have diversified our income streams, and despite the difficulties that Dubai is going through at the moment, we believe it is a profitable market and that there are plenty of opportunities to grow there even more.
Building upon this regional expansion strategy, we acquired a majority stake in a Turkish bank, ABank, in 2013. The current political situation there and the depreciation of their currency is presenting some short-term challenges, but in the long run Turkey has the potential to become one of our leading subsidiaries as the trade and economic links between the GCC countries and Turkey grows ever stronger. Our diversification efforts have proved successful to date and we are always willing to consider new opportunities in different markets as part of our growth plan.
What have been the main highlights for you during the last 15 years working for Commercial Bank?
I believe Commercial Bank has been blessed by several factors. I will start with our founders, eight of Qatar’s most respected businessmen who established and led the bank from inception to where it is now with loyalty and dedication. They went through many difficulties and could have easily lost heart, but they were determined as they believed they would create a revolutionary change within Qatar’s banking industry. They started with QAR 10 million ($2.75 million) and look how much the bank is worth now 41 years later.
These founders gave us our inspirational values to be proud of and to always uphold as an organization, and often we refer to the bank as if we were discussing our kids and family. I remember in our corporate video that one of the speakers was a Qatari gentleman whose father had opened a minor account for him, and 20 years later he is still proudly banking with us, talking about his experience with Commercial Bank as if he was talking about his first love. This means a lot to us and we must continue to take these values to the next generation.
The family atmosphere within Commercial Bank is also a subject I like to mention. Yes, we disagree, but we are family in the end and this is a culture you do not find in other banks. Commercial Bank is, as my wife says, my second family.
Can you describe your professional journey, starting from university studies to becoming the CEO of Commercial Bank of Qatar?
When I was younger, I thought banking would be the very last option I would consider for a career. My father – who passed away 30 years ago – was also a banker, and I remember seeing him arriving home extremely exhausted and people were always knocking at our door with papers to sign and demands which would go on long after official business hours were over.
My university studies in political science did not directly prepare me for a career in banking, but it did teach me a great deal about people, and you can’t be a successful banker without first understanding people. After my graduation, I worked for four years in organizations in Qatar and the GCC before moving into banking in pursuit of better opportunities.
Looking back, an arts degree has not hindered my career at all, and I have come to fully appreciate the significant role that higher education played in my personal and professional development in my career years later. The value of education and training is also recognized and prioritized at Commercial Bank, and we invest a large amount of time and resources to developing Qatar’s human capital by sponsoring students through universities at home and abroad, on-the-job training and several proprietary career development programs to help Qataris reach their full potential.
Finally, I’m pleased to see that US universities are offering a first-class higher education experience for Qataris on home soil in Qatar Foundation’s Education City.
Has Commercial Bank provided a particular environment for you?
Absolutely. It was when I first started working in the banking industry that I discovered that I’m a people-person, and I enjoyed the new opportunity to interact with customers, and soon after managed to build a strong customer base.
I was then approached by Commercial Bank, but I was reluctant to join at first as it was a different culture to my previous employer. Commercial Bank then – as it still does now – required a very strong professional commitment, but I wanted to develop and challenge myself. My time at Commercial Bank since 1998 has been a continuous development process in which I’ve gained a vast amount of knowledge and experience, and I’m grateful for the opportunity to become fully immersed in the banking industry and to meet a wide variety of high-net-worth individuals and government officials.
What has changed since I first joined Commercial Bank is that support in the form of employee education and training is now much more systematic and comprehensive. As a Qatari bank we have a duty to develop Qatar’s human capital in line with the Qatar National Vision 2030 and I’m proud to say that Commercial Bank goes beyond the role of just an employer to our Qatari workforce as we also act as a school and university too.