Adel Al Majed, Boubyan Bank CEO and vice chairman, talks to Global Finance about the impact of the pandemic on the bank and how business will endure.
Global Finance: How was the past year of pandemic for your bank?
Adel Al Majed: During the crisis, the bank’s strategy that has been adopted for years by investing in and expanding our digital services confirmed its success and importance in light of the circumstances that the world and Kuwait are going through.
Boubyan Bank has announced its acquisition of additional shares in the Bank of London and Middle East [BLME], amounting to 45.25%, approximately. Accordingly, the total holding grew to approximately 71% of BLME’s ordinary issued shares after adding the shares already owned by Boubyan Bank Group.
Moreover, Boubyan Bank succeeded in the regional and international offering of its debut unsecured sukuk under the umbrella of a sukuk program, with total bids amounting to $4.6 billion approximately. That is, the issuance was oversubscribed by more than sixfold over the targeted amount [$750 million], with the sukuk subsequently listed on the Irish Stock Exchange.
GF: What do you expect in 2021?
Al Majed: The bank will continue implementing its strategic plans despite the severity of the crisis. The numbers of 2020 confirm that the bank is in an excellent position whether in terms of growth of business, operational activities or profitability, which is considered reasonable despite the decline due to financial provisions.
Our plans continue to focus on the local market, while setting special plans for the Bank of London and the Middle East in London.
GF: Where do you see growth?
Al Majed: In past years, our growth has relied on our retail and corporate banking services as well as the continued growth of our market shares, which reached satisfactory levels. There is still room for more growth while focusing on digital banking services, which garnered more importance after the outbreak of the Covid-19 pandemic. We think that more investments in digital services represent an opportunity for the bank.
GF: Developing small and mid-sized businesses is a key part of Kuwait’s Vision 2035 diversification plan. How can banks play a bigger role?
Al Majed: Kuwaiti banks have gone a long way in supporting small projects in collaboration with competent governmental authorities. Currently, almost every bank has a dedicated department to offer all kinds of support to SMEs. With the onset of the Covid-19 crisis, banks started offering concessional financing as per the Central Bank of Kuwait’s stimulus package to support corporate and SME customers impacted by the ongoing crisis.
That initiative aimed at supporting vital sectors and activities that add value to the Kuwaiti economy and which were efficiently operational before the crisis—while working hand-in-hand with the CBK and competent bodies to prevent any exacerbation of the situation by turning a liquidity crisis. The initiative further focused on maintaining the national manpower and the circular flow of funds between economic sectors.