‘The global economic situation of 2008 is the biggest economic meltdown since the 1930’s, when there was a great depression in the US as well as the rest of the world. The only difference is that the governments this time are well aware of how to tackle it’

‘Silkbank has just recently come into existence but it has been there for quite a while, we have just re-branded. We have not just changed the name, but we have also strengthened the bank’s balance sheet. We have strengthened its policies and procedures, and we have improved the customer service’.

Ghaus Abdul Nisar interviewed Azmat Tarin, the president and chief executive officer of Silkbank.

Silkbank was formerly known as the Saudi-Pak Commercial Bank. Their new name takes its inspiration from ‘Silk’, a natural element known for its unique properties. Their inspiration also comes from the Silk route that has been a corridor for trade and commerce between Asia and the rest of the world for centuries.

GAN: Please tell us a little about yourself.

AT: I am the president of Silkbank, which was formerly known as the Saudi-Pak Commercial Bank. I started my career back in 1989 in the US. After graduating and acquiring an MBA from a university in Los Angeles, I worked in Saudi Arabia. Then I came back to Pakistan and worked for 10 years at Union Bank as the head of retail. Then when we took over the Saudi-Pak Commercial Bank about a year ago, I joined my current company as the executive director when Mr. Shaukat left Silkbank to join Ministry of Finance, I took over as president of the bank.

GAN: Tell us about Silk Bank.

AT: Basically this was the Saudi-Pak Commercial Bank and then an international consortium comprising of the International Finance Corporation (IFC), Bank of Muscat and Namura Investments bought it. The IFC is an investment arm of the World Bank (WB), the Bank of Muscat is the largest bank of Oman, and Namura Investments is the largest investment bank in Japan. These three banks got together and took over the Saudi-Pak Commercial Bank almost a year ago. After that, part of our strategy was to recapitalise the bank and make it better and also try to re-brand it. In the process of re-branding, we went through several names and finally came up with this name, Silkbank as it is called now.

GAN: What would you say regarding the corporate governance of the Silkbank?

AT: Wherever banks like the IFC, Bank of Muscat and the Namura Investments would be involved, governance becomes the basic framework of the entire project, without which we cannot make progress and move forward. So the first thing that we did after taking over the bank was to recruit some of the top bankers in the senior management, who had earned their names in the market. We have hired bankers who have not only worked here in Pakistan but have also worked and gained experience abroad.

Apart from that, our board comprises of all the well-known people in Pakistan’s banking circle. Munawar Hameed is our chairman, who was previously the chairman of ICI as well as the chairman of Standard Chartered Bank, and the rest of our directors are also very renowned. We have laid great emphasis on the corporate governance at Silkbank.

GAN: Please talk about your current strategies.

AT: Right now we are in merger talks with the Atlas Bank and if that goes well, then our network, which comprises of 65 branches, will increase to 105 branches. But if that does not happen, then we plan to grow organically. We will just keep on adding more branches. We plan to add 20 more branches this year and by 2013, we plan to have a network comprising of 150 branches.

GAN: What products and services are you currently offering?

AT: On the products side, we already have a very robust corporate bank and we have started the investment bank that is doing very well so far. We have a very strong team in place and you know our commercial bank is also there. We used to offer consumer loans but we have stopped giving those temporarily, for a short period of time. But that does not mean that we are not going to offer them in the future. We launched our Visa Debit card on the 1st of this month and we are about to introduce our Visa Credit Card some time in the next three to four months. Besides that, we plan to bring re-introduce consumer and personal loans.

GAN: Tell us about Silkbank’s branch networks.

AT: We currently have 65 branches in 25 cities, and we are planning a merger with the Atlas Bank and if that happens successfully, then we will be adding another 105 branches to our network. By the year 2013, we want to expand our network to 150 branches. But in the middle if some merger takes place, and I say that because if you look at the track record of our current team, you will see that in Union Bank we had a merger with the Emirates Bank. Then we took over the Bank of America and the American Express Cards. So in the same way, we have different plans of going through our acquisitions organically.

Even right now, we are moving forward very rapidly. We have the state-of-the-art online banking facilities and the same goes for the rest of our products and services. Silkbank is a full-menu bank.

GAN: How would you comment on the current world economic scenario?

AT: The global economic situation of 2008 is the biggest economic meltdown since the 1930’s, when there was a great depression in the US as well as the rest of the world. The only difference is that the governments this time are well aware of how to tackle it. Back in the 1930’s, the governments were relatively slow to react. But this time as you can see in the US, UK and Europe, they are trying their best to stabilise the global economy.

It definitely had an impact on Pakistan as well. Our textile exports got affected and because of that, the banking sector is getting affected too. But luckily, due to the prudent policies of the Central Bank, the banking sector did not receive any serious blows, and as such our market did not get affected that badly. Currently, there is a huge opportunity for growth in the banking sector. With proper financial backing and guidance, it can prove to be really good for the development of the country.

GAN: How do you see consumer financing in Pakistan?

AT: Our team was the pioneer in launching consumer loans in Pakistan. Starting from Citibank, our team worked towards launching the loans and the credit cards etc. Then we went ahead and did the same thing in Union Bank, and hence consumer loans became very popular in Pakistan. People started buying cars and other commodities, and overall the consumers received a lot of credit.

Now going forward, you know that the interest-rate environment is decreasing slowly. Recently, the interest rate shot up so high that it became very difficult for a consumer to serve. So, if people say that the consumer loans weren’t good enough, it was only because the interest rates went up to such a high extent that it was not possible for an ordinary man to finance them.

Now the inflation rate is slowly coming down, and what we foresee is that, by the year’s end, the inflation rate should come down to nine to ten percent. When that happens, consumer loans will once again become viable, and I do think that the consumer should get part of the credit and at the same time the SME sector and the agricultural sector should also be shaped.

GAN: Is the Central Bank extending its support to the commercial banks?

AT: As per government policy, the Central Bank is supporting the commercial banks a lot. The Central Bank has taken many such actions where they have shown their support to commercial banking. According to what I have heard and read, they plan to give more support in the future as well, and this is not happening only in Pakistan.

For example in the UK, the government has stated that the bank’s losses can be paid off and covered over the next five years. I think over here, the Central Bank has been very proactive and they have supported the commercial banks a great deal and I am sure that they will continue to do so in the future as well.

GAN: What is your message to the people of Pakistan?

AT: I would just like to say that, Silkbank has just recently come into existence but it has been there for quite a while, we have just re-branded. We have not just changed the name, but we have also strengthened the bank’s balance sheet. We have strengthened its policies and procedures, and we have improved the customer service. This is because we did not want to do just one thing. It is just like changing the name of a restaurant; you change the name but the food is still the same so people will come once but they would not come again.

That’s why for an entire year we did not re-brand our bank. It is because we wanted to make sure that the product menus are there, the services are there and the service quality is there. So that once we re-brand, and once the people come in, they see the difference.

GAN: Thank you so much for your time, and best of luck with your plans.

Ends..

Source Information: http://www.dailytimes.com.pk/default.asp?page=2009\06\28\story_28-6-2009_pg15_1

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