In Kuwait most of the banks have made aggressive moves the past three to five years whereas other banks have been more cautious towards growth.  Eventually big banks all around the world have been hit and Kuwait is not any different.  When this happened at the end of 2008 the government took good steps to protect the financial sector and the central bank enacted some regulations to assure the banks it would provide the needed liquidity.  The confidence of the economy is a major factor and the government has a big role in this especially when the stock markets reflect the confidence people have in sectors where shareholders have large stakes.  Overall I think 2010 will be a year of consolidation because of all of the measurements that have been taken and easing of international regulations by the central bank.  We will see more growth in 2011 as a result.

What is the lesson learned by the banking industry, especially in Kuwait?

When you look at Ahli bank in the past we were not very aggressive in the market and we were very cautious.  The lesson learned from this was to strengthen our risk department and investing based on liquidity.  It has been proven that cash flow, visibility of projects, and good management are major factors in the performance of companies.

The financial stability law passed by decree in March 2009 stipulates that the government will guarantee 50% of new loans from local banks to productive sectors.  However, many people we interviewed said that lending was still a major issue.  What should be done to further stimulate lending in Kuwait and facilitate the operations of investment companies?

I am sure the investment companies have been hit more severely than banks or other types of firms because of the stock market being in a depression.  The financial stability law was good when it was presented and I think now the government has to open up some of their projects.  The five year plan will be helpful in this is the government can accelerate the mega projects because the economy will benefit.  

Do you see securing of long term financing as a major challenge yourself?

We deal with some of the investment companies and we like to reschedule their debt over a period of time.  Their side has experienced somewhat of a slowdown and there should be more transparency.  Banks are able to help investment companies reschedule their debt until a time comes when the market is experience greater recovery and they can properly settle their debt.

Your Chairman said despite the negative effects of the global financial crisis on Kuwait and the GCC markets and the economic recession affecting the banking sector worldwide Ahli Bank managed to perform admirably while reporting a net profit of KD 39 million and taking provisions of KD 38 million including precautionary provisions.  How do you assess Ahli Bank’s strategy?

After a change of management in 2002 a new, experienced team went through several situations of crisis and this background helped us navigate through the most recent crisis.  Our risk management team is also excellent and this has provided the support we needed to help us be in the position that we are now compared to other banks.

How would define your strategy over the new four years?

Ahli Bank’s major profits come from the corporate side and we are going to continue financing large companies with the government project.  We also want to focus on the oil, health, contracting, and communication sectors.  We are expanding the net worth of our branches and we plan to open four new branches in 2010 in addition to the 25 that already have (including branches in Dubai and Abu Dhabi).  We also will focus on other GCC countries that we feel have good potential for growth where Kuwaiti companies have activity.  

How do you envision your regional expansion?

We will continue to expand in retail and corporate in Kuwait and we will do the same in other GCC countries.  

What is your point of differentiation compared to other companies?

Ahli Bank’s investors and customers enjoy great management and this helps us improve the services we are able to provide them.  This will help our expansion efforts.

What is your brand strategy for the GCC?

The strategy of Ahli Bank for expanding in the GCC depends on the Kuwaiti market.  In the next three years we plan to be among the top three banks in Kuwait overall.  We do not plan to get involved with Islamic banking at this time and we plan to remain a conventional bank.

The ratio of non-performing loans to total loans in Kuwait has doubled since the crisis began.  Do you see this has a major problem for you?

No I don’t think so.  There are a lot of assets for the future just in case.  Our finances have been approved by the Central Bank of Kuwait and we didn’t have any problem distributing profit or announcing the 39 million KD net profit.

What is your biggest challenge?

I think our biggest challenge is to expand and grab a lot of business from other banks.  With the government expansion and mega projects expected in 2010-2012 we hope to capture a large stake in these projects because they will be the future drivers of growth.

Is there any specific message you have future customers/shareholders?

Kuwait should be an “open skies” investment market to the world.  The government should ease regulations and taxation to bring investors to Kuwait and this has started to take effect so hopefully this will accelerate the process in attracting investors.  We have had international investors since the 1960s and this history should show that people should be confident investing and expanding in Kuwait.  

What is your final message about Kuwait?

Hopefully with the easing of government regulations Kuwait will become more stable for international investors.  We have many strong institutions and a stable political field that should make people comfortable in entering and investing in Kuwait.