Jordan Kuwait Bank

Interview with Haethum Buttikhi, Assistant GM for retail and private banking of Jordan Kuwait Bank

The Ministry of Finance would like to adopt new methodologies to prepare the budget and cut spending. How confident are you that these initiatives will help the economy and the financial sector in particular ? 

The financial crisis has taught us the importance of tightening budgets and trying to cut down on expenditures. The government is no different from anyone else. The private sector also has to cooperate with the public sector to decrease expenditure and be more proactive when it comes to private-public partnerships. Jordan is a rather poor country when it comes to natural resources but very rich in human resources, culture, and historical sites, providing a unique experience to guests. It is also an important place for different religious tourists. In these challenging times, Jordan managed very well to weather the storm, and came out much better than a lot of other countries. We just have to be hand in hand with the public sector, the government.

What are some of the strengths and weaknesses of the banking sector in Jordan ?

The banking sector in Jordan is very strong and successful. This is very evident in the fact that it has been targeted by international giants like Citi Bank and HSBC, as well as regionally large players like Audi, and the National Bank of Abu Dhabi. The sector is mature, well-established and well-regulated. It also has the manpower to work in the institutions. There are roughly 15,000 bankers in Jordan and the vast majority are Jordanian staff. During the crisis, not a single bank had any losses. The banks came out very well capitalized, with healthy non-performing loans, and provisions were of excellent standards and above the requirements of Basal II and the regulator. Our Central Bank has also helped the banking sector to weather the storm and protected them from exposure that could have really affected them negatively. There are very few weaknesses in the sector, but one of the areas of growing concern is that Jordan might be over banked. Competition is increasing between the banks. This ends up being better for the consumer who gets better customer service, but for the shareholders of the banks it is seen as a sort of threat because the pie will end up being more divided up. However, I really do not see any major weakness in the competency of bankers in the sector, or the technical abilities that exist.

No one posted a loss but your profit was down 8.5%. How would this affect your future strategy ?

These difficult times have taught everyone a lesson, be it not over-leveraging certain sectors, or being a bit more conservative in certain areas. The actual decrease in growth is normal in such conditions ; it doesn’t mean there is anything to worry about. There has been a confidence blow to the whole financial sector. I believe that today we are a stronger bank because of the lessons we have learned, and we believe there is light at the end of the tunnel and things will improve.

How are you dealing with the competition here ? What are your future market-share targets ?

We pride ourselves on the fact that bigger isn’t necessarily better. We like to believe that small is beautiful. We are in the service sector, so the importance of being seen as the best bank in service is our aspiration. Our turnaround time for our customers has to be the fastest ; client satisfaction and experience from their bankers has to be top. We have been recognized by a number of institutions here in Jordan as the best bank in Jordan as well as being the best internet bank. We are recognizing the importance of excelling technically. Today, to move forward, you have to recognize the importance of net and mobile banking, and SMS banking, and we believe we are excelling in these areas.

How are you going to address the problem of the Amman Stock Market ?

50% of the ownership of the equity market in Jordan is for non-Jordanians. We are very confident that our shareholders have strategic importance. We are an institution that does not manage stock, we manage the company and expectations of the shareholder, and maximize profitability for them.  Our stock has come down like all the other stocks on the market but we believe that when confidence is brought back to the market it will return like most of the successful and well-managed institutions.

What are the tangible benefits from your union with Burgan Group and KIPCO ?

The Jordan Kuwait Bank has been around since 1976, and since then there has been this connection between Jordan and Kuwait. We believe that the ownership of Burgan gives our customers a lot of confidence knowing that such a solid institution backs this bank. So far the economic condition in Jordan has been doing very well for Jordan Kuwait Bank, and we have been servicing our clients in Jordan, and some small cross-border transactions. Having the Group with us gives us a lot of weight and the economies of scale to tackle certain issues like providing syndicated loans or investing technically.

Is international expansion something you are interested in, or does being a part of the Group hinder you ?

Because the Group is  present in nine countries today, international expansion on the financial institution level is considered on a Group level and not a bank by bank instance. However, Jordan Kuwait has an offshore presence in Cyprus. We are looking to grow and expand in Palestine. Right now we only have two branches in the West Bank, but we believe there are opportunities and we will expand.

Are most of your clients international ?

There are quite a lot of Jordanians living outside the country. A lot of our clients work and live in the Gulf. We’ve invested heavily in IT infrastructure and a net platform to facilitate operations for these clients outside of Jordan, to access their accounts and perform transactions. It is important to address that area of business and that sector of society because it’s a large sector.

What is your vision for the bank ? Where would you like to see it in five years ?

KIPCO has a lot of aspirations in the financial sector. I think that with those aspirations and our own  aspiration to maintain a strong footing within the banking sector in Jordan, I believe we will contend in all means to be one of the largest banks in Jordan, and at the same time be positive and well-performing, with the best profitability for our shareholders. It is important to maintain an excellent presence in customer service and satisfaction, and maintain a strong relationship between the institution and the employees who work for it. The staff of the bank is very competent and have excelled within this financial market, and because of the competition we need to maintain this strong feeling of loyalty to the company.

Do you see the first six months of 2010 being better than 2009 in terms of performance ?

2010 shows definite improvements in performance. At the same time, one needs to know that there has been initial cutting down in certain areas of costs, but things are positive and better off.