A lot of bankers come to visit us for marketing their services and request to give an overview so that they can offer services to us accordingly. Recently, we made our first trip abroad to introduce our bank to other banks. Initially, the description that came out of our mouths was in awkward pauses and stutters but after a few meetings we had refined our pitch. Though not necessarily an elevator pitch but we felt that it described us perfectly as well as gave the person we were meeting a perfect idea of what we are looking for. The bank is still trying to figure out what it wants to be so as time goes by we may refine it further or it may change altogether. Right now, this is the spiel:
We are a new bank and young bank in a market which is already over banked with large and well established banks, We cant compete with those banks in standard products. Our balance sheet size is small so we cant write a cheque of $100 million. We cant even write a cheque of $50 million. On the other side, our cost of fund is high so we can’t grow by offering cheap funding to blue chip corporations. Not to say that we don’t participate in standard thinly priced transactions that are there in the market. We do. But those just help us to break even. Moreover we just turned nominally profitable this year so we really can’t bet the bank on high risk speculative transactions. We need to find a sector or niche which enables us to grow sustainably.
Just to give you an overview, from revenue generation perspective, broadly our bank is divided into 3 departments: Corporate, Retail and Investments.Corporate looks after local corporate plain vanilla financing, retail looks after local retail financing and everything else comes to us: international syndication, international real estate, funds, sukuk, equity, structured finance (local as well as international) etc
Corporate and Retail will grow the bank in line with the economy, but the real differentiation will come from Investment Department. Till last year we mainly participated in syndication and funds but it wasn’t participation for participation’s sake. We cast a wide net to gauge which banks we want to forge a relationship with. This year we have started origination. And we are originating land mark deals relative to our size and age. We will be launching an international syndication for a local corporate shortly. We have been appointed JLMS for a first corporate sukuk coming out of Asian country. Shortly we will be launching a US real estate fund and US Equipment leasing fund to offer to our private banking customers. We are doing a sharia compliant securitization program for one of the largest vehicle financing company in country. You will be reading about all these transactions soon in the press.
Most importantly we have assembled a young energetic team which is not afraid to roll up its sleeves and gets its hands dirty. I have a background in funds, real estate & private equity. Y was part of DCM team in one of the oldest and largest islamic finance institution in the region and lead managed large number of syndication and sukuk transactions. T is a structured finance maestro. T is also the head of department but as I said we are not afraid to roll up the sleeves. Depending on the nature of transaction one of as becomes a champion but all of as work together as a team.
What we are looking for is partnerships. We may participate once or twice but if we see that you treat us as we are just another bank writing a cheque, we may not value that relationship. Our mandate is very wide and we are looking for partners who have skin in the game and co-invest and co-partner with us in transactions.
So this is us.