x Abu Dhabi, UAEFriday 21 July 2017

Confident Shuaa aims to rejoin banking elite

Sheikh Maktoum Hasher Al Maktoum has been chairman of Shuaa Capital for four weeks and has brought in a new CEO. He talks of the challenges ahead.

“Shuaa is in a good position to emerge as a strong force in regional financial services,” says Sheikh Maktoum Hasher Al Maktoum. Antonie Robertson / The National
“Shuaa is in a good position to emerge as a strong force in regional financial services,” says Sheikh Maktoum Hasher Al Maktoum. Antonie Robertson / The National

Sheikh Maktoum Hasher Al Maktoum has been chairman of Shuaa Capital, the region's oldest investment bank, for four months. A couple of weeks ago, he put his stamp on the bank with the appointment of Michael Philipp as chief executive. Mr Philipp is a highly rated banker formerly on the executive board of Credit Suisse and Deutsche Bank.

Shuaa has had a couple of years of reorganisation and retrenchment. The effects of the global financial crisis hit the bank's core businesses hard, as trading activity and initial public offerings dried up in the region. It had a run-in with the financial regulator, and a messy wrangle with the Government over its equity structure.

Now, the bank's corporate structure has been resolved. It has also taken steps to address a legacy portfolio out of kilter with modern market conditions, reduce its cost base and refocus its business. That task has not been eased by the uncertainties caused by the financial fallout from the Arab Spring.

Sheikh Maktoum has something of a reputation as a corporate fixer, having been put into difficult company situations in the past, such as at Al Fajer Group, which he restructured in 2008 and of which he remains chief executive. Other business roles include his chairmanship of Dubai International Holding Company, and being the founding investor in Virgin Megastores in the UAE.

Sheikh Maktoum is determined Shuaa can resume its place among the region's investment banking elite, even if many of the old assumptions about the industry will have to change.

Q: Investment banks around the world are having a tough time. What is wrong with the industry?

A: Some people in investment banking are locked in a pre-2008 mindset, and everybody in the industry is considering what are the best management and corporate structures for the future. In many cases, the old models are not adequate. We have to find a way to attract and incentivise talent that doesn't leave shareholders carrying all the cost and all the risk. Especially in our region, the global banks are pulling out and the local players are facing very difficult times. I believe Shuaa is in a good position to emerge as a strong force in regional financial services. I guess we will know, by the end of 2012, who the survivors are and which structures are best.

Q: Shuaa has announced significant management changes. Can you explain the rationale?

A: When I came in as chairman four months ago, I was pleased by the progress we'd made over the past couple of years. The balance sheet is cleaner, we've got out of many of the assets and sectors that were a drag on Shuaa, and we've cut costs. But now we are ready for the next stage of Shuaa's evolution. We've left the restructuring behind us, now we need to refine our operating model and adapt to the new environment. I thought we needed a different skill set to enhance the progress we'd already made. Michael Philipp is exactly the kind of talented executive we need to take us forward to the next phase. … This is the time for a realistic look at the market for Shuaa. We are looking at ways to become a more client-centric organisation that can serve our existing institutional clients and service family businesses, conglomerates as well as SMEs. We see a major gap in building a truly regional platform that offers asset management, advisory and brokerage services. I'm finalising our plans right now along with Michael Philipp and our senior management team, which will be presented to the board in November.

Q: How do you rate Shuaa's brand in the region, bearing in mind the reorganisation that has taken place over the past couple of years?

A: Shuaa's brand took a hit in the last three years. As a listed company, we did our best to be transparent, and that means disclosing information in good and bad times. It will probably take about 18 months to rebuild a superior brand again. Meanwhile, our clients and shareholders know that we're still the best indigenous investment banking brand in the region. We go back 32 years and have been an integral part of the regional growth story during that period. We were the first promoters of the GCC as a destination of capital over 10 years ago. The GCC region now needs a champion in the financial industry, and Shuaa has the heritage and the ambition to be that champion, on a global stage.