Home Banking Interview with Dr. Khalid Abdulla, General Manager of Eskan Bank, Bahrain

Interview with Dr. Khalid Abdulla, General Manager of Eskan Bank, Bahrain

by internationalbanker

Simon Hughes interviews Dr. Khalid Abdulla, General Manager of Eskan Bank on the future of the organisation and the housing market in Bahrain.


Many congratulations to Eskan Bank and, of course, yourself for the award for Best Innovation in Retail Banking, Bahrain. Congratulations.

Thank you very much.


We are very excited and proud to get this award. It signifies the hard work and the perseverance of all the employees of Eskan Bank. And it also signifies the backing we are getting from our board and our chairman particularly, the minister of housing. At the same time it acts as an impetus to do even more. And hopefully we’ll be here next year. We shall be back.

Very well.

Thank you.

Thank you.


Well, very good to meet you, and I’m really looking forward to having this conversation with you. Let’s start with a fairly simple question. What makes Eskan Bank so unique?

Eskan Bank means, eskan means housing, so basically we are the housing bank in Bahrain. And it’s unique in terms of being owned fully by the government, and our preoccupation is to get as much people into decent housing as possible. And we do that through our mortgage-financing programs but also from our development program. We own a fully owned subsidiary, which is Eskan Properties, which is our development arm. And the unique thing about it is following the government strategy and mandate whereby we are to act more as a catalyst for private-sector participation in providing housing and housing programs and financing for the population. So what’s unique is that the more our market share reduces, the more we have accomplished our mission. To the extent that the day when there is no need for us, it means that we have reached our ultimate goal in setting programs that would encourage the private sector. Actually we are competing with ourselves toward enhancing the role of other banks and financing. And there are many initiatives that we have taken that would enhance the contribution of private banks or developers in tackling the housing issue in Bahrain.

Now that’s a very specific agreement, but within that agreement how would you describe your leadership style?

I’m kind of a person who first leads by example and leads from the frontline rather than the ivory tower, issuing orders. I lead by example in terms of what is expected of the management. And one of the problems that I oversaw lately was a transformational program, because I think we have a lot of management, but what we are looking for really is more leadership. I would describe my mission as a leader as to facilitate and empower all employees to fulfill their full potential, to realize their full potential. And I think if we are successful in doing that than the organization would be closer to realising its full potential. To do that you have to start with a greater trust in your team, which I have. Also employees have a voice. We don’t have a single issue that cannot be discussed, everything is furnished on the table clearly and openly. So I do believe in participatory discussion and decision making. The benefit of which would be relived most effectively when we come to the execution, because everybody feels that it’s his decision and he would assume the right kind of ownership for it. And it has proven to be successful.

Now you’ve described the bank’s operation in terms of being quite specialist operating in the property area. What do you see as the kind of trends developing in Bahrain over the next three years or so in the property market?

I think like everywhere else, we’ve seen a lot of developments targeting the well off, the seaside, seafront, beachfront development for speculative purposes. Unlike everywhere else, we had our share of having a lot of fingers burnt because of that. So today people are going back to the fundamentals. I think where there is a strong demand, and I think this is the main driver for all the development activities. And in Bahrain we’ve been successful in positioning social housing as being attractive and appealing through a lot of government programs that subsidizes and that makes ones become effective demand so to speak of the housing units. Through our various programs, we started to see a lot of developers and banks actually take part in problems that are to promote housing issues. And we started to see that trend whereby the real estate development of developers had social housing and affordable housing very much in demand. So we are seeing a lot of developments now that are earmarked and targeting social-housing beneficiaries or who’d qualify for that or for affordable housing. Of course, there is a very solid demand that would support that market, and I would think that most of previously supplied units, I would think that the private sector would be the one that would be delivering most of these units. And behind also I think that there would be some real estate development to cater for shopping and entertainment, which are areas still I think the market has not fulfilled the huge demand yet. So there is room for sizeable development.

So collaboration and innovation in terms of products and services are very important to you. But what role do you think your education and background in industry played in developing that approach to banking services?

I studied economic development for my master here in East Anglia, and I did my PhD also in economics. So when I approached private sector, I approached it with huge interest in promoting the welfare of people. So most of my engagements were focused on value-creation activities. I avoided the financial acrobatic mores, so to speak, whereby people landed flat on their faces and focused on activities that yielded real value and contributed toward the welfare of people. I was working in the private sector previously so again we had to also be concerned about profit, satisfying the shareholders. But I didn’t see that there is a conflict between sitting and trying to create true economic values and at the same time making good money out of it. And moving to Eskan Bank, I think that came very, fitted very well with the mission of the bank, which is a social mission. Whereby our preoccupation is to promote the socio-economic welfare of the population planted in Bahrain.

And if we kind of pull back a little from that very unique operation in Bahrain, how do the wider global economic impacts affect you and the bank’s business?

Actually being a government-owned bank, we get affected tremendously by what happens to the government living. And the sharp drops in oil prices definitely have affected the ability of the government to see it through its development program, particularly the infrastructure and housing issues, which are extremely important. But I think it worked. We turned a challenge into an opportunity, whereby we initiated the programs that basically tried to tap the private-sector resources toward social housing. Landlord, entire programs, whereby the landlords bring in their plots, and we at the bank we allot them for social housing and affordable housing. It’s proving to be very popular with land owners, the huge land owners in Bahrain, and they are queuing, actually, to forge such a partnership. At the same time, given how important is housing to people in Bahrain, and with the government being very adamant that it wants to satisfy such demand and feels the responsibility for that, so we are now pooling, starting— we are in the early stages of PPP program, private-public partnership; whereby we had a couple of private-public partnerships within the country, but now we’re trying to tap the international market whereby we’re trying to mobilize international funding for social housing. Eskan Bank was mandated by the cabinet to be the lead arranger whereby we do the financial structuring of such a deal. We did sound the market, and we found a hugely positive response, so we hope before the end of this year to conclude one and, if we are a little bit lucky, maybe two deals whereby we are getting partnership with international investor funds to do affordable social housing in Bahrain.

And I get the sense that the bank is moving from a quite tightly focused and regulated world into one where there are more opportunities. Is this part of kind of deepening your presence in Bahrain as a bank, do you think?

I think, yeah, what you referred to is very true. I think the government has realized over the last couple of years the potential of Eskan Bank as a flexible financial arm to the government that can speak the same language with other financial institutions and bankers and also demonstrating the capability to structure fully and develop programs whereby it would act as a catalyst for the private sector involvement in the social and affordable housing. So, yes, we will be seeing, and actually we are working now, toward reviewing our article association whereby we become a little bit more mature in terms of reducing our dependence on the government for funding and whereby we will be interacting with the financial capital market, investing the strength of our balance sheet.

We touched on your kind of leadership style, and we’ve heard a little about your background. What, though, do you think is your, or the achievement you’re proudest of since you joined the bank?

Our chit chat today, I think, signifies one of the important achievements. And I don’t mean by that the award itself as much as what the award signifies in terms of turning the bank, the culture to become more entrepreneurial and innovative and seeing the very happy crowd in the bank in the form of its employees and even the customers doing exciting things, enhancing our contribution toward the welfare of the people of Bahrain.

And looking forward say five years, what do you hope personally and for the bank that you will have achieved?

I think we have a way to go to develop programs whereby the private sector would bear most of that responsibility with the government and the bank facilitating through their various incentives a scheme. Along five years I think if we see our plan and vision bloom, we might be able to assume that all of our development bank, which would define us in a wider spectrum, love and justice kind of bank, because I think there is room for us to play a role in promoting manufacturing development, industrial, for the welfare of the people in Bahrain. And I hope that will be something that we will achieve.

And something we always touch on in these conversations is kind of the use of technological innovation. What’s your top priority in terms of developing technology within the bank?

As we speak, we are reviewing the core banking system toward a more agile. I would like to see technology as empowering, empowering people – our customers, and employees obviously. On the developmental front, actually we have just concluded one of the developments where people moved in and they are very happy and we are kind of benchmarking for that standard of social and affordable housing developments in Bahrain. And our mission is to, for our balloon, is to incorporate as much as green and sustainable energies. We on a pilot, small project whereby we have 18 villas, we introduced solar panels for the first time in Bahrain; Eskan Bank was the first to do that. And we’re hoping to incorporate more and more technologies, especially that would be cost-saving technologies in terms of a new building material, new technologies that would involve foss fabrication. Of course, without compromising that standard, that safety and security of inhabitants. And, yeah, I would say green technologies, we would like to play a role in. Again, benchmarking for green developments in Bahrain.

Now, bizarrely, in many ways the whole focus of the bank is about kind of social welfare. Yet you do have some CSR initiatives as well. And what are you actively involved in at present in terms of CSR projects?

I think one of the most exciting things for me, and it is flying tremendously, is that the preoccupation of the bank itself is CSR. We are not like, how do I put it without mentioning any names, an international conglomerate who’s ruining the environment and then coming with a CSR propaganda , I would say. Just to others part of the guilt feeling. Our involvement entirely is within CSR, socially responsible. And there is nothing more CSR than trying to accommodate for the needy families, their accommodation. But in addition to that, of course, we’ve got a lot of examples. For example, we have sponsored an award with an engineering college in the University of Bahrain, which is Eskan Bank’s award for creative, innovative engineering. And we are using this as a platform whereby we try to educate and create awareness for various important issues, and we found that it’s best to articulate with the young engineers, toward their graduation, and they will be spreading so to speak. So in the first year, we looked at social economic sustainability of housing development, whereby we are interested in creating positively energized communities that create jobs and promote, have a positive vibe and interaction between the residents rather than just cubicle, pigeon hole. That can be a source of frustration and promote crime. So that was our first. And now we’re moving forward with this program. And, of course, the employees of the bank are very active in fundraising for various good causes of tackling various needy groups. It is part of our DNA actually as a corporate.

I think the most interesting thing about the bank in many ways is that your final measure of success is when you don’t need to do it anymore.

Yeah. I think, while a lot of, and this is part of our uniqueness, while a lot of banks are always having strategies to grow, and become bigger and bigger. I think the criteria of our mission, of how successful we are, is how much less needed we are. And when we are fully successful, maybe it’s the time that we don’t, there’s no need for us to exist. And because, rather than competing with other banks, we are promoting other banks. This is part of the strategy that’s set for us by the government and our board of directors and our chairman, who‘s the minister of housing and who’s been the real force behind us in terms of opening up the space for us to move and provide the inside backing always.

Very good. This is a fascinating story, and it’s been a great pleasure talking to you.

Thank you very much.

Thank you.

It was my pleasure to be here. Thank you.

Thank you.  


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