Simon Hughes of International Banker interviews Mr. Chaouki Daher, General Manager, Head of Private Banking at International Bank of Qatar (ibq) on being at the forefront of private banking in Qatar and ibq’s future strategy.
Today International Banker is joined by Mr. Chaouki Daher, general manager, head of private banking at International Bank of Qatar, to discuss being at the forefront of private banking in Qatar and ibq’s future strategy. Very good to have you with us.
Within the private-banking division, how significant a role does the wealth-management component play?
Wealth management is one of the strategically important components of the private bank in ibq. To us, or to me, wealth management is the science of enhancing an individual’s financial standing. And for you to be able to do that, you have to know this customer and this client. So at ibq, we pride ourselves, and we always say that ibq is not about account numbers. We don’t treat our customers as account numbers. We treat them as a personal relationship. And wealth management is basically what allows you to do that, what allows you to get one-on-one with this client. And then strengthen that customer service that you want to promote, the best customer service. So it all boils down basically to knowing the customer and the client. And I think wealth management is one of if not the most customer-centric divisions of any bank. And this is also true for ibq.
Thinking about what you’ve just said, what are some of the main underlying reasons for ibq being a consistent private-banking leader in Qatar?
We are a 60-year-old bank. And I always like to remind people about that. So this is by itself an advantage for us. So over those 60 years, we were able to build very strong relationships with the important families, or as we like to say, the key families in the state of Qatar. How people look at us … I’ll give you an example. In the UK, you have Coutts, and they are always associated with the royal family. And it’s kind of the same for ibq in Qatar, that they do associate us with the key merchants and the key families in the state of Qatar. We make friends with our customers. And this is what I call at the moment of truth is when you reach a point where you are friends with your customers; they come see you all the time, you go visit them, and then you strengthen this trust between you and them. We see them at the office all the time. On many occasions, we see sometimes—because we deal with three generations here, because we are a 60-year-old bank—you see the father and the son meeting by chance in the lobby of the private bank. So this is something unique, and you don’t usually see it in other banks. So it’s three to four generations of clients that we have built and dealt with over the years. And this was what made us, if you like, the private bank of Qatar.
Now, in terms of strategy and product offerings, is there any significant difference in the way you approach, say, high-net-worth clients with ultra-high-net-worth clients? How does that work?
To us, each client is different. And this is true in every bank. The most important thing is our relationship manager. And the bank, they give the same service, the same level of service, to all their clients in the same way. Whether they are ultra-high-net-worth or high-net-worth. Despite their portfolio size with ibq. Because our mission as private bankers, wealth managers and relationship managers is to know these customers. To know them well. So whether he’s ultra-high-net-worth or high-net-worth, it doesn’t change. We still need to know them well. We need to know their goals. We need to understand them. It’s the more you know them, the more you know their aspirations. The more you know their goals, the better you can serve them. And this is our job, basically. Whether they’re high-net-worth or ultra-high-net-worth.
Thinking about that trust and the importance of relationship, you’ve been at the bank now for about 20 years. I think you joined in 1998 when it was ANZ Grindlays Bank. How has having had such a long legacy with the bank helped you in heading up the private-banking division?
It’s 20 excellent years to me. And this has given me the opportunity to build actually what I have built today. It’s hand-pick those wealth managers, my colleagues, who became eventually friends. So I was able to build a strong relationship with this team because I hand-picked them with different experiences, different expertise. I have wealth managers, I have private bankers that have the wealth-management expertise, the market knowledge. I have some wealth managers who know the culture well, and they know everybody in the country to help us basically to get through the doors to those big families that we want to get through to. Because we are 60 years old, we were able to retain good relationship managers, good wealth managers. The average years that our RMs have been with us, it’s from 15 to 40 years. Five of our relationship managers in the private bank have been with us for over 20 years. So this immediately would put us at an advantage over the competition and over other banks, other private banks, because we know our customers so well. We know the market so well. And this is true for me. The 20 years of experience that I was able to get in Qatar. Despite the fact that it’s a small country. But it’s a strong and very wealthy country. And this has helped me build a great team and eventually build a great private bank.
So, team is really important. What do you consider to be the other important factors in building successful long-term client relationships?
I think to me it’s all about trust and about integrity and transparency. When you have those, then you’re going to gain the trust of your customer. And at the end of the day, this is what they want from you. I always like to say this example. When you go to the same barber most of your life, right, you don’t change your barber. You trust that he knows exactly what he is doing. Even though that example might sound a bit odd, but it’s very true. You go to the same barber, to the same hairdresser. And then you trust them, even sometimes with a knife, you know, very close to your neck. So I tell my team, we want our customers to trust us like this. Because when you gain the trust, you gain the customer. He’s going to always come to you. He’s going to always look for you when it comes to his goals, his plans, his aspirations. His wealth planning, transfer of wealth, so he’s going to come to you. So this is why I think it’s very important.
Let’s turn that on its head a little, though. How much focus do you now place on new client acquisition vis-à-vis improving the service to your existing client base?
That’s a good question. I think they work together. They’re hand-in-hand. And I’ll tell you, I’ll explain to you how—when your client is satisfied, and he’s happy, and you are giving him the best service. And basically he’s satisfied with the level of professionalism that you are giving to him, eventually he’s going to introduce you. So while you work hard on cultivating the existing relationships and then taking care of your existing clients, eventually those clients, and this happens every day, they’re going to tell their friends, they’re going to tell their cousins and their brothers and sisters about you. And the best introduction in our business comes from a client, from a satisfied client.
So friends and family making those introductions is where the new business part often arrives.
Exactly. So you are actually, by cultivating your client base and just coming up with the best solutions for them and taking care of them, is at the same time helping you in acquiring new clients. Because they’re going to introduce you to their family and friends.
Now, you’ve got a great team in place, obviously. You’ve got a legacy of 20 years yourself in the bank. How do you describe your own leadership style? And are there any specific methods that you use to get the best out of your employees?
I’m not a good talker about myself, but it’s the same way we do business in ibq. I deal with my staff in the private bank so it’s all about relationship. I told you before when we started that we always say that our customers are not account numbers. They’re personal relationships. So relationship is a very strong message that we like to convey in ibq. And I do the same with my staff. So over the years, you strengthen that relationship between new and …. you share knowledge, you guide them day after day. Once you have that trust between you and your team, then you leave them. They become on their own. And I always like to tell them, “Consider yourself a shareholder in this bank; consider that this is actually your own ‘part something’ in this bank. And what would you do if that was the case? So once it’s yours, I’m sure you will work with passion.” There are two ways, I think. It could either be respect or fear. It’s the same, you get the same results from it. But I think, with me and my team, I think it’s about respect.
Now, thinking about the kind of challenges in the region, the geopolitical challenges, there are huge changes taking place, a lot of it unforeseen in the future. How do you expect banking in Qatar to change over the next few years?
2017 was a tough year. As you know, our neighboring countries have put a blockade on us. But with the measures that our government put in place, and the Qatar Central Bank, actually helped us in achieving good results. And if you look at our results, 2017’s were better than 2016’s by double digits. And this is proof that actually—yes, there are challenges; yes, there are a lot of issues. But not just our bank, actually most banks in Qatar and most businesses, have achieved better results than the year before. This is going to continue, I think. We have a strong business model. We have a great franchise. And we will keep on growing this business and delivering good results.
Now, as you’ve just alluded to, the bank’s business strategy is very much focused on the Qatari market. Do you have any plans to expand your geographical footprint?
I always say, I like to be where I understand the market, where it’s what I know best. And we know Qatar best. Our 60 years of history have made us strong in this market, and we’re going to capitalize on that and keep on delivering good results. So, to answer your question: no, we’re not looking outside Qatar now. No, it’s going to be Qatar, Qatar, Qatar for us.
Now, ibq’s customer service seems to stand apart from banking competition in Qatar, especially with regards to private banking. Do you see the method of customer service changing? I’m thinking particularly of the kind of advances in technology that are impacting on so many areas of financial services.
Technologies for sure have turned the way banks do their business upside down. And this is changing on a daily basis. Just on the way here, I received an email about a wealth-management telephone app. It’s like an application. So this is happening daily. Especially technology. And it did change how we do business. We pay a lot of attention to it, and we try to be ahead of it sometimes. And always look for what new technologies are out there to help our business model. But what I don’t think will change is the human factor in our business and wealth management. In our business, to be able to succeed and let your customer or your client achieve his goals and aspirations, you have to know them. So basically you have to listen to them also. So you have to ask the right questions, and you have to listen carefully and then … what I like to call here is the art of listening. So, if you listen well, and you ask the right questions then you will get to know them better. So, it’s all about knowing these customers. And I just don’t see how this is going to be affected by technology. To a certain extent, maybe. But I just don’t see a high-net-worth customer or an ultra-high-net-worth customer talking to a computer, and the computer is asking him about his family and his kids and his business and his aspirations. And what are his plans going to be in the future. I might be wrong, but I don’t know. We’ll see.
So the transactional side might actually be taken care of by future technology, but the relationship side exists between the people.
Absolutely. Especially in wealth management. I’ll tell you, in retail maybe you wouldn’t need to go to a bank in the future. Right. If you only need a checkbook and an ATM. And actually, we don’t now. I don’t even remember the last time I went to a bank for my personal account. I go every day to my bank, but for my personal? That’s because I do it all online. But the business I’m talking about is wealth management. OK. Private banking, wealth management. This is a customer-centric business 100 percent.
Now, you mentioned results earlier. ibq managed to record impressive earnings in 2017. 11 percent growth in net profit, 13 percent boost in total operating income. What specific factors do you attribute that success to?
I mentioned before that despite what happened during 2017 and the blockade by our neighboring countries, we were still able to deliver great results. So it’s the franchise that we have, the sustainability of our business. So our business keeps growing despite all of the challenges that are around us. And as I mentioned before, the measures that our government and Qatar Central Bank did had helped us and other banks to achieve good results. And this is going to be the same, I think, in 2018. Because we are already at the end of the first quarter, and we are ahead of last year. So the business is sustainable and is growing.
And in terms of ibq’s product offerings, are you satisfied with the overall level of diversification that you’ve managed to attain? And are there any new products in the offing which will help increase that diversification?
To us, to me personally in terms of diversification, I’m satisfied with what we have today on our platform in terms of product diversification as classes. But this is an ongoing exercise that we do. So we always want to look for more solutions, better solutions. It’s ongoing, as I said. You don’t stop ever and be fully satisfied with what you have in terms of product diversification. What we noticed recently is that there is interest from the women’s segment. High-net-worth, ultra-high-net-worth women who are interested in the business and wealth management. Last year, for example, I brought an investment professional, who is a real-estate investment professional, from London, and we held in Doha about 10, 15 customers and prospects; we held like a literacy-training session for them, and it was a success. And basically it was to introduce them to investing in the real-estate market outside of Qatar. And this … for the past five years, if you go, and maybe 10 years ago, if you go and ask a Qatari investor, “Why don’t we put some money in for you?” Not all of them, but most of them. “Put some money in for you, and not hide it in the stock market or in the American stock market.” They would laugh at you, because their returns on their investments in Qatar, whether in real estate or in the stock market, was just unparalleled. You couldn’t get these returns somewhere else. Where today, this has changed. So we are, of course, trying to capitalize on that. In ibq Private Bank, we have partnerships with financial institutions offshore: London and Paris, in Switzerland, in Geneva, Zurich. It’s where we offer the international exposure to our customers. Whether they want to open an offshore account or to invest outside or to buy a property outside. This is also something that recently has been drawing a lot of interest.
Now, I noticed during our conversation, the focus on people, whether they are customers or they’re your wealth managers. How satisfied are you with the standards of internal employee-training programs in order to get the best out of your people?
We have an excellent retention program, and it’s all about people. It’s the people that make the difference. It’s the people that make the business successful. And it’s true, it’s a true story for ibq. We invest in our people. We give them opportunities. To us, they are the most important component of the bank. And if you look at the history of our bank, and if you look at our staff today, you would notice that 25 percent of our staff has been with us for twenty to forty years. And as I mentioned before, five private bankers out of 16 have been with us for over 20 years. So this is a proof that actually we do have a good program for retaining our employees and especially our private bankers.
It’s been a pleasure finding out more about ibq. Thank you for your time.
Thank you so much. Thank you.