FIRM BASE

Kuwait 2016 | FINANCE | INTERVIEW

TBY talks to Eduardo Eguren, CEO of Burgan Bank, on recent performance, facilitating international banking, and implementing Basel III regulations.

Eduardo Eguren
BIOGRAPHY
Eduardo Eguren was appointed as Burgan Bank’s Chief Executive Officer in September 2010, bringing with him over 25 years of experience in corporate, retail, and commercial banking globally. Prior to joining the bank, he was CEO of Global Commercial Banking operations of Barclays Plc, in London. From 1984 to 2007 he held senior management positions at Citigroup/Citibank/Citi, including CFO and Chief Operating Officer, covering businesses including corporate and retail banking, asset management, and insurance and pension funds in Latin America, Europe, Asia, North America, and Africa.

How would you assess the performance of Burgan Bank over 2014 and into 2015?

The performance of the bank has been consistently solid, like most other banks in Kuwait; however, our model is different as we are the most international Kuwaiti bank. Firstly, we have the largest relative international presence compared to others, because in terms of our expansion strategy we decided to diversify out of Kuwait into faster growth markets. At the same time, diversification has to do with risk management. The more diversified you are, your ability to endure and keep growing becomes more solid. Secondly, we have a focus on quality earnings. We are not an organization that is based on one-off large gains or deals. Thirdly, we are truly customer-centric.

How would you describe the health of Kuwait's banking sector?

The health of the market, like many other conditions, has several variables. If you think in terms of solvency and the strength of the system, the Kuwaiti banking system is one of the strongest in the world, by the players that are here as well as by the support given by a strong government. This is also backed up by the fact that the Central Bank, by law, backs 100% of the deposits, irrespective of the amounts. We could benefit from evolution because the market relies on the strength of the government, which could still bail everyone out in extreme conditions. We do not run the bank like this, but strive to be innovative and support our customers in Kuwait and abroad.

What are you doing to facilitate international banking in Kuwait?

In reality, being customer-centric means that we are building around the success of our customers. We are helping customers do things outside of their environments, as well as serving customers in other jurisdictions. In order to help Kuwait to grow—and this is a country that has unbelievable possibilities due to some competitive advantages—someone has to occupy the space of being the conduit of helping our customers here to be successful elsewhere in the world. We are not the only ones, but right now we have the largest footprint out of Kuwait. We have a competitive edge to build on, and our code of behavior is also solid.

What growth opportunities are you looking into outside of Kuwait?

There are three markets in the region that are interesting to us as we have publically announced, and we will eventually go there, one way or another, with the right set up. One is Egypt, there is also Saudi Arabia and the UAE. I look at the Emirates with enormous respect. It has been successful and has done a number of things very well. Our customers are interested in doing business there, and we are helping them do that. We have recently obtained some licenses to operate in the DIFC. I do not believe we will enter the retail banking sphere in UAE, because it is an over-banked environment; however, you cannot be successful in this part of the world if you don't have a successful operation there. Also, our customers give indicators of what they want. We don't always need to have a physical presence to be operational, but if we have a presence in more than 15 other countries, that gives us a platform.

What are your expectations for Burgan Bank in 2016?

The penetration of Basel III has significantly affected the banking system around the world, particularly in Kuwait, which has been conservative. It has implications in terms of returns, for example, that have to be considered. Basel III was implemented in 2014, and we had to adjust our capital structure to comply with the new requirements. We did so by issuing some of the first instruments in Kuwait and the region. It is now about continuing the buildup that we have, as our core strategy and consolidating the recent acquisitions we have done. We have several projects in the pipeline, and we have to manage our risk profile carefully. We are profitable because we know how to operate in this environment. We have to preserve our ability to adjust and evolve. That is absolutely critical. In the end, we cannot be successful in environments like this if we are only doing well during expansionary cycles. Our model is agile and resilient.