By Jamal Hijres, CEO, Capinnova Investment Bank

Published in Gulf Business Magazine

We just celebrated our third year this January, so we are a relatively new bank within the industry and I am delighted to say that within this short span Capinnova has created a mark for itself in the industry. Capinnova aims to provide our valuable clients in the GCC and the MENA region with good investment products and services aimed at building and sustaining shareholder value. As you know, Capinnova is owned by BBK, which is one of the biggest commercial banks in Bahrain.  We run the day to day business on the basis of corporate institutional culture rather than different preferences and directions of individual shareholders.

It is definitely better than 2008 and 2009 and I can see that the industry is growing.  Yes the growth has been gradual but there is definitely a growth pattern that we have observed within the sector.  Banking and finance sector is definitely the heart and soul of any economy. Bahrain definitely remains a sought after platform for foreign investors on account of its established regulatory practices, transparency and adherence to international standards. There are several opportunities to be tapped in the finance sector. 

Capinnova is a Shari’a compliant investment bank licensed by the Central Bank of Bahrain and is wholly owned by BBK. The bank is well capitalized with an authorized capital of US$500 million and a paid-up capital of US$ 151.5 million. Capinnova’s gross revenue for 2010-2011 increased to US$ 9.2 million as compared to US$ 6.9 million for the same period of last year, which represents a growth of 32 percent - which is a positive sign for us. The other point that I would like to highlight is that, Capinnova’s Liquidity Ratio (LR) stands at 37 percent and we are proud of this remarkable achievement. 

 

Furthermore, as per the CBB prudential requirements, banks are required to shore up their capital adequacy ratios and maintain equity capital at 12 per cent of risk-weighted assets. However, our Capital Adequacy Ratio (CAR) stands at 86.2 percent and this would help the bank in maintaining high growth rate in the following years. We are committed to achieve better results to satisfy our investors and shareholders by following our structured investment methodology which was designed based on the rapidly evolving market conditions. 

On a macro level, any economy will have challenges and no economy is perfect.  Therefore it is better that we don’t delve in the past and promote brand ‘Bahrain’ at a global level and continue the reforms within the country at a rapid pace. 

We entered the healthcare sector by partnering with the current shareholders of Saudi MAIS Co. for Medical Products (SMMP), Arab Supply and Trading Company (ASTRA) and Demas Company for Trading and Contracting (Demas), through the acquisition of an influential minority stake of             US$22 million equity interest in the company. We will continue to explore several other vertical industries that we believe has the potential to grow further in the near future.  

Private equity is still in the embryonic stages in the Middle East and North Africa region. Therefore there is a tremendous untapped potential with regard to the private equity industry. This year we plan to go further in this line of business and explore the markets by forming club deals with other financial institutions.

As per the MENA Private Equity Association report, towards the end of 2010, the private equity industry in the MENA region started to show signs of recovery from a suppressed activity due to the global financial crisis. Funds raised in 2010 increased to $1.4 billion from $1.1 billion in 2009 and the value of funds announced during that period reached to approximately $4 billion. Venture capital industry on the other hand also had a significant growth in 2010 as five venture capital funds successfully raised $430 million. So gives us the confidence to focus on private equity business in addition to other business sectors. 

 

First and foremost, the leader should have a clear vision. A leader must have a clear idea about where his or her organization is going beyond this month’s results or this year’s budget. Where is it going in the long term? That should be the key question. Even tactical leaders must be clear about this and need to refer frequently to the vision, mission and values of the organization in their communications with others.

The other most important aspect is communication. In the context of leadership, communication refers to both interpersonal communications between the leader and team members and the overall flow of needed information throughout the organization. This gives clarity to the whole approach.

Working together as a coherent team to achieve the best out of our human capital is the key word for success and differentiation in today’s highly turbulent banking environment

Personally I feel that the hardest part is the paucity of time, I sometimes wish the day could be longer than 24 hours. The journey is long and there are several objectives to be achieved to reach the final vision.  However, we have a good team and they play their roles well and ensure that we are always on track.  So when you have a great team I can safely say that we are cruising along well and moving closer to our destination. 

The most important thing that I have learnt is the importance of being a highly objective and oriented person, capitalizing on the wealth of knowledge and expertise that one embedded in the human capital.  Everything else is secondary.  If you respect a fellow human being, he will shower the same respect back to you. This builds in the integrity and commitment factor in an organization.  Large and successful organizations are not successful without anything else but the team of people that they have.  They are the ones who make an organization look good.  There is only one way to reach that stage – by respecting and nurturing the human wealth in your organization.  Respect creates loyalty, and loyalty in turn secures unlimited amount of commitment and motivation.