JEDDAH, 22 January 2008 — Mergers and acquisitions are today’s byword if any local entity wants to go global or expand regionally. This was the message given by experts at the second Saudi international banking and investment conference (SIBIC 2008), during the discussion on ‘Saudi banking sector in the progressing world” at the Jeddah Hilton yesterday.
Jeddah Governor Prince Mishaal ibn Majed formally opened the conference on Sunday night.
Describing the conference theme “Globalizing banking and investment” as a challenging task for Saudi banks, experts said local banks have to first excel in services and tackle the issue of human resources through a full-fledged, intensive and regular training program.
Speaking on “Evaluating Saudi banking in light of the world economy,” Dr. John Sfakianakis, chief economist of SABB, said local banks had been facing various challenges and “they need to overcome them through a sustained program.”
He said: “Saudi banks have to become more service oriented and they should educate their Saudi users, in consumer usage. It is not enough for banks to copy each other in terms of products. They should compete in terms of service excellence.” For banks, it is all about service. “If your service is not good, your customers will shy away,” was his message.
He opined that it was difficult for local banks to expand regionally and beyond, because they may not have sufficient capacity to undertake acquisitions and mergers.
Even major local banks have not expanded globally, with one exception in Malaysia, because they have not ventured into acquisitions and mergers due to capacity constraints, which don’t seem to dissipate. There are only isolated instances when a Saudi bank has ventured into major stake holding positions in financial institutions in Turkey and Pakistan.
Sfakianakis mentioned human resources as an issue that every bank must focus on. “It is an obstacle in the progress locally or regionally. “HR issues are critical for Saudi banks,” he added.
Saudi Arabian Monetary Agency is doing its best and offering protection to the local banks and providing training support through the courses offered by the institute of banking. “But there is a lack of talent which can be harnessed through an intensification of the partnerships between banks and institutes of higher learning. Much more needs to be done in this sphere.”
Likewise, banks should demonstrate their commitment on social responsibility by working with others like universities to enhance the talent pool and the skills required to enhance productivity in the banking sector, he said.
Dr. Adrian F. Cockram, CEO, Gulf Advisors, in a topic on CSR and corporate sustainability in a changing world, said “for companies to survive, they need to exhibit traits and personalities that we as customers and employees want to become engaged with over a long term.”