Kamyab Pakistan

Kamyab Pakistan is all about recognition of success stories

Kamyab Pakistan is an initiative of the Jang Group, aimed at narrating and celebrating the success stories of outstanding entrepreneurs and corporate leaders in their fields. The philosophy behind conferring this noble award evolves around two intentions. First is to acknowledge their untiring efforts and exemplary work in their careers. Second is to benefit those young people who are about or have just started their professional career. The award winning people will become role model for the new comers.

The programmed Kamyab Pakistan starts with the introduction of the celebrity by the Group Managing Director who narrates his or her lifestyle, career, perception of his friends and colleagues about him, et cetera. In the second part of the programme, the guest of the evening is invited to talk about his/her corporate entity and/or industry to which he/she belongs. The speaker mostly starts speaking about history and ends with depicting a likely future scenario. He/she also speaks about difficulties and/or opportunities and challenges that the industry as a whole faces. In the end, the audience comprising students, young executives and journalists ask interesting questions from the guest of honour.

The first Kamyab Pakistan citation was presented to former prime minister of Pakistan Shaukat Aziz who narrated how he and his team had brought about an economic turnaround in the country during his period. Musharraf Hai, the first woman chairperson of Unilever Pakistan, became the second recipient of this prestigious citation. She talked about top-tier local and multinational organisations. The third award of this series was presented to Zakir Mahmood, President Habib Bank, the largest bank in the private sector in Pakistan.

Vision leads the way to success
Ali Raza shares how he transformed National Bank 
through sheer hard work, motivation and team spirit

By Salman Siddiqui

Success does not grow on trees. It comes from dedication and devotion besides hard work in the career and life. Some people may achieve it sooner, as they open their eyes in well-off families and may stand tall on the shoulder of their forefathers.

But Ali Raza, the son of first commissioner of Karachi Syed Hashim Raza, chose to stand on his own feet although he could use contacts that he had inherited from his father to grow.

Raza, the President of National Bank of Pakistan (NBP), had not thought that he would be a banker one day until he specialised in Monetary Economics from the London School of Economics in the early '70s.

In 2005, he was ranked among top 25 corporate leaders in Asia by the prestigious Business Week magazine and is currently known as a successful banker in the contemporary world.

"I had absolutely no intention or idea of going into the banking sector till I graduated," Raza says and explains, "the beginning of the end of communism and the start of globalisation in the first half of the '70s made me to start a career with a financial institution."

He was speaking to the audience at the Kamyab Pakistan event, organised by the Jang Group recently to acknowledge the outstanding services he has rendered in the banking industry over the last 35 years.

He entered the professional world with the first job at the multinational Bank of America in 1974. At that time, there were only two biggest beneficiaries of the growing globalisation with their worldwide network -- Citibank and Bank of America. "The latter looked attractive because of its location in California," Raza says and quickly adds he had been in California before joining the bank.

He served there for 26 years or till the Bank exited Pakistan and 20 other countries in 1999. He held key managerial posts throughout his career at the bank. At the end, he was heading the bank's operations in the Middle East and Africa.

He had the option to continue with the bank, but preferred to join the NBP in the year 2000. "The opportunity of heading the NBP touched my heart and I took this as a unique opportunity to serve my country," Raza shares.

He is the architect of modern NBP as he along with his senior colleagues dismantled the bank's old structure a couple of months after taking it over and rebuilt it from scratch.

Raza says when he joined the bank, it was virtually making no money. Eighty per cent of the bank's revenue was generated from the government. "Pre-tax profit was less than one billion rupees in 2000."

A first glance at the fast drying-up balance sheet of the bank suggested to sit down and try to understand the organisation before making any changes or developing strategies. In the first three to four months, he visited branches across the country and met people to reach the root of the fatigue.

"After four to five months, I came to the conclusion that employees were loyal and committed to the bank. But they had the mentality of maintaining the status quo, which was very common in a governmental organisation," Raza explains.

While utilising his 26 years of experience at a multinational bank, Raza formed 29 regional committees and removed virtually three layers of decision-making in collaboration with the senior management of the bank.

In addition, his top-ranking team and Raza tried to develop a  culture of team work, enhanced employees' level of motivation and compensation and gave them career direction. These radical changes in the structure refined the bank and took it to the level of an organisation functioning in the US.

"It was a gamble to apply the American business model here in Pakistan, as there was no guarantee what worked in one country would also work in other parts of the world," Raza says.

But he succeeded. The bank started making money after being transformed into a true multinational organisation. Today, it maintains a number of branches and franchises in 27 countries. Besides, this largest bank of the country has a local market share of 16 to 17 per cent. Fifteen per cent assets of the bank are parked abroad and the remaining 85 per cent at home.

Earlier in 2002, the NBP started hiring MBAs, around 130 every year, totalling 900 today. In the next six to seven years, it will be having 1,500-2,000 highly competent, qualified and young people in all parts of the organisation, the NBP president informs and says 30 per cent MBAs are female.

"By using its network of worldwide branches, the bank is trying its best to attract more foreign investment and take local companies abroad," he says.

The reason that's why NBP aggressively opened franchise in Middle East, Central Asia and South Asia in recent times is that Asia is the region from where the future of the world would now be nurtured, Raza foresees and adds, this region holds 65-70 per cent of the total world population, which is such a big market and no one can afford to ignore.

Almost every leading economy, especially of the US, Europe, Japan and Singapore, have collapsed following 2007-08 world economic recession, and they are needed long time to recover. While economies in the Asia i.e. in Middle East, Central Asia and South Asia did not take that worst impact of the recession of which the developed economies did, he elaborates and adds, Brazil, Russia, China and India would be the four leading counties from the front to determine the future of the world, while next eleven counties (including Pakistan) would be assisting them to nurture the world's future.

In this context, Pakistan has a central role to play. This is the country which connects Middle East, Central Asia and South Asia. Almost all the countries in these parts of the world have to go through Pakistan. So Pakistan is the gateway to the world, President-NBP believes.

"In the next two to three years, Pakistan would have won the war against terrorism and be growing on and on. Above all world cannot afford to have a destabilize Pakistan", he opines.

In its survey conducted in 2006, the Goldman Sachs has pointed out Pakistan as one among the next 11 countries, which would make the future of the world, he cities.

Now country has two or three big internal problems. If it resolves its energy issue and focus es on agriculture sector then no one can stop it from growing prosper.

Lack of research culture and absence of think-tanks in the country were continuously keeping the country directionless. People, especially the media, make baseless debates, which are giving wrong direction to the people in many cases. So the formation of a think-tank is a must to talk about right issues instead of harping on non-issues, he concluded.

Honouring a role model

Shahrukh Hasan, Group Managing Director Jang Group, presents NBP President Ali Raza with the fourth Kamyab Pakistan citation

Shahrukh Hasan, Group Managing Director Jang Group of Companies, paid rich tributes and underlined the role played by the President of National Bank of Pakistan Ali Raza, in Pakistan's banking industry at a ceremony held to present the Kamyab Pakistan citation.

Speaking on the occasion, Shahrukh Hasan informed the audience that this is the fourth Kamyab Pakistan event of its series that the Jang Group organises on regular basis to acknowledge the services and contribution of Kamyab (successful) Pakistanis in different fields. "Some of the readers might recall previous events but for the benefit of others let me quickly explain the concept and rationale behind Kamyab Pakistan."

"Today, it is our pleasure to recognise the contribution of another illustrious son of the soil, one of the best bankers of the country, Ali Raza, President of National Bank of Pakistan, the largest bank of the country.

Ali Raza is the scion of unarguably the best-known family of this city. His father, Syed Hashim Raza, was the first commissioner of Karachi and his contribution in rehabilitating the displaced Mohajirs who migrated from India earned him the gratitude of millions of families settled in Karachi. He was also the noted literary figure, as was Ali Raza's uncle, the late Aale Raza Saheb. His other uncle was the Advocate General of Pakistan. T

Ali Raza graduated from the London School of Economics and acquired his post-graduate degree from the City University of London.

In a distinguished career spanning over 32 years, Ali Raza dedicated his services only for two banks. He started with the Bank of America and stayed there for 23 years till the bank divested its interest in Pakistan.

During this period, he served with great distinction as the Head of Credit & Marketing and Head of Operations in Bahrain and Yemen. He was the first local head of the Bank of America in Pakistan. When the bank divested in 1999, he was overseeing 28 branches across the Middle East and Africa.

Ali Raza became the president of National Bank of Pakistan in the year 2000. When he took over the bank, it had a pre-tax profit of less than a billion rupees. In 2006-07, the profit swelled to Rs 2.85 billion.

Ali Raza has built institutions and some of the best bankers in the country have been trained and nurtured by him. People who have worked with Ali Raza regard him as an outstanding leader. They say that he is the team builder and provides an environment which inspires trust, confidence and loyalty.

Mr Ali Raza, everyone I spoke to regarded you as an outstanding leader and credited you  for their own growth and success. Members of your team, both at the Bank of America and National Bank, regarded you as a visionary leader. They are of the unanimous opinion that no other banker has the same grasp of macroeconomics and understands the dynamics of the Pakistan's economy as you do.

Ali Raza's closest lieutenants -- most of them renowned bankers -- say that Ali Raza's greatest strength is that he not only allows discerning views but also encourages people to speak their minds. His dynamism is infectious and filters down across the entire organisation. Mr Raza's subordinates consider him a counsel, a guide and a mentor. Talented people gravitate towards him. It is no coincidence that Raza has always been able to build an excellent team.

In a long list of credits, there are one or two debits as well. If Pakistan loses a cricket match, it is best to stay away from him. His passion for cricket is second only to the knowledge of the game.

Ali Raza is a very devoted family man. Especially, after the sad demise of his wife two years ago, he normally finds him at home in the evening spending times with his family.

He has excellent taste in clothes and is a flashy dresser, which is evident today as well. He is an ardent lover of music and he is a bit of movie buff. But I should now stop and give him the opportunity of recalling the events of his outstanding career."

Face to face with Ali Raza

NBP President Ali Raza answered queries from the media and students and spoke on a range of issues

Q: Please tell us something about your childhood with particular reference to the days in which you were beaten, frequently or occasionally, by your father to whom you idolise in many ways?

A: Yes, almost every child is beaten by his/her father. But my father was just the opposite and a person possessing soft heart. Therefore, I was not a victim of his beating in any way. Yes my father is my role model in many ways. He had a very unique personality, both as a father and as a civil servant. My father hated the word 'bureaucrat' for himself and preferred to be called a civil servant. He was fond of literature, poetry, reading, writing, etc. His positive attitude was his great characteristic.

Q: In which subject you acquired post-graduate degree from the LSE?

A: I spoecialised in Monetary Economics there.

Q: Sir, I am a student of Economics & Finance at the CBM. Where should I seek my career after five to six years, whether at the State Bank or stock market?

A: You see, once you finish your MBA you should not restrict yourself to working only for a financial services organisation. Your spectrum should be the whole industry. I think this is a misconception among young people of this country that they see only to joining the financial institutions after their MBA. You should also search for demand in government organisations. In my opinion, the government in the next four to five years is going to move into public-private partnership mode of working and it will require people from the private sector to help this paradigm of partnership which is inevitable.

Q: You had so many highs in your career. Any regret about something left undone?

A: Yes, there is one that I was not able to spend as much time with my family, with my wife, as I wanted to. That is the only regret I have, otherwise life has been great.

Q: You said something about the need for a think-tank. I agree. One of the issues that came to my experience in the print and electronic media is the freedom of expression. Press perhaps is enjoying it. But the problem is freedom to information and I think this is what creates speculation and rumours and raises concerns. When everything is guarded as a national secret and nobody is willing to give us the information that is required as part of our right, I think this is probably the area to be concentrated on more in order to make it a little bit more transparent. What do you say?

A: I think the best way to address this issue is to depend on the Planning Commission or the State Bank because these are authentic and reliable institutions to do the needful in this regard. But I will reiterate that we at the NBP are willing to support the idea of creating a think-tank.

Q: It is said that you do not accept the recommendations which do not meet merit. Would you like to tell us how many loan applications did you reject which were not meeting the criteria set in the loaning schemes, but you were asked to approve   the same by some influential. And if you have approved some undeserving loans just because they were put up in front of you by some powerful people, then would you like to reveal how many of them were of bigwigs and how many were from ordinary people?

A: You have really raised a good question. Rather you have given me an opportunity to speak on this very important issue of writing-off loans. You see, banks give loans to the companies against collateral. But collateral is not the source of repayment of loans. It is the cash-flow of the company, which is the source of repayment. On the basis of cash-flow, banks decide whether the company should be given loan or not.

But when a company is declared bankrupt and has virtually no cash-flow, then banks go for auction of that collateral. Usually, auction of the collateral does not pay the equivalent amount the bank had given into loan to the said company.

For example, if the loan was worth Rs 100 and the company has been declared bankrupt and has no cash-flow and the bank goes for the auction of the collateral and it could receive only Rs 60 then the bank has to write off the amount in balance of Rs 40. There is no other treatment of bad loans in accounting, but write-off.

Now I would like to tell you the reason why the size of non-performing loans (NPLs) seems to be continuously rising in Pakistan. In the US and Europe, banks do not take NPLs in their profit & loss accounts and balance sheets, but remove them (NPLs) from their accounts. Here in Pakistan, we maintain NPLs on our profit & loss accounts and balance sheets to take the benefit of tax, because it takes years and years to take the benefit of tax against NPLs, so the stock of NPLs seems to be accumulating in banks in Pakistan. But provisions against NPLs are significantly higher and are about 80-90 per cent.

National Bank has a very strict policy regarding write-off. Yes, we might have accumulated bad loans owing to our write-off policy for those widows, orphans and unemployed people who had taken loans of less than 500,000 rupees. In addition to this, there might be some other kind of loans which the bank had written off.

During the last nine years, write-offs by the National Bank were a mere 4.5 per cent in aggregate in the entire banking industry of the country, where we have a 16 per cent market share. The numbers are not relevant, but the percentage is relevant. But write-offs are the fact of our life, you can't do anything about it.

Q: Every economy nurtures entrepreneurship. Now at a grass root level do you see you guys including Shahrukh Hasan and Imran Aslam are forming a think-tank at this point in time. Do you see any sort of structural format for the masses in terms of nurturing their entrepreneurship skills?

A: Entrepreneurship is very different from getting job and working. There is no institute anywhere in the world that creates entrepreneurs. Young people have a choice either they want to develop a career or want to do something on their own. If they are creative then they don't need to be in the financial sector. They could be in art and could be anywhere. Even in America, I have not heard about schools of entrepreneurs. Yes, there are business schools, which may have some percentage of curricula devoted to successful entrepreneurs.

May be the Bill Gates model or whatever. Entrepreneurs are born. I don't think they are created in schools or universities or in factories.

Imran Aslam: I guess what you are trying to say is that banks should try and facilitate the growth of entrepreneurs. I think that most banks should be doing in any case and helping a person to understand what the risks are and looking at feasibility so and so. But the other problem is that we as a nation perhaps are very ashamed of being called a businessman. I mean this country has not added one single autobiography of any great industrialist.

One will hope and we are thinking about forming a think-tank. We need to allow finally to say there were some excellence in the sectors and all the people who were there in the past -- the Isphanis, the Adamjees etc-- perhaps someone should sit down and start writing their life stories and inspire people who want to get on and become entrepreneur in future. T

Ali Raza: May be I misunderstood your question. But if it was about banks' support to the small & medium enterprises (SMEs) then this is not a product like auto or home loans, but certainly is dealt with on case-to-case basis. Banks would be very happy to look at new businesses at small scales ie SMEs. Going forward, the future of banks does not lie in the corporate side or retail side. The future of banks lies in agriculture and SMEs and what you were suggesting was pretty much about SMEs or venture capital category, etc. But I want to tell you that banks will now be specialising in the SME sector. There are two to three banks working on this subject. I don't want to disclose their names here, but they are virtually shifting their entire business to the SMEs.