Month: October 2011

A national network for the national interest

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In autumn 1996, Azerbaijani TV channels started to air an ad campaign that – with the country in only its fifth year since declaring independence from the USSR – was both surprising and original in the way it grabbed the attention of its viewers. “You will step beyond limits,” it announced; “Now, everybody will speak!” The company that introduced the advert was Azercell – and when this new mobile telecoms provider appeared on the Azerbaijani market in December 1996, it immediately set about fulfilling these grand promises.

Today Azercell has more than 4.2 million subscribers who enjoy the company’s long-standing commitment to providing reliable, high-quality and affordable services, and paying close attention to its clients’ needs.

Obviously, such commitments do not come easily. To defend its position in the highly competitive modern telecoms industry, Azercell is in the process of modernising its equipment and introducing new, innovative technology to help to expand its reach.

Currently the company controls 54 percent of Azerbaijan’s mobile communication market. Its network covers 80 percent of the national territory, meaning 99.8 percent of the population has access to Azercell’s services. To enhance its customer relationships and get closer to its clients, Azercell has opened 31 Express Offices – one-stop-shops for payments, new purchases and customer support – 19 of which are located in Azerbaijan’s regions.

Embracing the nation
The quality of a mobile network depends mainly on the number of base stations it has and the penetration rate of mobile technologies. In order to extend its communication services, by the end of 2010 Azercell had deployed 18 base station controller systems, 18 mobile communication switchboards and 1,794 radio base stations. During 2010, the company installed 170 stations in the regions of Azerbaijan.

Indeed, thanks to these investments, Azercell is now proudly omnipresent. From subway stations and tunnels to the tops of mountains, the company can provide the means of communication to people everywhere in Azerbaijan. Many of the opportunities such a network opens up were made available for the first time in Azerbaijan by Azercell. The company is also ready to apply 3G, 4G and other technological innovations to the market.

The company pays particular attention to the development of international communications, because in a time of continuing globalisation telecoms cannot be limited to just one country. By the end of 2010, Azercell subscribers were able to call phone numbers on the networks of 406 operators in more than 152 countries by using the RoamCell service. In 2010 the company started providing additional roaming services with 20 mobile operators in 18 countries; and also became the first operator to sign agreements allowing GPRS roaming services with foreign companies. By the end of the year, Azercell had established this type of cooperation with 258 mobile telecoms operators in more than 100 countries.

Such activities require significant investments. In 2010 Azercell invested almost $108m in developing its network, while the total level of investments made over the last 15 years is approaching $885m. Azercell is the largest investor in the national non-oil sector.

Investing in people
Human resources are the main asset of Azercell, and are of paramount importance for the company in its aspiration to provide better services to its subscribers. Accordingly, Azercell invested almost $1.3m in the development of its employees in 2010 – contributing to a total investment over the last 14 years of $11.2m. It would be hard to find any other company in Azerbaijan that invests so much in the development of its staff.

Azerbaijan is known for its ancient charity traditions. Azercell has always preserved these traditions and defined corporate social responsibility as one of the main priorities in its activities. In 2010, Azercell spent almost $1.4m (totalling $14.7m in 14 years) on the implementation of social projects in the country.

Over the last 14 years Azercell has acted as the general sponsor for the Umid Yeri Shelter and Rehabilitation Centre for Street Children. During this time nearly 1,000 children were raised and brought back to a normal life in the Umid Yeri Shelter. This represents a great achievement, because children living on the streets are at risk of being exploited by criminals, having their lives ruined by disease, and falling prey to human traffickers. Currently there are 45 children in the shelter.

In 2004 Azercell launched its ‘SAY’ poetry and storytelling contest, with the objective of identifying and encouraging talented children from all over the country. In 2008, working with the Ministry of Labour and Social Protection of the Population of the Republic of Azerbaijan and the United Nations Children’s Fund (UNICEF), the company launched its ‘Every Child Needs A Family’ campaign to help children to grow up in a family environment. The aim of this campaign was to promote information about the right of children to live in a family environment, promote adoption and fostering, and support the efforts of the government in creating integrated social services for children at local level.

The company was also instrumental in creating the Mobile Dental Clinic and Mobile Eye Clinic, which serve to protect the health of children, particularly those in orphanages and toddlers without parental care. In 2010 the Promising Future Youth Organisation launched a Children’s Hotline with the support of Azercell, the Ministry of Education, UNICEF, Save the Children and World Vision. This hotline provides emotional support and counselling, as well as advice on various problems, signposting to rehabilitation centres, and urgent aid.

And in 2010 Azercell Telecom committed to the fight against human trafficking by supporting the Azerbaijani events that took place as part of the international End Human Trafficking campaign – including a visit by Vaira Vike-Freiberga, the former President of Latvia and Special Advisor to the UN Secretary General.

Ready for the future
Azercell also recognises the importance of being a good taxpayer, and has become a good model for others in the sector. In 2010 Azercell paid almost $114.6m to the state budget, and around $868.2m over the last 14 years of its activities. Azercell’s payments in 2010 amounted to 1.85 percent of the state budget. The company is one of the largest taxpayers in the non-oil sector, making it a significant player in the Azerbaijani economy.

With the aim of bringing further pioneering innovations to the Azerbaijani telecoms sector, Azercell started the Barama project (literally: Cocoon) in 2009. Barama is designed to enable the development of creative and innovative ideas related to ICT – not only with the aim of presenting new solutions and innovations in the field of telecommunications, but also contributing to the social prosperity and economic development of the country.

Technology innovation key factor

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Kazakhstan’s state insurance sector is growing rapidly and presents many opportunities to ambitious companies that are not afraid to invest time and effort to bring the best deals to consumers. With the help of technology and through close government collaboration, BTA Insurance has achieved exactly that. The group has taken the helm at the forefront of the insurance industry’s developments within this growing country. In fact, recent figures showed that Kazakhstan’s economy is on a path of recovery with GDP growth exceeding 6.9 percent in the first quarter of the year with an average of around the same over the next five years from its current $9,000 to around $15,000 by 2016, the government of Kazakhstan reported. This presents an immense opportunity for a company which is striving to grow to its full potential.

BTA Insurance is a subsiduary company of BTA Bank, which in turn is a subsidiary of the Samruk Kazyna National Welfare Fund. The bank has shown involvement in various segments of the market and has emerged as a significant player in the Kazakhstani market.

According to the company, one of the most equitable divisions within insurance has proven to be international reinsurance. The group has recently stepped into this field and is hoping to expand further to be able to provide the best service to its clientele. It has long been known that BTA Insurance has an established proficiency within the insurance business. It is because of this knowledge and standing that it endeavours to discover new mechanisms of communication for its clients by providing novel, superior services that are also easily accessible to consumers.

In December 2010 BTA Insurance joined forces with two other industry players, Atlanta Polis and BTA Zabota. Progress since the merger and the company reorganisation has already revealed promising end results as the companies work together to bring into line their efforts to produce the best products and services for their clientele.
Sergey Lavrentiev, the Chairman of BTA Insurance’s board, said: “At the end of last year we assumed our assets in addition to all rights and obligations of the other two companies. This was quite a challenge yet taking into account the harmonious work of the three teams we were able to combine all assets and capture rights and obligations of the two new insurers within the space of only a month. Thanks to this we have successfully accomplished the reorganisation, and as of the start of 2011 were again in a position to continue separate insurance activity on behalf of BTA Insurance as well as for both legatees, BTA Zabota and Atlanta Polis.”

The unification was not easy however and the insurance company faced some obstacles on its way to integration. These were especially related to IT technologies as each of the three companies used different software systems. Luckily, this was swiftly resolved with an arrangement between the IT teams which were able to amalgamate the three insurance databases. On a smaller scale BTA Insurance had to deal with employment-related issues linked with the merger but was successful in meeting its social obligations and kept on most of the integrated companies’ staff.

It seems BTA Insurance’s timing slots perfectly into place with the recent diversification plan that has been announced by the nation’s government. The authorities have undertaken plans to expand the economy from its dependence on commodity prices. Kazakhstan’s government also hopes to achieve a balanced growth based on competitive and dynamic industries. In spite of all the progress however there are still elements that require advancement.

The company’s reorganisation took place within the Kazakhstan insurance market, which despite its signs of positive trends, is nonetheless poles apart from any other insurance market due to its more complex operating system. According to BTA Insurance’s chairman, the Kazakhstani Insurance market differs from other markets within CIS because of higher requirements from the National Bank of the Republic of Kazakhstan towards financial sustainability and reliability of insurance institutions.

“The country’s National Bank in its role as regulator of the financial market increases the solvency requirements of insurance companies with the aim to transfer to the implementing measures of a Solvency II level. As a result the Kazakhstani market is considered one of the most transparent markets within CIS for investors. We think that rising requirements of the National Bank of Kazakhstan will make other insurance companies follow the way of integration of the assets,” Lavrentiev says.

The company’s strategic goals had to adjust after its recent joint venture. Those new objectives come with responsibilities and higher risks but the company is aware of them and has prepared. Its assets have risen and surpassed KZT26bn, while equity rose to KZT22.5bn, now placing it third by size among its competitors. That fact gives additional potential for impetuous growth and development.

“Indeed, BTA Insurance has changed its strategic targets primarily as a result of the reorganisation. Since the fusion we have become one of the largest insurance companies in the country with representative offices in 22 regions. The asset and equity increase allows us to keep going with confidence while we compete with the other leading companies within the Kazakhstani insurance market. I believe it is fair to say that gives us additional potential for impetuous growth and development,” Lavrentiev notes.

Although perceived as a relatively tough challenge, the company strives to enter into competition with the top seven insurance companies of the Republic of Kazakhstan in terms of premiums collection. BTA Insurance is unwavering when it comes to its recognised service quality for insurers, however, and is adamant that quality will remain constant. It plans to create a simple, convenient environment with flawless techniques for insurance agreements. According to its chairman these will be go hand-in-hand with the development of new, watertight products for all insurance classes, among which medical insurance will present  competitive advantages.

The market is constantly changing and the company is adapting to the needs of clients relentlessly. For instance Kazakhstan experienced a bout of heavy rains over the past months which caused house owners to at last consider insurance. According to reports it increased by as much as 10 percent over the summer. On average an insurance policy for a house of around 100sq. m could cost anything from $20 to $22 but momentarily, insurance of flats with a mortgage is obligatory while houses are not. The company knows that this is a small price to pay compared with the loss that could occur. BTA Insurance works with clients to ensure the best option is chosen depending on the individual needs, but it never loses sight of being open and honest with consumers.

The chairman states: “Our priority is to create a transparent universal insurance company which offers an elevated added value. In addition, we are ready to demonstrate our capability in the area of reinsurance, both in Kazakhstan and within the international insurance market. The plan is to achieve an international rating and to become an established insurance company with highly professional personnel.”

BTA Insurance prides itself in being able to consistently uphold the company’s key mission to protect the financial prosperity of people and companies it serves. The undertaking to keep its promise is largely achieved through accessible and satisfactory requirements to delivered services in the property and liability insurance field. This manifests itself particularly in the insurance premiums that have been paid out in the first half of 2011. The company ensured that payouts were accurate and timely, yet in strict compliance with the legislation of the Republic of Kazakhstan. So far the insurer has paid out $4.9m in total, including $1.09m for medical insurance, $1.7m in vehicle owner liability insurance, $1.6m in employee accident insurance, and $300,000 for motor transport insurance.

There is not much that can now stand in its path as progress continues, and the unification has run smoothly for BTA Insurance. The insurer has now reached a stage which requires it to look beyond its comfort zone. It is planning to obtain international ratings to confirm the financial sustainability and solvency of the company. “From our point of view such ratings, especially if received from an international rating agency and coupled with a high level of capitalisation will support our company in accessing the international reinsurance market. We realise that we take significant risks but we join the international insurance pool only to cover the risks that are taken abroad and handed over to us,” Lavrentiev says.

Social responsibility and community support play an important part within BTA Insurance and it tries hard to continually take an active part in the public and social life of Kazakhstan. The insurer gets involved in events within various communal organisations and unions. Most recently BTA Insurance worked alongside the Sport Climbing Association which unites children and adults by insuring them on all sports competitions. The company has also insured a range of other state organisation including the Library for Blind and Visually Impaired. Moreover, BTA Insurance integrates CSR into its relationship with the government and even competing insurance companies.

Lavrentiev notes: “We maintain close relationships with the authorities and other insurance companies. These particularly relate to the creation and development of mechanism on insured risks regarding consequences from natural and technologically caused catastrophes as they are socially significant to the entire population. It is important to us to offer a broad range of options to our clients.”

Are you cut out to be an investment banker?

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Working in the field of investment banking can be a great career, provided that the individual is willing to undergo the training and endure what can sometimes be a stringent process for finding, applying and ultimately securing the desired position with an investment bank. Considered one of the most difficult types of financial employment to enter, applicants must be able to prove they have the necessary educational credentials as well as the innate skills to function within the culture of the bank. At times this may mean taking on a less than desirable position in the hope of later gaining promotion within the corporate structure.

Before ever applying for a job at an investment bank, achieving a high standard of both formal education and practical experience is essential. Securing a degree in finance that will translate well into investment banking and perhaps taking on a part time job at a commercial bank, for the sake of experience, might be advantageous. The combination of educational expertise plus a background of working within a financial institution can make a prospective employer think twice before moving on to the next candidate.

Taking some time to learn more about the employer will often go a long way toward paving the way for landing that desired position. This is true when seeking to secure work with a locally owned investment bank in Nepal or Canada or with larger companies such as Jeffries or UBS Investment Bank. Including a sentence or two that indicates at least some degree of familiarity with the bank concerned in the cover letter with the application, as well as speaking knowledgeably about the bank’s mission statement or its suite of services during the interview will indicate that the applicant is interested in being a part of the organisation and making a difference, not merely securing a regular source of income.

Considering what type of investment banking job may be the best fit for the applicant’s skill set is also crucial. Not everyone is cut out to be an investment banker. Some applicants may be better suited to ancillary roles, such as providing support with merges and acquisitions, working with clients interested in capital markets, information technology or even rating related to the different types of investment markets. All these positions, as well as many others, are crucial to the life of the investment bank and the support of its clientele.

It should always be borne in mind that, along with traditional investment banks, the ability to secure remote work with an online investment bank may be a possibility. This means someone living in China may be able to successfully work for a European investment bank, particularly if that individual is well versed in current technology as well as banking and investment laws and regulations.

Above all, landing a job at an investment bank requires demonstrating a degree of personal decorum, the ability to think clearly in the event of a crisis and deal with stress on a daily basis. Life in an investment bank is often fast-paced and not for the squeamish. By being able to convey to prospective employers that they have these qualities, applicants are much more likely to successfully complete the interview process and secure the type of job they are looking for.

Key risk elements in post-crisis finance

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The crisis that has enveloped the world for the last three or so years has resulted in dwindling margins, a lack of alternative investment strategies, and an uncertainty surrounding organisational survival. All of these have resulted in a closer scrutiny of risk management practices, a more comprehensive evaluation of the various risks underpinning a transaction, and the way these need to be managed.

 

Capital adequacy regulations are supposed to give the average investor and depositor the confidence that the financial institution is immune from risk, particularly systemic risk; but recent events have exposed the flaws in this notion. Eight days before it was nationalised, Northern Rock had a total capital adequacy ratio of 14.4 percent, nearly double the eight percent required by the Financial Services Authority, in line with Basel II guidelines. HBOS, as of December 31 2007 had a total capital adequacy ratio of 7.7 percent.

 

Why then, did these two organisations not show any immunity to the worsening crisis seen in 2007-8? Simply, capital adequacy directives, and indeed anything that central banks have outlined as positive governance, have not been subject to either robust stress tests, nor tested in crisis situations. This is not a criticism of the capital adequacy framework but an admission that this framework could not withstand the financial pressure when the crisis set in.

 

The consequences of liquidity risk
It is now clear that sustainable business growth cannot be managed from within, and expansion into unchartered territories is of the essence. This adds to the risk elements that need to be considered, as cross-border considerations, cultural adjustments, and transfer risk need to be managed – in addition to the other financial risks that are inherent in any transaction. This adds to the burden on weakening margins, and has increased pressure on business unit heads and risk managers.

 

The pressures that caused the demise of most financial institutions did not relate to capital, and in the case of most banks that went under in the UK, not subprime-related lending either. It was a result of liquidity mismanagement. This is what wiped out their positive cashflow structures within a two- to three-month period, resulting in a deterioration of cash operations.

 

Liquidity, up until 2007, was rarely mentioned in regulatory circles: it was accorded step-motherly treatment by almost all regulatory regimes, it was the ‘forgotten risk,’ an ‘Asian problem,’ a ‘Russian problem,’ or not an issue at all since it is guaranteed by the central banks.

 

Liquidity risk was regarded by many as inconsequential, since liquidity was always guaranteed by the central bank. However, recent events have clearly demonstrated that most central banks did not step into the role of ‘lender of last resort,’ as evidenced by the spectacular collapses of Northern Rock and Lehman Brothers. It is now certain that the culmination of all risk pressure points is a liquidity shortfall, and while the regulators have tried to shut the proverbial stable door, the horse has long since bolted. It is imperative that the HSBC financial institution leadership understand the inter-relationships between the various risk elements and liquidity and start to understand the dynamics of liquidity risk.

 

A more complex analysis
It is not possible to use standard liquidity ratios for liquidity management for the following reasons:

 

• the adequacy of a bank’s liquidity will vary;
• in the same bank, at different times, similar liquidity positions may be adequate or inadequate depending on anticipated or unexpected funding needs;
• likewise, a liquidity position adequate for one bank may be inadequate for another;
• what is liquid in one market may not be liquid in another;
• liquidity is completely governed by an organisation’s risk appetite and therefore cannot be prescriptive.

 

Determining a bank’s liquidity adequacy requires an analysis of the current liquidity position, present and anticipated asset quality, present and future earnings capacity, historical funding requirements, anticipated future funding needs, and options for reducing funding needs or obtaining additional funds.

 

As federal regulators have noted, the treatment of non-maturity deposits will be, for many banks, the single most important assumption in measuring their exposure to interest rate movement. The regulators continue to rely on a bank’s internal modelling systems to determine the value and interest rate sensitivity of such accounts. This presents all bankers with the difficult task of accurately calculating the market value of deposits and credit card loans, as well as developing effective hedging strategies to protect this value against market rate movements.

 

Similarly, with the continued consolidation trend in the banking industry, accurate valuation of demand deposits, in particular, becomes critical in determining the value of an institution or a single branch. Acquiring and/or target banks will need to measure the deposit franchise value based on the unique characteristics of an institution’s deposit portfolio.

 

It has now come home to roost with the Northern Rock debacle – which was not a credit risk problem, but a plain liquidity crisis caused by others’ credit risk woes.

 

Capital adequacy ratios cannot and will not assist a financial institution in a liquidity crisis simply because the amount of capital held has no relevance to an organisation’s cash position and strengths. Capital is an accounting book entry and is no substitute for short-term positive cashflows. It is therefore time for the regulatory regime to take a long, hard look at its cashflow policies, and embark on a healing journey.

 

More dynamic risk assessment
There exist key dependencies between market risk factors, macro factors, and idiosyncratic counterparty factors. For instance, oil prices are correlated with interest rates, and these influence together the creditworthiness of all organisations in the hotel and tourism industry segments. It is evident that risk factor correlations have to be studied and understood if margins have to improve, and strong pricing decisions can be taken if such inter-connections are analysed and understood. It is manifest that all risk variables are interconnected, and it is futile to embark on an understanding of interest rates without understanding the macro factors that drive interest rates. Not doing so will result in sub-optimal pricing decisions, and in this era of dwindling margins, this may be a killer blow.

 

In such an environment, an incorrect assessment of risk will be the death knell for organisations, and so, a more dynamic, proactive, and co-ordinated approach must be adopted in risk assessment within an organisation.

 

Financial institutions must undertake a more searching examination of their balance sheet structures, and decompose their balance sheet into contractual, and more importantly, behavioural, cashflow buckets. Most retail lending and funding organisations have to contend with customer behaviour as a key rationale for the understanding of mortgages and non-determinant maturity cashflows. Without a good understanding of customer behaviour analytics, any structure of liquidity will be inadequate.

 

Regulators in most regimes have adopted a knee-jerk reaction to the current crises and have tried to formulate regulations that seek to eliminate systemic risk, but such over-the-top regulation has given rise to regulatory arbitrage, or the use of capital to a firm’s advantage while playing the roulette of capital adequacy. Capital and liquidity are not substitutes for one another but need integrated management and measurement.

 

Today’s risk leadership must understand that risk cannot be managed in isolation but in conjunction with regulatory compliance, even if such compliance flies in the face of management logic where one sees completely contradictory rules adopted by the central banks and the international accounting standards board on the subject of loan losses.

 

The future of financial institutions is fraught and in these troubled times, the onus on survival cannot be left to the regulatory watchdog. Instead organisations should be bloodhound-like in actively managing key risk areas, of which liquidity is the most prominent. The days of patting oneself on the back because of higher-than-required capital adequacy are not just numbered: they are a thing of the past, and the only way forward is self-regulation.

Peabody to lead bid as ArcelorMittal pulls out of $5.1bn bid

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ArcelorMittal, the globe’s biggest steel producer, late on Tuesday backed out of its Macarthur Coal joint $5.1bn purchase with Peabody Energy, according to the company.

The group originally joined the deal, which will be the second largest coal takeover this year, to help advance its metallurgical coal supplies.

The steel maker has now left partner Peabody Energy to pursue the takeover on its own, saying: “ArcelorMittal has determined that it would no longer be appropriate to allocate substantial capital to the acquisition of a non-controlling, minority business interest.”

Peabody welcomed the news saying the deal will be fully accretive within 12 months, and is to be funded with cash and debt.

Qatar enjoys construction boom

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With the Qatari government committed to increasing services and improving infrastructure in the country – it has allocated $130bn to real estate and infrastructure development over the next six years – and as the country’s construction industry continues to thrive, new opportunities are constantly appearing in the real estate market, with the residential sector, and in particular the affordable housing segment of this sector, showing promise.

This is according to Seraj Al Baker, CEO of Mazaya Qatar, a Qatar Exchange listed company and one of the leading property developers in the GCC. He says that, to date, most developers have focused on the up-market luxury segment, leaving a gap – and major opportunity – in the middle-income, affordable housing sector.

“With the scaling back in investment, and the significant demand in the affordable housing sector – compared to the largely oversupplied luxury sector – developers will likely turn their attention to the middle-income group,” he says.

While Al Baker believes that things in the Gulf region are likely to continue to move slowly, as developers focus on maintaining and managing existing projects rather than on starting new ones, Qatar’s short-term real estate outlook is promising, particularly in light of its winning bid for the 2022 football World Cup.

“Qatar’s residential real estate market is especially positive due to a stable political environment and a strong economy,” he says. “In addition, Qatar’s successful bid to host the 2022 FIFA World Cup will act as a catalyst for significant government investment into infrastructure and real estate development. This will not only enhance the real estate offer in Qatar, but will also give it a significant boost – creating employment, population growth and generating strong demand for all real estate assets over the medium term.”

Infrastructure investment glut
Qatar’s economy is expected to continue to grow at a fair pace throughout the next two years and beyond, particularly given the government’s commitment to invest more than $125bn over the next five years in energy and construction projects as part of its development strategy, and more than $35.7bn in residential and business construction projects.

“The next few years will be vitally important for the real estate sector and for real estate companies operating in Qatar, and significant joint efforts from all sectors and organisations are required to ensure success,” Al Baker says.

As a major player in the Qatari real estate sector, Mazaya Qatar believes that it can contribute considerably to the country’s growth and success, and it has developed a five year plan that covers a number of yet-to-be-announced projects, as well as projects that are already underway and projects that have been or will be completed shortly. The plan also includes a number of strategic agreements to be signed with private and government parties with the aim of serving the interests of shareholders and developing the company to the highest levels.

“Mazaya Qatar’s primary goal since inception has been to lay the foundations for sustainable success, as was apparent from our exploration of opportunities in Qatar’s real estate market,” Al Baker explains.

“It is not easy to make significant accomplishments in real estate at a time of economic fluctuation, especially when the real estate sector is the most heavily impacted sector. However, Mazaya Qatar commenced operations at an extremely difficult time, and we had no choice but to continue – to look for solid alternatives and find innovative strategies that would help us cope with the change and attract investors, building on experienced management and a prudent strategy that focused on guaranteed revenues and minimised risks.”

The company has a portfolio of important architectural and professional civil engineering projects and mega-projects in Qatar, and has made it its mission to execute and deliver these projects carefully and innovatively.

Says Al Baker: “We are committed to making a difference in real estate development, to taking it beyond mere development into a quality business that will help enhance the company’s position in the region and beyond. We are confident that this can be achieved by adopting environmentally friendly values, by operating in accordance with sustainable development principles, and by adhering to the highest international standards.”
building green

In support of its environmental principles, Mazaya Qatar joined the list of founding members of the Qatar Green Buildings Council (QGBC), an independent non-profit organisation committed to developing a sustainable approach to the design and development of buildings in Qatar, earlier this year.

Evaluating Mazaya Qatar’s performance clearly qualifies the company for the significant role it intends to play in the market – over the past two years Mazaya Qatar has consolidated its position in the market, and has developed and boosted its advanced model. The company has also conducted comprehensive feasibility studies and drawn up a mature vision with which it expects to achieve success.

Al Baker highlights the various milestones reached by Mazaya Qatar in 2010: “We launched a successful 50 million share IPO; we officially listed on the Qatar Exchange in October; and we signed three key agreements with the Qatar Foundation for Education, Science and Community Development (Qatar Foundation) – a 10-year agreement for the construction of 350 residential units for Qatar National Convention Centre’s employees, a 20-year Build, Operate and Transfer (BOT) agreement to develop and manage approximately 1165 residential housing units for the nursing and technical staff of Sidra Medical and Research Centre’s Residential Project, and a 30-year agreement to develop and manage the Marina Mall shopping centre in Lusail, Doha on a BOT basis.”

The company also provided countless jobs for young nationals and received applications to qualify a number of contractors before project developments.

Says Al Baker: “As a Qatari company, we see it as part of our national responsibility to consider the potential of Qatari nationals, to prepare career development programmes for them, and to help them take up their role in serving the nation’s goals, working together to achieve progress and welfare.”

In recognition of its outstanding achievements, the company received the Arabian Business Awards ‘Best Vision in Real Estate Sector 2010’ award. acquisition trail

Having achieved great success in Qatar, the company is also investigating the options available for expanding into neighbouring and regional markets.

Says Al Baker: “We are always on the lookout for potential opportunities, both locally and abroad. The decision of which emerging country to invest in relies heavily on the processes and policies set by that country’s government, including licenses, incentives and other government-driven practicalities that need to be incorporated into the decision.

“Each opportunity – and each country – is evaluated on a case-by-case basis, in line with our determination to continue to offer only the best real estate services. As the GCC real estate market, and even the global real estate sector, is expected to continue to improve over the next few years, it is likely to present us with additional investment and development opportunities.

“Mazaya Qatar will be keeping a sharp eye out for opportunities that will be beneficial to our stakeholders and to the company as a whole, while remaining in line with our overall vision and mission.”

Bancassurance partnership targets Portuguese pole

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Insurance and banking have always been partners, but at Millennium bcp Ageas, a joint venture for insurance between the Portuguese bank Millennium bcp and the European and Asian insurer Ageas, this partnership has taken a step further. The insurance holding includes four companies, to better explore each line of business: Ocidental Seguros for non-life, Ocidental Vida for life business, Médis for health insurance and Pensõesgere for pension funds.

Combining the knowledge brought from Ageas with the experience and know-how of the insurance sector in Portugal created an ambitious and innovative operation, with the aim of becoming the market leader in the near future.

At the end of the Q1 2011, Millennium bcp Ageas ranked second in overall insurance in Portugal, surpassed only by the state-owned insurer Caixa Seguros. With impressive key financial and economic indicators delivered at the end of 2010, such as €1.95bn in direct written premiums, mainly from the life business, €13.22bn in assets, 13.7 percent ROE and a solvency ratio of 183 percent, Millenniumbcp Ageas is clearly on the right path to achieving its goal.

The perfect match
In the 1980s, when Ocidental Seguros and Ocidental Vida were formed, the Portuguese insurance market was undeveloped and remained in the hands of insurance agents. Together with Millennium bcp – the first privately owned Portuguese bank, launched in 1985 – these companies introduced bancassurance to the Portuguese market, a concept that would definitively transform the sector (today five of the top six insurers operate by bancassurance).

Growing side-by-side with Millennium bcp over the years, organically and through acquisitions, the insurance operations developed solid know-how and experience. The insurance market went through a period of rapid development, and innovation was essential.

Millennium bcp Ageas was always a leader. For example, Médis, the health insurance company created in 1996, was the first to launch managed care in Portugal. By leading the market, Médis forced competitors to change and adapt.

Ageas, meanwhile, has 180 years of insurance experience, and is ranked among the top 20 insurance companies in Europe. Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market, with annual inflows of almost €18bn.

In 2005 the perfect match arose between Millennium bcp and Ageas when their joint venture was formed. Both are experts in bancassurance: Millennium bcp has domestic market knowledge and distribution capacity, while Ageas has insurance know-how, together with international size and relevance. The outcome is an innovative, solid, profitable and ambitious operation.

Global portfolio AND customer focus
The Portuguese insurance market is now mature, with customers fully aware of product offer and market conditions. This forces operators to continue their innovation in order to make a difference when it comes to guiding customer choice of their insurer. Some do it either through price, some focus on specific advantages, some on solidity, reputation, convenience or service excellence. At Millennium bcp Ageas its a mix, built around a strategy of focusing on the customers.

Being mainly a bancassurance operation, the insurance staff works daily with the bank. In fact, the commercial strategy, product offer and campaigns are developed jointly by the insurance and bank structures. This results in perfect strategic alignment, while also combining deep customer knowledge from the bank branches with tailored commercial approaches. It allows the bank’s commercial efforts to be more efficient, addressing each customer with the right solution.

Recognising and serving customers’ global needs concerning insurance is a strategic business requirement. Millennium bcp Ageas aims to cover all lines of business for individuals and companies (motor, property, health, life risk, savings, unit-linked, retirement saving plans, personal accident, workers’ compensation, liability and others) so that customers are able to resolve all of their insurance needs in a single place: the bank.
From a marketing perspective, efficiency is gained through a commercial approach that brings together all aspects of the purchase funnel. According to the customer relationship cycle with the company – from prospective client to acquirer, followed by loyalty and of course the retention phase – specific measures are taken and different solutions are offered.

Key indicators
The Portuguese insurance sector was naturally affected by the global economic environment, the pressure put upon the euro, the speculation against Portuguese sovereign debt, the sovereign ratings downgrade, and the political instability of early 2011 which precipitated the need for a bail-out, leading Portugal to implement an Economic Adjustment Programme agreed with the IMF/EU/ECB.

Despite the stagnation of economic activity that has taken place, the insurance sector in Portugal is based on a robust model, and is overcoming this challenging situation without financial support from the state, with no cases of insolvency. Indeed, the sector maintains a solvency ratio well above the 100 percent required by the regulator.

And the insurance industry is solid and profitable: in 2010 90 percent of the 82 companies presented positive results, recovering consistently after 2008’s market turmoil. The Portuguese insurance sector is by far the largest national institutional investor, with €62bn under management – 35 percent of GDP – of which €58bn are investments. Portfolios are diversified (67 percent is sovereign and corporate debt) and exposure to Portuguese sovereign debt is just 10 percent of total investments.

At Millennium bcp Ageas, the performance indicators in non-life outpace the markets by far. The company grew 6.8 percent in non-life direct written premiums in 2010 (while the market grew just 0.9 percent), and achieved a non-life net combined ratio of 94.8 percent (compared to 103.9 percent of the market).

Because more than 80 percent of direct written premiums come from the life business, mainly investment products, rigorous asset management is essential. The same applies to Millennium bcp Ageas’ obsession with the ROE high standards and solvency ratio.

Growth strategy – channels
Being at its core a bancassurance company, Millennium bcp Ageas’ objective is to increase the penetration rate for insurance products. With benchmark values in insurance sales associated to bank loans (97 percent in life risk consumer loans, 88 percent in life risk and 80 percent in property, both in mortgage), opportunities remain to explore active sales, especially in non-life. Bank customers’ insurance possession still has plenty of room to grow.

As the company aims to grow further, mainly in non-life, the strategy is focused on diversifying distribution channels. A new agents and brokers channel was developed to address customers in the small and medium-sized business segment. Private sector activity in Portugal is dominated by SMEs, which represent the major source of employment. There are more than a million active SMEs in Portugal, employing nearly 2.2m people. The majority are small and micro enterprises in the tertiary sector.

On the other hand, taking advantage of Médis’ unique value proposition (health insurance), another commercial channel was developed, also with high growth potential: distribution agreements with other insurers. Médis manages a portfolio of over 450,000 insured people, of which distribution agreements already represented 44,475 in December 2010, growing 30 percent by the end of June 2011.

Getting ready for the future
The financial figures are impressive, but focus is imperative to achieve Millennium bcp Ageas’ objective of continued growth and leadership. The economic crisis, market turmoil and banking sector deleveraging all carry huge challenges. Cancellation control has assumed a prime role, and additional customer retention measures are decisive for 2011. Millennium bcp Ageas’ management has already put this into action, with a marketing plan dubbed “The anti-cyclical recipe.”

No end in sight for currency volatility

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The first half of 2011 has been overwhelmed with financial crises both in the US and the eurozone. European challenges centre on the lingering debt crisis, which has hindered growth prospects tremendously. The extent of the debt woes are so significant that many analysts predict the issues will persist for at least a couple of years before a recovery is completely assured.

Greece heads the group of struggling countries in the eurozone, as the country will now receive a second bailout package, which was recently approved. Greece received its first bailout (to the tune of €110bn) from the EU and IMF back in May 2010, with the goal of restoring the country to private capital markets by 2013. Unfortunately, it became apparent that the country would remain closed to the private sector for much longer than initially anticipated, sparking the need for a second wave  of aid. The second package will provide an additional €109bn to Greece, in order to help it meet its financing needs over the coming years.

Similar concerns exist in Portugal, which recently received a bailout package of its own. Meanwhile, debt pressures are spreading to Spain and Italy, as economic leaders attempt to stem public concerns of a deteriorating economic environment in the region. A tumultuous several months have placed a great deal of stress on the Italian bond market. A series of political and economic scandals were exposed, which led to public scrutiny and personnel overhaul. This turmoil has increased uncertainty in the region, leading Italian bond yields to surge. The European Central Bank thereby responded by reactivating the Securities Market Programme, executing large volume purchases of Italian government bonds.

One of the main obstacles of the ECB in relieving these pressures is public opposition to the bailout packages. Many are concerned that the bailout package fails to provide a sufficient level of capital as a guarantee of payment by the borrowing countries. Alternatives to cash collateral are being discussed, with real estate being offered to assure that lenders will receive their money at some point in the future. Greece has already received its first round of aid, and details of a second wave are being discussed. The progress in these discussions is crucial to suppressing public concerns, mainly since it is believed that a third wave of support is likely necessary to successfully solve the issues in the long term. Markets are currently distressed more than usual, amid speculation that Italy may also need fiscal support in the near future.

Transatlantic infection
Since the beginning of 2011, the economic outlook in the US has endured a dramatic shift. Fundamental issues linger in the country, mainly pertaining to employment struggles, a stagnant housing market, and most recently debt concerns. The Fed has appropriately modified its interest rate outlook for the long term, claiming that rates will remain at near zero levels through at least mid-2013.

The large surge in US gross debt is causing concerns regarding the country’s fiscal sustainability. Standard and Poor’s has already downgraded US sovereign debt to AA+ and Moody’s has placed a negative outlook regarding the country’s economy. The extent of the US debt is far beyond a short-term fix. President Obama has introduced a budget proposal, which would induce a steady reduction in the budget deficit over the next decade, but even under revamped conditions the US gross debt ratio will still reach 116 percent of GDP. It goes without saying that growth is extremely important in an effort to maintain a general sense of fiscal sustainability.

Economic growth has slowed in the US, and its forecasts have become far more conservative for the remainder of 2011 and 2012. This situation has led politicians to make difficult decisions. Political leaders want to stimulate economic growth, yet at the same time preserve fiscal sustainability and restraint. As economic growth continues to slow, additional spending cuts must be implemented, in order to remain on course with the plan for a reduction in the budget deficit.

While the US maintains its efforts to reach debt sustainability, there are several scenarios that could impact their goals. A further drop in economic growth, a deviation from fiscal restraint, or higher interest rates, could all have a negative impact on the country’s debt outlook. The most likely scenario of the three is a lower growth rate. Therefore, the negative outlook placed on the US by Moody’s, Fitch, and S&P seems to make sense. In fact, the weaker-than-anticipated growth pattern could lead Moody’s and Fitch to also downgrade the US to AA+, while S&P may modify the rating to AA.

Current conditions are placing depreciative pressures on the dollar. There are myriad challenges which are likely to assist in this trend. Near-zero interest rates, a widening current account deficit, slower domestic growth, political risks, and the need for several fiscal adjustments are all factors contributing to the dollar’s decline. In addition, Fed chairman Ben Bernanke has recently stated his interest in stabilising the equity markets. It is believed that the Fed will introduce additional measures, in an attempt to stimulate economic activity and demand for riskier assets. Improving public sentiment would go a long way towards revitalising the stock market, and if the central bank is successful in achieving these goals, the dollar would surely depreciate substantially. Over the next 12 months, look for EUR/USD to drift upward of the 1.50 level, with risk assets and currencies, as well as commodities,  acting as the main beneficiaries of this trend.

The Fed’s claim that interest rates will remain near zero for the foreseeable future has already begun to depreciate the dollar. This trend is likely to continue against the majority of currencies. Recent underwhelming economic data has lowered sentiment, leading the central bank to continue to take action to revamp conditions in the country.

The Fed’s actions impact the values of many other currencies as well. It was projected that the yen would finally depreciate in the coming months, as a consequence of higher US interest rates – but the Fed’s intentions will stall this deprecation. Expectations for the yen to depreciate should be tempered, as the currency will retain most of its value until conditions begin to improve in the US and monetary policy changes occur.

Until recently, consensus analysis presumed a reacceleration in US and global growth for the second half of 2011 and into 2012. This positive outlook was formed as a result of fading concerns from several shocks to the economy that occurred in the first half of the year. These events included higher oil prices, which came as a result of political turmoil in the Middle East (specifically Libya), and the Japanese earthquake and tsunami, which sent equities and other risk assets in a downward spiral. Markets struggled for a considerable time to recover from these events, which should have led to faster growth and stability across the globe. However, leading indicators have failed to stabilise, and have slipped substantially over the course of the summer.

Expectations are for a continued deterioration in the coming months. According to Bloomberg, back in February the forecast for 2011 US growth was 3.2 percent. However, revised figures show that growth projections have been scaled back to 1.8 percent for the year. Since expectations are so low, it is highly unlikely that markets will be affected by these numbers in the future, since it would be difficult to surprise investors negatively. In fact, there is far more room for improvement, meaning that if there is an upward deviation from forecasts when the data is released, markets (particularly equities) could actually benefit from the relatively positive numbers.

The reluctant safe haven
In Switzerland, the Swiss National Bank intervened in the currency market on September 6, 2011, in an attempt to cap the strength of the CHF against the euro. Over the past several years, the Swiss Franc has appreciated against the euro steadily, as EUR/CHF fell from 1.6790 in November 2007 to 1.0067 in August 2011. The intervention in early September caused a swift reaction in the market, spiking the pair upward to reach a high of 1.2188 in a number of hours, before it settled around the 1.2065 level. The SNB has vowed to maintain the 1.2000 level as a base for the near future, by buying euros without limit until it feels market conditions will accommodate these price levels naturally. The SNB will surely find this task challenging, as investors continue to search for alternative investments as a safe haven during this time of global economic uncertainty. It is believed that the EUR/CHF rate will remain around the 1.2000 mark, without a strong push in either direction, until the central bank stops buying euros at such an alarming pace and volume.

The chaos in the financial markets in Switzerland was recently fuelled by the trading scandal at UBS Bank. The immediate reaction to news reports that the bank had lost $2.3bn due to unauthorised rogue trades was a sharp decline in its stock value. Investor confidence in UBS has been on the downside for some time now, and the bank had finally begun to restore stability prior to this event. Unfortunately, this latest news has impacted the bank tremendously, as all of its employees are now at risk of losing their yearly bonuses.

The glamour of gold
Amid the economic havoc that has plagued markets over the past few years, gold has posted significant gains, reaching a historic high of $1,921.15 per ounce on September 6, 2011. The consistency of the surging metal has not strayed since the beginning of the year. At time of writing it was trading around the $1,800 level, and many believe the momentum has yet to dissipate. The feeling remains that the drop of about $100 per ounce from that all-time high was simply a reaction to the overbuying of the metal. According to Bloomberg, the price of gold could decline to $1,700 per ounce in the coming weeks, although it is believed that price momentum will resume shortly thereafter, and the metal will approach and likely surpass the psychologically significant level of $2,000. Supporting this forecast is Ron William, a technical strategist at MIG Bank, who said that the spike of gold to its record high pushed it to “overbought” levels, and that gold could slip down to $1,670 by October. A Commerzbank AG analysis illustrates that if the metal dips as low as $1,650, it would reach a strong support level that could provide a boost as far as $2,000.

Eastern hopes
With considerable attention given to the struggles of the US and eurozone, many have insisted that China’s economy remains balanced and strong. However, the global economy is so complex and intertwined that it will eventually affect conditions in China as well. The IMF has reduced its China growth estimates for 2011 and 2012, revising the former down to 9.5 percent from 9.6 percent, while 2012 estimates were dropped from an initial consensus of 9.5 percent to 9.0 percent.

The IMF insisted that a stronger Yuan would dramatically help to stabilise the Chinese economy and successfully contain inflation. In addition, they said that in order to rebalance the global economy, it is pivotal that China promotes domestic demand, as a result of a decrease in demand across the world: “In countries with current-account surpluses and rising foreign-exchange reserves, a stronger exchange rate, combined with structural reforms, would raise domestic purchasing power and allow external rebalancing, while also containing inflation pressure.” With demand for Chinese exports declining across the world, domestic demand becomes extremely important to the stability of Chinese economic activity. China must restore strength to its currency, if it is to avoid a drop in its growth prospects.

Sterling stagnation
With events from Europe and the US attracting much of the public’s attention, the UK has managed to largely stay out of the economic headlines as of late. This is not to say that conditions are better: in fact, the escalating economic hardships in Europe could hinder UK growth prospects. The country fell into a recession around the spring of 2008, and although the situation has improved since, the country has been unable to completely recover. Growth slowed during the last quarter of 2010, with GDP dropping 0.5 percent; 2011 Q1 saw an increase of 0.5 percent, before slowing again to 0.2 percent in the second quarter.

Another factor stalling growth is the introduction of tax reforms. VAT rose to 20 percent this year, while additional modifications were implemented to national insurance and income taxes in April, which supported low-income individuals while hurting middle to high-income employees. The newly introduced tax burdens are impairing consumers’ ability to increase spending, thereby limiting the pace of growth in the country. Demand for goods and services has also been impaired by pay freezes, instituted by companies struggling to survive the current tumultuous economic conditions.

The underlying theme for individuals and companies alike is restoring order to their finances. Rather than continuing to spend in high volumes, more focus has been shifted toward decreasing debt levels. While this is a positive trend for long-term economic health, it is detrimental to the UK’s ability to improve growth. Inflation concerns are currently at an alarming level, and fears of stagnation are increasing as well. Stagnation takes place when growth slows considerably, while inflation remains high. This scenario presents a challenge to a central bank, since the decision becomes whether to raise interest rates to stem inflation, risking further deterioration of the growth rate.

A leader in innovative Islamic Banking

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BAJ commenced its business in 1976 – one of the few banks operating in Saudi Arabia at the time. In 1998, BAJ’s management took a strategic decision to convert its methods from conventional to Sharia-compliant banking. This change can be described as the most critical milestone in the history of BAJ; it was the first bank in the world to convert its operations and business to be in full compliance with the principles and rules of Islamic finance.

To ensure compliance with Sharia principles, BAJ underwent a complete restructuring process of its infrastructure, operational basics, service parameters, and human resources’ skills. A Sharia Advisory Board was established to include a number of distinguished scholars specialised in Islamic Banking.

BAJ succeeded in converting all its branches in 2002 to operate according to Sharia rules and principles. It then began to cultivate the results of its strategic conversion into Sharia-compliant banking and its service excellence approach, achieving progressive growth and a remarkable market image and presence. BAJ witnessed its full conversion into a Sharia-compliant financial institution in 2007 and simultaneously increased its capital to SAR 3bn ($800m), which came entirely from the bank’s profits.

BAJ’s core business segments are retail banking, corporate banking and treasury, while offering distinguished investment banking and Takaful protection and savings (Islamic life insurance) products and services. As of March 1 2011, BAJ’s market capitalisation was $1.2bn.

Upgrading distribution
BAJ proved itself to be a leading Sharia compliant bank through its fast growth in deposits, its expanding branch network, and an ROAEand ROAA of 16.3 percent and 3.7 percent  respectively over 2006-10. It is strongly positioned in the mortgage market, holding a 5.1 percent market share in 2010 – up from a 1.7 percent  share in 2009. The bank has a growing focus on retail business, complemented by a rapidly expanding branch network: from 24 branches in 2007 to 52 in 2011. It has also significantly upgraded its delivery channels, and now offers online and telephone banking, credit cards, and an ATM network.

BAJ also has demonstrated impressive growth, achieving 75 percent growth over the last three years, 153 percent over five years, and 673 percent in 10 years, while widening the customer base and launching new products and services in response to customer and market needs. The bank has been working hard to establish branches in key areas in Saudi Arabia to ensure provision of a nationwide distribution platform. In part testament to this, customer deposits increased 23 percent in 2010.

The bank runs a prudent risk management and diversified business model – evidenced by a strong credit rating of A- stable from Fitch, and one of the lowest leverage ratios in the industry, with a robust capital adequacy ratio of 15.7 percent and a tier 1 capital ratio of 15.1 percent (five year average CAR: 26 percent).

A growing nation
BAJ is well positioned to grow on the back of the strong Saudi economy. The country has a GDP of $434bn and a low debt-to-GDP ratio of 10 percent; it owns the largest oil reserves in the world; and it has a young population delivering demographic dividend and augmenting growth in banking services. Saudi Arabia is also engaged in a four-year infrastructure spending programme of around $373bn, with the effect of spurring economic growth.

In promoting its image as a multi-specialist Sharia-compliant financial group, BAJ has been able to effectively communicate its new market positioning and comprehensive range of products and services. Among these is BAJ’s Mortgage Finance Programme: distinctive among other competitive programmes by the speed and efficiency with which applications are processed, giving BAJ a distinct market edge. To better serve corporate customers, BAJ has established corporate regional offices in Riyadh, Jeddah, and Dammam, to provide a one-stop service with a dedicated team of experts and a full suite of products. Cash management and trade finance are newly established areas within the bank’s corporate business department, achieving remarkable success.

Aljazira Capital Company (AJC), the investment arm of BAJ, has continued to strengthen its brokerage offerings through the introduction of other tradable securities, enhancing its award-winning TadawulCom platform to offer online trading across multiple regional and international markets. AJC also reinstated its sell-side research capacity by introducing a best-of-breed array of economic, technical, company, and sector reports. AJC has maintained its market leadership position in the Saudi share trading market over the last seven years.

BAJ was the first banking institution in Saudi Arabia to introduce Takaful Ta’awuni (TT) in 2002 as a fully fledged Sharia-compliant alternative solution to conventional life insurance. Since then, TT proved itself as a market leader and has been growing fast to satisfy clients’ needs. TT underwent dynamic improvements in infrastructure, offerings, and resources. In 2009, TT was awarded the “Life Insurer of the Year” award by Middle East Insurance (Insurex) for the third consecutive year, adding to the great number of honours the organisation has been awarded by various international and local bodies.

People power
BAJ has invested heavily in its human capital, and so this vital resource’s potential has been growing alongside the dynamic development of the bank’s offerings, channels and infrastructure. BAJ is proud of having developed a world-class HR management style, characterised by a well-set performance development and review system, key performance indicators, a motivation programme, and structured, specialised training programmes. BAJ has been maintaining an efficient working environment with long-term recruitment and retention programmes.

In 2006, BAJ launched its programme “Khair Aljazira Le Ahl Aljazira” with a huge fund in support of BAJ’s social responsibility towards the community. Since then, BAJ has been implementing a range of activities designed to support the community. The bank has been providing financial assistance to various charitable societies, launching apprenticeship programmes to train young Saudi men and women, and sponsoring programmes to train the handicapped, blind and deaf. Through many programmes, BAJ successfully promoted family welfare by sponsoring a huge number of productive family projects and cultural events.

Banking in India and Bangladesh gets competitive

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Just as finance and banking is undergoing changes in many areas of the world, the range of banks and banking services offered in India and Bangladesh is also adapting to meet the needs of consumers today. Along with more traditional banks, such as Andhra Bank, which has been in business since 1923 and the Bangladesh Bank, which serves as the central bank of Bangladesh, financial institutions based in other nations have also carved out a significant presence, such as Bank of America and Deutsche Bank. The great thing about this increased range of choices is that consumers are now able to enjoy access to features that were either limited or not even offered as recently as a decade ago.

Domestic banks continue to provide the widest coverage in various parts of Bangladesh and India. Two banks in particular, ICICI Bank and the Bank of India are major players within those markets. While ICICI has far fewer branches than the older and more established Bank of India, the institution has made inroads into a number of banking services and has quickly become a power to be reckoned with since its inception in 1994. Much of the growth has to do with not only expansion within India, but also the establishment of branches in a number of countries around the world.

Internationally based banks have also been allowed into India and Bangladesh and have provided competition for the established institutions. The Bank of America, along with Deutsche Bank, are two prime examples.

Demonstrating an ability to adapt to the culture and banking laws necessary to ensure operations, these banks have been able to capture attention owing to their ability to provide international services that some of the domestic banks are just beginning to offer.

All this competition among banks with a presence in India and Bangladesh has meant that some institutions have stepped up efforts to provide a wider range of financial services to consumers. Some of these relate to enhancing core services, such as current accounts, savings and investment accounts. Still others provide insurance protection for qualifying customers. Just about all of the banks have invested a great deal of time and money into creating reliable online banking access to customer accounts, even to the extent of developing proprietary software that can be used on just about any type of internet connected device. Such innovations serve to not only provide a means of competing in India and Bangladesh, but also make it easier to offer features to customers in other parts of the world that may not be readily available in those locations. The end result is that bank customers have instant access to their account information any time and from just about anywhere in the world.

The rate of expansion of both physical and virtual access to bank locations has meant that there is a constant shift regarding which banks constitute the top players in India and Bangladesh, with institutions like the Bank of India, Punjab National Bank and ICICI outpacing each other on a regular basis. As ever more banks vie for customers, there is no doubt that consumers can look forward to additional service options, possibly lower pricing on some services and increased access to those services around the clock.

A half century of excellence

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Commercial Bank of Kuwait is one of the largest financial institutions in the country, with a strong and growing corporate and retail banking franchise, providing innovative financial and investment solutions to its ever-growing retail and corporate customers.

On June 19 1960, the Amir of Kuwait Sheikh Abdullah Al-Salem Al-Sabah issued Amiri Decree No. 5, establishing a shareholding company under the name of Commercial Bank of Kuwait, now the second-oldest financial institution in Kuwait.

Since its creation, the bank has pioneered the sector. In 1962, Commercial Bank of Kuwait opened a branch in Kuwait International Airport, operating 24 hours a day. It was the first bank to open a branch in such a vital location – the first of many strides the bank would take to prove itself a leading financial institution.

In 1973, in yet another trend-setting move, the bank’s board of directors decided to introduce computer technology in all the bank’s activities, with the objective of developing and improving its banking business and wide spectrum of product and service offerings. In 1976, the bank established a training centre for the purpose of qualifying the employees from all of the bank’s divisions and departments, and equipping them with up-to-date systems and technologies applicable worldwide.

In the 1980s, Commercial Bank of Kuwait was the first bank to introduce ATMs in Kuwait and the first bank in the Gulf region to introduce a fully automated Letter of Guarantee system. In the 1990s, the bank introduced the first automated election management system in the Middle East, and used it successfully during the election of its board of directors, yet another feather in the company’s cap. And in 2001, Commercial Bank of Kuwait was the first bank in the Middle East to launch Visa Infinite, and took the lead in introducing its Advance Interest Deposit account: the first account to pay interest up-front.

A glorious present
Today, Commercial Bank of Kuwait has evolved into a large financial institution with interests from retail banking to mega-project finance; mobilising its substantial capital base and decades of expertise to assume a leadership role in the Kuwaiti economy. The bank has emerged as a lead financier in the country, arranging a flow of loans to diverse schemes such as power, construction and notable infrastructure projects.

In June 2010 the bank celebrated its 50th anniversary, marking a golden era of Commercial Bank of Kuwait. Throughout its lifespan, the bank has operated on the principle of maximising shareholder value by demonstrating excellence in leadership, innovation, commitment and corporate citizenship.

For the sake of greater customer convenience, the bank endeavours to improve and enhance its product offerings to become the premier provider of banking services to its large customer base, developing a creative and entrepreneurial team that generates superior shareholder value and supports community service.
The bank is committed to demonstrating a pro-active, productive, and transparent management style, where special focus is given to performance excellence, while constantly maintaining an exceptional degree of personal and corporate ethics.

Innovative products and services
Integrated through the domestic branch network, Commercial Bank of Kuwait offers its valued customers a wide spectrum of sophisticated and personalised banking services which best suit its customer segments and satisfies their banking, financial and investment needs. Additionally, the bank’s remote and online delivery channels use the latest electronic technologies to bring unrivalled banking services to its customers’ fingertips via its website, telephone, mobile, internet and ATMs.

With marketing campaigns aimed at direct and swift communication with its customers, Commercial Bank of Kuwait has launched official accounts on Facebook, Twitter and YouTube to expand its web presence with customers through social network websites. This has proved to be highly successful in communicating with diverse sections of Kuwaiti society and with the bank’s customers in particular. It has also helped the bank enhance its services to meet and achieve its customers’ aspirations and satisfy their needs.

The bank’s retail banking division offers numerous saving accounts, checking accounts, term deposits, on demand accounts, Commercial Bank of Kuwait credit cards, loans, remittances, salary transfer accounts, bancassurance, safe deposit lockers and many other promotions to benefit its customers.

The corporate credit team offers a complete range of facilities to local and international companies to suit their specific needs. This is achieved through highly qualified and experienced staff possessing the capability to study the customers’ needs and provide sophisticated financial advisory services in various economic sectors. The goal of the corporate credit division is to offer state-of-the-art services expeditiously and professionally, to enhance the bank’s business relationship with its clients.

Commercial Bank of Kuwait’s treasury division manages the bank’s balance sheet and related interest and forex exposures as well as cashflows. Treasury is manned by highly experienced and skilled dealers and actively trades in foreign exchange and money market products, backed by a sophisticated infrastructure. Treasury provides advisory services to its valued clients as well as solutions in foreign exchange, fixed income and money market products.

With an extensive diversified international portfolio and highly experienced personnel, Commercial Bank of Kuwait is always active in international financial markets, including syndications, refinancing under LCs, project financings and other lending activities. The bank maintains a well distributed global correspondent banking relationship base and is a reliable partner for its customers in Kuwait and the Middle East.

Trade finance service is a highly technical area requiring specialised personnel to cater for customers’ ever-changing needs. As such, and out of its strong belief that customers’ needs are of paramount importance, Commercial Bank of Kuwait has assigned professional, experienced and qualified personnel to assist and provide the best services to its customers.

A wide variety and range of facilities in trade services, such as import letters of credit, issuing delivery orders and shipping guarantees are also available to customers who wish to receive a professional and efficient service.

Corporate Social Responsibility  
Corporate social responsibility is one of the bank’s priorities, and it adopts a balanced policy by devoting its resources to serve the community in which it operates. This is clearly demonstrated through the bank’s generous donations and support of societal activities such as charitable campaigns, educational programmes and humanitarian events.

Commercial Bank of Kuwait endeavours to maintain Kuwaiti heritage by commissioning original prints depicting Kuwaiti traditions for its scenic annual calendars. As a socially responsible bank, Commercial Bank of Kuwait endeavours to be at the heart of all community-related activities and events, with a particular emphasis on those that benefit the physically challenged, and other humanitarian activities that accentuate the bank’s strong interaction with society.

Established subsidiaries
Alongside its main operations, Commercial Bank of Kuwait has a number of subsidiaries dealing with specialist financial areas. CBK Capital is a fully owned subsidiary of the bank responsible for managing the diversified investment portfolio of the bank. CBK Capital’s highly qualified and professional staff have in-depth investment knowledge and experience to manage these investments. All investment activities are carried out under the investment guidelines of Central Bank of Kuwait.

In addition to managing the bank’s investment portfolio, CBK Capital is very active in the area of fund management. Over the years, Tijari Funds have delivered good returns to investors. These funds cover a wide range of market sectors. All the funds are open for institutional investors, Kuwaitis and expatriates.

USBC is an 80 percent-owned subsidiary acquired in 2008 with the objective of strengthening the bank’s brokerage activities and product offerings in the local market, in addition to providing more distinctive and unique services for the bank’s clients. USBC provides securities trading on the Kuwaiti and Egyptian stock exchanges. USBC’s market share of KSE trading has grown from seven percent on acquisition to 11 percent presently.

In 2006, the bank was a founding shareholder in Al Cham Bank, the first private bank incorporated in the Republic of Syria to be engaged in Islamic banking activities. The bank has increased its initial 10 percent holding to 32 percent, and provides board and management services. Al Cham Bank provides a full range of retail and corporate banking products and services that comply with Islamic Sharia principles.

A bright future  
Whether it is the Al Najma account, the biggest daily prize in Kuwait, or Al Tijari state-of-the-art corporate and retail product offerings which cater for all customers’ needs, Commercial Bank of Kuwait has just the right product for its wide customer base. Recognised as a leading financial institution for more than 50 years, Commercial Bank of Kuwait is committed to offering specially tailored services and products that meet the ever-changing requirements of its retail and corporate customers.

In its long march of achievements, despite all the challenges the bank has faced, Commercial Bank of Kuwait stands tall as one of the largest financial institution in the country. Its march continues with a renewed commitment to produce significant results that build solid foundations, envision new directions, preserve its rich heritage and lead it to a promising future. Commercial Bank of Kuwait is a star leading the way, today and always.

For more information www.cbk-online.com

GMexico – more than the copper it produces

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It is said that all companies are wrapped in a context that either benefits or prejudices them, and many are sensitive to changes in policy, currency, climate and the economy. Although  variances in copper prices are an important catalyst for the company, this does not mark its path. Since the 2008 crisis, copper prices have quadrupled while Grupo Mexico’s (GMexico) sales have increased almost fourteenfold – so although there is a direct connection with copper prices, Grupo Mexico is more than the copper it produces.

GMexico is a holding company listed on the Mexican Stock Exchange (ticker symbol GMEXICOB) operating primarily in the mining industry, freight, the multimodal railroad service industry, and the infrastructure sector.
The company is the world’s sixth-largest integrated copper producer. It also produces molybdenum, silver, zinc, lead, gold and sulphuric acid. GMexico also operates Mexico’s largest railroad system.

With a market capitalisation of $25bn, GMexico is the second most traded share on the Mexican Stock Exchange and third in terms of market value.

The Mining Division, through Southern Copper Corporation (listed on the NYSE: SCCO) and Asarco Company, has operations in Mexico, Peru, and the United States. It holds the world’s largest copper reserves.
GMexico’s Transportation Division is represented by Ferromex and Ferrosur (covering approximately 84 percent of the country) and Ferrosur, which together form the largest railroad company with the most extensive coverage in Mexico, connecting to five border points with the United States, four ports on the Pacific Coast, and two ports on the Gulf of Mexico.

The Infrastructure Division, which has extensive experience in the construction of dams, tunneling, hydroelectric plants, roads, highways, industrial plants, and exploration drilling, is strategically positioned to execute on infrastructure growth opportunities in Latin America.

GMexico growth potential
Taking an aggressive approach in terms of expansion, GMexico aims to double its copper output in the next five years to one million tons, increase the market penetration of its railroads from 19 to 25 percent in the next five years, and increase its infrastructure projects. 

CSR and sustainable development
Social responsibility and sustainable development are a fundamental part of the company and represent an integral part of the decision making process to create value in its operations. GMexico is seeking to guarantee a more responsible operation in terms of social, economic, and environmental issues. Attaining sustainability in terms of the environment, health, and overall well-being of its employees and its neighbour communities is a strategic objective. The company understands sustainable development as “meeting the needs of today without compromising the needs of tomorrow.”

73 percent of all water is reclaimed water
1.4 million trees are planted every year
30 percent improvement in fuel efficiency
10 Clean Industry certifications.  

For more information email:
Ir@mm.gmexico.com; www.gmexico.com

Pemex enters new stage of growth

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Pemex is a public company that is continuing to grow strongly after 73 years of operation. It is recognised worldwide as one of the top four crude oil producing companies, ninth in natural gas extraction and 11th for value of sales.

In the past five years, Pemex has had one of the highest yields in the petroleum industry worldwide. Its operating income in 2010 was over $44bn, 27 percent more than last year.

Pemex is the first company in Mexico and a key contributor to the public purse. In the last five years it has provided approximately $250bn to the nation’s development.

Currently, Pemex is ready for a new stage of growth. After a series of efforts to halt the fall in oil production caused by the expected natural decline of Cantarell supergiant oil field in the Gulf of Mexico, it has manage to stabilise oil production at around 2.55 million bbl/d and has laid the foundation and the production rate to increase its production to more than three million bbl/d by 2016.

Over the past two years, Pemex has concentrated its efforts on stabilising the Cantarell production and on increasing the production of its other assets. These tasks have been successful because, to date, Pemex has a more diversified portfolio of oil fields; without considering the effect of production at Cantarell, the production growth exceeds that of most oil producing countries in the world. The five-year compound annual growth rate of Pemex production, excluding Cantarell, was nine percent: equal to an increase of 720,000 bbl/d.

Exploratory future
Cantarell field dependence has declined significantly. In 2004, this asset accounted for more than 63 percent of total production; today it contributes only 20 percent.

The future of Pemex is based on its exploratory capacity, an adequate reserve replacement, and on efficient hydrocarbon processing. Mexico’s 3P (proved, probable and possible) reserves represent more than 30 years of production at current rates.

The replacement rate of proved reserves has been increasing steadily: from 23 percent in 2004 to 86 percent in 2010. This situation places Pemex on the path to meet the goal of its business plan, which is to achieve a reserve incorporation of 100 percent for next year.

In this regard, the challenge is to increase the pace and efficiency in the exploration, production and processing of the extraordinary oil legacy that Mexico has, within a framework of efficiency and respect to the environment.

Likewise, Pemex is focusing on processing crude oil in a more efficient manner, and improving the logistics and distribution of natural gas, oil and petrochemicals. In order to do so, it has strengthened its planning, management and decision-making processes.

Legislative support
The Energy Reform of 2008, passed by the Congress of Mexico, provided Pemex with new elements to improve its performance. Particularly, the comprehensive contracts for exploration and production will help the company accelerate its pace of activity.

But last August, the first round of bids for these contracts – for the exploration and production of mature fields in the southern region – was a failure, despite awaking interest from 27 national and foreign industries, which purchased more than 50 bidding packages.

These contracts seek to expand and strengthen the operations of its subsidiary, Pemex Exploration and Production (PEP), through a competitive model, and to expand its operational flexibility and execution ability, by implementing new technology into its processes, which will result in greater efficiency and in an increase in gas and oil production.

The first mature fields that were bidded, Magallanes, Sanctuary and Carrizo, covered a total area of 312sq km with an oil reserve of 207 million boe. Its current production is about 15,000 bbl/d and it is estimated that it will increase to 55,000 bbl/d with the new comprehensive contracts.

At the same time, the General Director of Pemex, Juan Jose Suarez Coppel, presented the Demand Forecast of Goods and Services 2011-15, which is a tool aligned to the institution’s transparency efforts. This will enable it to strengthen its role as one of key drivers of Mexico’s development.

Responsible energy
Pemex is at the threshold of a new expansion phase, thanks to the tremendous growth seen recently following its investment programme. With over MXN 300bn in capital spending and purchases of goods and services totalling MXN 100bn annually, the company is an important mechanism for the industry’s development.
According to its business plan, and based on the key elements for sustainable development of the company, Pemex has focused all the components of its corporate responsibility on actions that allow for a safe, reliable, cost-profitable and sustainable organisation.

As a complement to the direct incorporation of corporate responsibility, in 2008 Pemex formed a Citizen Participation Group, through which it seeks to gather the opinions of members of society to help improve its performance in social and environmental responsibility.

Thus, Pemex reaffirms its commitment to maintaining a safe operation as a necessary and indispensable condition for achieving the reliability of the facilities, business profitability, sustainability of activities and the protection of communities and ecosystems in which it operates. This effort has been achieved through the consolidation of the Safety, Health and Environmental Protection System.

As a result of this, in 2010 the company maintained for the second consecutive year an accident frequency rate of 0.42 injuries per one million man-hours worked; the lowest level in its history and below the global average of 0.5.

It also improved its environmental performance trend, reducing by 22 percent its air pollutant emissions, by 0.5 percent its hard water use, by 21 percent its hazardous waste inventory and by four percent its inventory of environmental liabilities.

The company received 148 Clean Industry Certificates, out of which 39 were awarded for the first time to facilities and 109 were endorsed as a result of maintaining and improving environmental performance, and it continued its commitment against the climate change effects by reducing the emission of 4.8 million tons of carbon dioxide, equivalent to discontinuing the use of one million cars, as a result of carrying out the direct mitigation of gas flaring, energy efficiency and cogeneration.

Driving mexico
In order to ensure that Pemex remains an important part of the nation’s development, in 2010 the company approved its business plan, which detailed the strategies through which it would seek to transform itself to be recognised as a safe, efficient, profitable, modern, transparent and sustainable company.

With this plan what is being sought is to maximise the economic value of the company in a sustainable way, based on four lines of action – growth, efficiency, corporate responsibility and management modernisation – each with a number of specific strategies.

At the same time, due to the fact that the oil industry requires using and developing technology in an intense manner, a Technologic Strategic Plan was designed to facilitate the achievement of the goals outlined in the business plan.

In short, what Pemex is seeking is to align its work with the creation of economic value for the benefit of Mexican society, under social and environmental responsibility criteria, strengthening energy security and playing an important role in the country’s economic growth.

Class I telecoms licence confirmed for Samatel

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Samatel has offered mobile services in Oman since August 2010, when it was awarded a Class II licence enabling it as a mobile virtual network operator (MVNO). The new Class I licence will additionally allow the provision of international voice services and requires the deployment of a physical retail traffic origination and wholesale traffic aggregation infrastructure.

“Samatel has become the third fully fledged licensed operator within a short span of six months after its launch as an MVNO in the Sultanate in August 2010 and we promise to provide Omanis with the highest quality services and industry leading customer service,” said Sheikh Khalid Al-Mataani, Chairman of Samatel.

“We will be introducing a number of industry-first products and will provide our customers with many convenient options of communication. We are committed to our brand promise of giving a life of happiness to our customers. We want to make it easy for customers to get what they want, when they want it,” he said.
The company is fully funded by private Omani investors and has signed a major contract with Verscom – a leading developer of next-generation network and service infrastructure solutions – to supply next-generation IP and voice network gears and to provide managed services and strategic consultancy services.

“We are currently installing our fully fledged network in and around the Sultanate and expect to launch other services by the third quarter of this year,” said Dr Wael Taher, Samatel’s CEO.

 Infrastructure upgrade for Oman
In addition to offering international voice services to consumer and enterprise segments in Oman, Samatel will operate as an international gateway operator to aggregate inbound and outbound wholesale voice traffic for Oman. As the company’s exclusive strategic partner, Verscom Solutions will be responsible for the supply and deployment of next-generation Class 4 core in Oman TDM / packet-voice interconnect POPs in Europe, equipping Samatel with national and international TDM / IP voice peering facilities and enabling it to interconnect with Omani network operators as well as international wholesale operators. International voice service offerings for the retail market will be enabled on Verscom’s SIP-based service delivery platform. The supply of OSS / BSS platforms such as convergent billing, CRM, interconnect billing/routing are also among the responsibilities of Verscom.

“The hard work, dedication and attention to detail we have invested in Samatel means we can invite our customers to experience ‘a life of happiness’ – a mobile service unequalled anywhere in the region,” said Taher. “Samatel is delivering the mobile services customers demand, coupled with high-quality customer experience and at prices virtually unheard of in the Sultanate until now. Our competitive rates are designed to deliver savings on both national and international calls.”

“To us, simplicity and transparency are fundamental,” said Dr Wael. “Mobile service plans are often complicated or subject to ‘fine print’ which make unpleasant surprises unavoidable. We want to make it easy for our customers to understand the specific prices in the plans they have selected, and to be comfortable that they get what they pay for.”

“At Samatel, we strongly believe that real business success is not just about profits measured in numbers but also, as importantly, about how those numbers are achieved,” said Sheikh Al-Mataani. “Our corporate strategy reflects our commitment to sustainable business practices and balancing responsibility alongside growth and productivity. We are working not only for the success of our company but for the success of our nation.”

Samatel believes it will contribute to the progress of the telecom environment in Oman by capitalising on the latest technology infrastructure and introducing a new approach to international termination services, which will eventually grow the total size of the market and transform the telecom landscape in Oman.

The company will also contribute to Oman’s telecoms economy and productivity by decreasing the costs incurred by the country’s existing legacy-based international voice interconnect infrastructure – helping reduce the costs of international calling for all of Oman.

Sama subsidiaries
The Samatel group includes the companies Sama Contact Centre, Samatech and Sama Training Centre.

The Sama Contact Centre is a global provider of quality, multi-lingual business process outsourcing services.

The core objective of the company is to deliver superior quality and value to its clients throughout the client relationship lifecycle, with the goal of becoming the leading provider of offshore call centre services in the GCC. The Sama Contact Centre offers a wide range of 24/7 services – such as offshore handling of customer enquiries, technical helpdesk data management, cross/up selling – that suit diverse customer needs at a cost-effective price.

The company is committed to attracting, hiring and retaining Omani talent, giving young talented Omanis the opportunity to grow and advance in their careers in a people-oriented environment and performance-driven culture. The company provides technology-based training and supports creativity and innovation in order to create a learning organisation and deliver services and products of the highest standards.

Additionally, the company offers a diverse and multicultural work environment where all are treated equally and advancement is based strictly on performance.

Samatech is a global technology consulting service and outsourcing company, working with manufacturers of infrastructure products and middleware products. By combining unparalleled experience and comprehensive capabilities across all industries and business functions with extensive training programmes and world-class service, it can deploy to integrate technologies into fully operational systems. The company is locally owned and staffed by experts in leveraging today’s technology, tools and proven practices, to streamline their clients’ processes and help maximise profit.

The company collaborates with its clients to enable cost-effective business solutions by helping them design, implement and manage the complete technology requirements. Their solutions and services are complete at each and every layer and are enhanced by professional services, managed services, consultancy and multi-vendor support. Samatech’s approach is to be flexible in understanding the client’s requirements and services by providing best-in-class technology solutions.

The Sama Training Centre is a key part of Samatel Group’s CSR activities: it works with local people with disabilities and special needs, and trains them in sales, marketing and call centre skills. The purpose behind these activities is to ensure that those with special needs have unhindered access to education, training, and suitable communication services that will help them integrate into society.

After training 200 Omanis with special needs and in association with the Omani Ministry of Manpower, Samatel will be erecting 100 kiosks across the country, through which the graduated trainees can sell Samatel products. The centre hopes to open a further 200 kiosks in the years after the initial roll-out. With the opening of the Sama Training Centre, Samatel is the only telecoms operator in the country to provide such training and jobs to disabled people.

“As a group we remain committed to corporate and social responsibility,” said Sheikh Al-Mataani. “In all of our actions we strive to ensure that all economic, environmental and social factors are considered. We believe that this approach, driven by our principles of integrity, respect, professionalism, innovation and commitment, makes us more responsible and informed as a company.”

“We are totally committed to our CSR programmes and we look forward to having the opportunity to spread more happiness to those who truly need and deserve it,” Dr Taher said. “We take time to make a real difference in people’s lives so what benefits they gain from Samatel are long lasting and not just for a day or two.”

For more information: www.samatel.om

Prioritising sustainability

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Türk Telekom is the incumbent fixed line operator in Turkey; how do you differentiate yourself in the market?
At Türk Telekom, we position ourselves as the leading communication and convergence technologies company. We strive to lead the market with the value we create for our customers, and also invest in innovative products and services for them. We put our customers at the centre of all our strategies. We thus maintain their loyalty and their satisfaction, which is the main driver in our investments and innovations for our customers. This is also how we differentiate ourselves, and what we have in mind while innovating.

In fixed voice, we developed the ‘No Place Like Home’ concept, which combines advantageous tariffs with value-added services like health and home insurance, and home security. This allowed us to complement voice with value-added services and to form a platform where we could generate more value for our customers. We pursue the same strategy for corporate customers to offer them with advantageous voice tariffs. We are also working hard on fixed data for innovative data products to grow the market and taking steps towards innovative cloud services for different segments.

We focus on enabling our customers to collaborate, communicate, and access information or media on any device in a cost-effective manner – in order to help them manage and engage in personal, social and business life anywhere. Convergence constitutes the main part of Türk Telekom’s strategy. We believe convergent bundles including fixed voice, mobile voice, broadband and other services will make Türk Telekom stronger. We support this process with the necessary investments, which have already started to bear fruit, such as developing value-creating technologies products.

We see the future in convergence technologies, which make life easier, support social development and contribute to quality of life. This is also our motivation for concentrating on convergence technologies and taking the lead in this field. Innovative technologies and applications, especially convergence technologies, provide operators with many opportunities to offer their customers value-added services.

We believe one of our key assets in creating value for customers is our quality staff, who work in 81 provinces across the country. Improving and supporting our employees has been a major investment area for us with Türk Telekom Academy, which we founded to train them. Having recently been pronounced a centre of excellence by International Telecom Union, Türk Telekom Academy now engages in region-wide training programmes as well.

How are you transforming your business processes according to sustainability principals?
Acting on economic, social and environmental responsibility as a good corporate citizen, our goal is to create value for society in the same way we create value with our products and services. Sustainability is adopted in all business processes at Türk Telekom as part of company policy.

We implement sustainability in everything – from the way we conduct our business to the quality of our products. While fulfilling our responsibilities to the community and the future, we also create value for our customers and business partners. We’re committed to including our 25,000 employees in 81 provinces in this process.

We view sustainability not as a task that we are ‘obligated’ to carry out; on the contrary, we deem it a company policy, which should be shared by each of our 25,000 employees as a team with common responsibility and enthusiasm. This transformation in our business processes in line with sustainability principles provides an important opportunity for the perception of Türk Telekom’s identity.

The latest step in our sustainability process is the measurement of our Carbon Footprint. We became the first telecommunication company in Turkey that measured and reported its carbon emissions to the Carbon Disclosure Project. The Carbon Disclosure Project aims to inform corporate investors about the greenhouse gas emission amounts and risk management policies on climate change of publicly listed companies all around the world.

Türk Telekom stands out in Turkey for its increasing brand value: for the third time in a row you were selected as the company with the most valuable brand portfolio. What have you done in recent years to increase your brand value?
As a result of our efforts, for the last three years we have succeeded in coming out on top of the “Turkey’s Most Valuable Brands” survey organised by Brand Finance, the leading brand valuation company.

We believe that the brand value achieved by Turkey’s leading communication and convergence technologies company Türk Telekom underlies its investments in innovation, R&D, and new technologies, as well as value-added products and services focusing on customer satisfaction. In a vast range that extends from the value-added products we offer to our customers in the field of convergence and communication to the nationwide social responsibility projects, we ensure that the Türk Telekom brand achieves sustainable growth. These activities also contribute in our brand value growth.

Our service approach, based on adding value to the lives of our customers and continuously developing our quality, also contributes significantly in the strengthening of our brand value.