A bonus edit from our interview with Dr Ebenezer Onyeagwu, Group Managing Director and CEO of Nigeria’s Zenith Bank. What are the challenges that face recently inaugurated President Tinubu? What’s Zenith’s view on the fast-growing tech hub in Lagos? And how should international investors approach Nigeria?
World Finance: I’m back with Zenith Bank’s Dr Ebenezer Onyeagwu to discuss Nigeria’s current economic landscape, starting with recently inaugurated President Tinubu, who faces a whole host of challenges?
Dr Ebenezer Onyeagwu:Yes, the president duly acknowledged the challenges of the economy. A few of them I may mention will be the issue of the multiple exchange rates, the issue of the fuel subsidy, the issue of inadequate power supply, high inflationary environment leading to high costs of doing business.
He also communicated his determination to deal with these challenges head on. And I will say even in the early days, he’s been bold and audacious to take some decisions – unifying the exchange rate, and also stopping the fuel subsidy. These are painful decisions, but what I think the president has just done is say, look: Nigerians, we find ourselves in a hole. Let’s stop digging.
But above all he requires the cooperation of all, all the stakeholders, to succeed. It’s about every one of us collectively working to solve, supporting the government. We have to have some discipline, it’s a question of saying, it’s going to get a bit tough and rough before it starts getting better.
World Finance: Now Lagos has been positioning itself as a fast-growing tech hub; what’s your view on this emerging industry?
Dr Ebenezer Onyeagwu:Lagos is the commercial nerve centre of the country, so you see about 80-90 percent of the tech entrepreneurs are out of Lagos, and there are well over 200 tech companies that are coming up, looking at several segments of the economy and developing very interesting and exciting digital products to deal with such human endeavours.
And we at Zenith are at the forefront of encouraging this upcoming digital economy. Since 2019 we started having the annual tech fair, and what we do is we provide opportunity for upcoming tech entrepreneurs to showcase their products.
We also organise a hackathon, where at the end we give cash prizes and we also put the finalists into an incubation programme to commercialise their ideas.
So tech is something that we are monitoring closely, and we expect to be the main driver and advocate for that.
World Finance: And what other industries are showing strong growth?
Dr Ebenezer Onyeagwu:The non-oil export, that cuts across different sectors. We also have the gas business. We have agriculture – you fly around the country, you see farming in Nigeria is largely subsistency. We need to mechanise it! Nigeria has the potential of becoming the organic food basket of the world.
Of course FMCG, by virtue of the size of the economy, remains a very very viable sector.
World Finance: Finally, for international investors looking at Nigeria’s growth potential, what are the most important things for them to know?
Dr Ebenezer Onyeagwu:The first thing I always tell them is, don’t come in to Nigeria at lunchtime and expect to go back at dinner time. When you come in, just stay for the long haul.
We go through cycles, but, you know, we hardly have huge bubbles and busts. So anybody coming into Nigeria, have a view of being long in Nigeria. When you are short in Nigeria, it’s no good for anybody, it creates unnecessary volatility.
Zenith is a valuable to partner with investors, so we look forward to welcoming them and helping them to navigate. Ease of doing business is being improved upon. Labour is readily available. If you need funding Zenith will be there to provide funding for you. So we would like to welcome investors and say that, know your area of preference but Nigeria is a huge opportunity. I see it like the treasure pot of Africa.
In Nigeria, small and medium enterprises contribute 48 percent to GDP, and account for 80 percent of employment and self-employment – and Zenith Bank, the leading non-oil export bank in the country, is very deliberate in its support for those businesses. Group Managing Director and CEO Dr Ebenezer Onyeagwu discusses the many support programmes Zenith offers SMEs – from getting them off the ground with IT offerings and training workshops, to growing into a thriving export business.
World Finance: Ebenezer, how does Zenith support SMEs?
Dr Ebenezer Onyeagwu:We are very deliberate in terms of our support for SMEs. We developed a product that we call SME Grow My Business to provide opportunities for them to leverage on our digital licences that we have with the major OEMs and IT companies, to expose their products digitally.
We also have SME Hustle Academy, targeted at teaching SMEs on specific digital applications and knowledge that they require to run their business.
We also have the monthly SME Training Series, where we focus on the key problems and challenges that face SMEs.
We also provide loans for SMEs at discounted interest rates, and to enable us to address women in business we created Z-Woman, which gives loans at subsidised rates to women.
In the export space we created another product we call From Zero To Hero – it provides opportunities for SMEs who have never done export before to be exposed to the rudiments of doing export business. Starting from how to source the export products, how to do the documentation for export, and also helping them to develop export markets abroad and financing.
World Finance: Of course it’s not just about supporting businesses; in order to completely unlock Nigeria’s economic potential, you need to bring the whole population into the banking system.
Dr Ebenezer Onyeagwu:Yes, that’s very important. We do that under the financial inclusion agenda, through collaboration with the central bank. We have our financial literacy campaign, where we engage different sectors of the society, the underserved and the unbanked.
We also have youth engagement where we go to schools and secondary schools, creating awareness on the use of banking products and services.
We have a product for schoolchildren – Zenith Children Education account. We also have another product for those teenagers at university, we call it Zenith Aspire account. So we engage all of them to learn financial literacy, the rudiments of investment, and in our own way we think the advocacy is paying off.
World Finance: Finally, what do you see as Nigeria’s economic potential? And what role should Zenith play in unlocking it?
Dr Ebenezer Onyeagwu:So Nigeria is a huge market. Whichever sector you look at – are you talking about the gas reserves that we have untapped? Are you talking about agriculture? Manufacturing? Non-oil exports? Every part of the country, every state, has at least two exportable items.
Look at the recently released statistics that show that Nigeria still remains the biggest economy in Africa – yet we are not as productive. So we need to increase the productive base of the country.
Zenith has been very very audacious in terms of addressing some of this potential that has made us the leading non-oil export bank in the country. Zenith is also supporting SMEs, where we are not shy about lending to them. And major projects that are making impact in the country, you are going to find Zenith as a number one or number two bank.
So in every sector it depends on who comes, and what your business proposal is – you’ll be sure to find partnership with Zenith.
Last time World Finance interviewed Dr Ebenezer Onyeagwu, Group Managing Director and CEO of Zenith Bank, the bank was celebrating 10 percent growth in gross earnings. This year, that number is 24 percent – in a year when the Nigerian Central Bank announced a complete redesign of the Naira, leading to huge cash shortages. Dr Onyeagwu explains how the bank was already on course to overcome that challenge with its Project Tiger; how the values, culture and ethos of the bank drive its business; and Zenith’s plans to expand into Francophone Africa in the next five years.
World Finance: When we spoke last year the bank was celebrating 10 percent growth in gross earnings; this year that number is 24 percent. Ebenezer, how are you achieving this?
Dr Ebenezer Onyeagwu:What distinguishes us from the market is that we see things differently, we do things differently. That’s coming from the kind of values, cultures and ethos that drive our business.
You see this evident in the quality of staff we have – not only are they the best talent, they are creatively expressive. So we are able to get opportunities quicker, interpet the trends in the market very quickly than others.
Then speaking to the number itself, you’ll find out that in all the key markets where we compete, we are a strong number one, or a very close number two. The key projects and key development driving business and the economy – you see Zenith being the partner bank.
If you look at the non-oil export space in the last one year, Zenith has been able to demonstrate leadership, where we control about 50 percent of that business.
We’ve also made very significant progress in our retail and digital banking. You see a lot of creativity in terms of our product offering, you also see our staff very bold and audacious. So I would say that what is driving us really is the strong ethos, the culture of the business: don’t just do work, be productive, be innovative, be creative to do something different.
World Finance: Now, one particular challenge you faced this year was the redesign of the Naira, which forced the bank to replace every single piece of cash for its customers – can you tell me how you tackled this?
Dr Ebenezer Onyeagwu:Oh, Paul – that was a most difficult moment! The announcement was made in November, and the deadline was the end of January – the timeframe was too short.
Two, there was an underestimation of the amount of cash in the informal sector. We didn’t have a corresponding amount of money in the new notes coming in – so that created scarcity.
The scheme was supposed to also lead us into the cashless payment – making use of digital payment. But what became evident was that banks in Nigeria need to upgrade their infrastructure.
In our own case, we already started the upgrade of our infrastructure about 18 months ago. We had to accelerate the completion of our Project Tiger – a completely new enterprise framework putting all the subsidiaries in the same enterprise environment. What that does for us is that we can harmonise our IT talent and resources. We’ll be able to support our various channels so that we can take on a larger volume of transactions, be able to consume a lot more API.
So I would say that in a way we are ahead of the curve in terms of building brand new architecture fit for purpose for a digital environment.
World Finance: And what is your vision for the next five years of the bank? How is that culture and creativity going to move you forward?
Dr Ebenezer Onyeagwu: First is that our Project Tiger will have been completed. Project Tiger will give us the opportunity to create very massive dexterity in our platforms, so in the next five years we’re going to be leveraging very strong IT capability to extend our franchise, build a lot of products to address different verticals in the business space.
Next five years we also want to expand our franchise – currently we are processing our licence for a presence in France that will see us getting one or two presence in Francophone African markets. We expect that retail and digital banking, in the next five years, should almost be 50/50 with our corporate commercial banking business.
We see a lot of opportunities, we see a lot of heavy lifting to be done in the next five years. Where we need to compete we’re not scared to compete; where we need to collaborate, we will collaborate.
Baiduri Bank has long been at the forefront of financial services in Brunei, delivering technological firsts and innovative solutions in response to ever-evolving consumer behaviour. Baiduri CEO Ti Eng Hui explains how the bank’s digital transformation is improving the customer experience, which technologies are being deployed behind the scenes, and how Baiduri is upskilling and reskilling its workforce to meet the new challenges of the digital-first banking era.
World Finance: How has your digital transformation been delivering improved customer experiences?
Ti Eng Hui: We believe that genuine human connection is at the core of excellent customer experience. It is therefore essential for us to have a hybrid approach – leveraging technology while providing the best banking experience for our clients.
And we have enhanced so far our digital banking platforms for both retail and business customers. The app that we have launched incorporates optional biometric login as well as financial calculators and risk profiling tools to provide a better customer experience.
More recently, we have launched new offerings such as Baiduri Qpay, that allows our customers to pay via QR code.
We continue to improve digital engagements through our industry-first AI chatbot, Emmi. At the same time, we are reconfiguring our branch design and service model to offer a better overall experience that combines both online and offline interactions. So our branches are now focusing less on transaction processing, and more on providing quality financial consultations to our customers.
World Finance: And how have you been transforming Baiduri’s internal workflows and infrastructure?
Ti Eng Hui: Yeah, we need to ensure that internally, the organisation is ready to support our digitisation aspirations. For that reason, we kickstarted our digital transformation with our HR function. We are using cloud-based solution SAP SuccessFactors, and through this platform, most of our human resources and talent management processes are now done digitally.
We are actively deploying modern technologies including artificial intelligence, machine learning, Robotic Process Automation and new microservices to automate existing workflows.
Baiduri Bank will be the first bank in Brunei to migrate and operate our core banking platform to a new cloud-based system under the SaaS model. This will enable us to offer superior customer propositions with personalised offerings when we go live in the middle of next year.
We are also the first bank in Brunei to modernize our credit risk management using artificial intelligence – through this, we are developing and deploying high quality credit scorecards at a fraction of the time and cost – with reduced credit risk, improved efficiency and greater agility for retail and SME businesses.
World Finance: Now, is there a risk that on your transformation journey, you could lose good staff along the road?
Ti Eng Hui: This digitalisation journey will undoubtedly bring about shifts in the way that we work – and that is why it is important for us to be a learning organisation that focuses on reskilling and upskilling our people – identifying technical competencies needed to support our journey and building in-house digital capabilities.
The bank’s newly established Organisational Development and Learning Unit is tasked with upskilling and reskilling the bank’s workforce – offering leadership courses, Employee Wellness initiatives, Change Management, transformational workshops, and on the job training to identify gaps in skills and competencies.
A great example of this is that over 30 employees from different business lines and key support functions across the whole Baiduri Bank Group underwent the RPA Citizen Developers certification. They will act as RPA champions to help further Robotic Process Automation within the group.
World Finance: And what does the future hold for Baiduri Bank? With these twin digital and people transformation strategies, what do you hope to achieve?
Ti Eng Hui:So as a 100 percent owned local bank, our focus for the time being is very much on the Brunei market; Baiduri Bank has continued to grow significantly, thanks to the great support received from our customers and all the stakeholders. Since we already hold a prominent position in the local banking industry, the only way to grow further is venturing beyond Brunei.
At the moment we are focusing a lot on capacity building, especially from the people side of it, technology and organisational perspective. We need to evolve our business model, reaching a high-performing level of operations and execution of our strategies.
Once we have a strong foundation, it will be time for us to consider a diversification plan beyond Brunei.
World Finance: Now David, before we started filming, we were discussing crypto and you said, ‘All coins are the best marketing scam that’s ever been invented’ – I wonder if you could expand on that view a little bit?
David Barrett:I don’t think crypto as a sector is all bad – I think there are parts of it that are going to be very influential on the way that markets develop.
Tokens and coins – I just don’t get.
I’ve read the white papers, I’ve been to seminars, I’ve listened to people that are converts, and I don’t understand it.
Buffett calls them gambling tokens, and I really think that’s a pretty good summary of what they are. I think if you look at how the crypto market developed, it came to the fore at a time when we’ve got more polarised politics that we’ve ever had, we have a greater wealth gap than we’ve ever had, we have more people that are disenfranchised from the system than we’ve ever had. So selling something new that’s going to solve all those problems?
Crypto coins and tokens, NFTs, are a fantastic example of how to sell something. But I think the quality of what they’re selling – personally I don’t think has enough of a real world impact that they’re anything other than just a gambling token.
World Finance: EBC itself doesn’t touch crypto at all – is it purely because of this view?
David Barrett:No no, not at all! EBC is there to provide products for its clients, and client demand – and regulatory acceptance! – will obviously allow that.
The problem with crypto as a UK-based broker – the first one is the regulatory side. So the FCA, I kind of feel has been hampered by the government in terms of how they regulate it, and formulating a good regulatory environment.
That will come, but at the moment I think it’s kind of piecemeal.
I think the actual volumes that brokerages are seeing in crypto – the tokens and the coins – is much less than anybody would like to admit.
And I think probably the most important thing for us – outside of regulation – is banking. Banks don’t like it! We are lucky enough to bank with a tier one banking institution, we have full corporate banking, and we are very, very aware of what they do and don’t like. And being involved in crypto, being involved in the exchanges, paying, receiving from them – they’re very, very sensitive to. And that makes it very difficult for us as a regulated broker to jump in with both feet without thinking.
World Finance: But putting coins and tokens aside, you do see potential in crypto?
David Barrett: I’m a massive believer that the true gift of the crypto market is stablecoins. Their ability to impact things like settlement, credit risk, on the ledger custodial type businesses, can be immense.
Rather than when we say T+2, that’s trade date plus two days, which is the normal settlement period in something like FX – there’s no reason with the application of ledger and stablecoins and instant transfer that you can’t bring that down to what we would call T+0, which means it’s near instant.
We probably need the central banks to come up with central bank digital coins, because the legitimacy that they bring will help a lot. But I think as soon as you get those digital coins from the central banks in place, what you should be able to do is evolve a system where it’s almost instantaneous.
And the beauty of doing that is that you significantly reduce your credit exposure to other institutions, to your clients. But also the ability to make that market more efficient by making it more fluid and safer is a much better place for everybody to be.
World Finance: David Barrett, thank you very much.
David Barrett is CEO of EBC Financial Group; the award-winning liquidity provider for institutional and professional traders. After discussing how interest rate increases are affecting the markets in general, he focused on derivatives: how liquidity providers are becoming more cautious about liquidity and leverage, the probable return of greater volatility after a decade of artificially suppressed rates, and how traders need to be more circumspect about what they’re actually trading. You can also watch the final part of our interview with David, where he discusses his views on the crypto sector.
World Finance: David, we’ve spoken about the impact of rising interest rates on the market generally; how is it affecting derivatives specifically?
David Barrett:If you look at the market in general, you could argue on the surface that not a lot has changed. But I think if you dig a little deeper, I think that’s not true.
I think the fallout particularly in say, the banking sector in the US, the regulator has heightened its approach, and it’s heightened its scrutiny of what’s going on. Only recently the US has launched more stringent capital and reserve rules, based around what happened to the three regional banks earlier in the year.
I think regulators in general are being more circumspect about what’s going on with companies within their industries’ balance sheets. We’re regulated by the FCA in the UK – I’ve worked for regulated companies for 30 years, and I’ve never seen so much introspection on the financial resources and how you manage those resources.
I think liquidity providers are being a little bit more cautious about liquidity – in terms of the leverage that they’re offering. And I think, you know, there’s no doubt that the depth of liquidity when the market picks up pockets of volatility is a lot less than it would normally be. And I think that tends to be a fallout of the previous instances of pain that we’ve seen in the markets.
World Finance: Any advice you can offer to traders in this new environment?
David Barrett: I think you’ve got to accept that the way that the market is functioning has changed somewhat. So, whereas people would broadly be bullish on certain parts of the market – let’s say stock markets. Indices have been a very acceptable way of reflecting your opinion of what the market’s doing.
I think we are coming much more into a stock picker’s market. I think you have to appreciate the state of a company’s balance sheet, its liquidity, and its ability to get through times of stress much more now than before.
I think leverage should be reduced, because I do believe that volatility has been supressed for so long, that we’re getting to a point where that could easily change.
Historically interest rate differentials have been a big driver in FX, because everything’s been homogenised to a very low level, then we’ve had very low realised volatility in FX. And that’s just starting to change. And you can see – the dollar/yen’s moved significantly over the last 12 months or so. That’s mainly driven by an interest rate differential, because the Bank of Japan is pretty much the only central bank that’s not gone the same rate hikes of everybody else.
So I think people need to be more cautious, with less leverage. I think they need to be more circumspect about what they’re actually trading.
And I think they should be aware of heightened volatility and what it does.
Markets have very much mean-reverted over the past two or three years, and I suspect if we start to get trends in markets, they may keep going more than they have done.
World Finance: And how about regulators? Would you recommend any changes, or do you forsee them making any?
David Barrett:I think the regulator is becoming much better at appreciating how the market works. I mean, if you look at brokerage, which is what we do, their appreciation of how the sector works, how it makes its money, how that impacts on the end user – it’s much better than it’s been, ever.
So the UK FCA are just about to bring in a consumer duty package, which is there to heighten people that are selling financial products and their impact on their clients to the firms that are doing that.
And I think that kind of deep dive and circumspect pressure will continue from regulators all over the world.
There will be a lot more pressure for clarity of: what you’re doing, how you’re offering it, and how it impacts the end user.
World Finance: David, you said in the latest issue of World Finance that interest rate increases are the most significant trend affecting liquidity today – could you tell me more about that.
David Barrett:Yeah, I think in a year where we’ve had an awful lot going on: AI has been a predominant headline, if you look at what’s gone on in crypto, you look at what’s gone on in world markets in general – you know, the US had three bank failures in March. There’s been a lot going on, but I think the predominant driver and influencer on all of those things has been US rates.
We’ve had a significant increase over the last 12 months, and even last night we had another increase from the Fed, although many people think that that’s probably enough. Rates have influenced and dominated the movement in pretty much every corner of the market, I think.
World Finance: We’ve had a decade of near-zero rates – what kind of behaviours became normal in this incredibly long period of time?
David Barrett:Yeah, it was a long period of time! And I think if you look at why it came about, it was perfectly justified. I think the authorities at the time of the crash in 2007-8 – I actually think they did a fantastic job!
I worked at an institution that was in the middle of that, and it was clear to all of us there just how poor the conditions in the market were. But I think it went on for too long. The biggest problem the world has had is that it’s decided that low rates are the new normal and it would carry on forever – and that’s clearly not true!
I mean, rates now aren’t high. Rates are more like what we would consider an average over the past few decades. But compared to where a lot of industry has grown up in the last 10 or 15 years and has really developed and survived in an environment of low rates, it’s come as a very big shock.
World Finance: So it’s not really that we’re entering a new normal – we’re entering the old normal again.
David Barrett: Yeah, I think it depends on who you ask. If you ask me, this is normal! Where we are now is much more like the normal that I could express as normal. I don’t think having artificially supressed interest rates is a normal environment.
I think it’s politically expedient! But it’s just not justifiable. And when you get something like inflation come along, lower rates create a huge problem, and solving them, you have a pretty blunt toolbox.
You know, higher rates will work against inflation, it will solve it. Being a blunt tool it tends to break a few eggs as it’s going along, and we’re seeing that now.
The consumer has been hit, but not perhaps as hard as you would think.
You know, always it’s the lower end of the economic stack that gets hurt most. And if you look at the way that inflation has taken hold and you look at the things that are being affected by it, consumer confidence is only one of those things.
I personally don’t think inflation will go away quickly – if anything I think we’re actually clueing ourselves up to maybe a second round of inflation. And that would be very damaging for markets, because they’re already trying to call a top on interest rates, they’re already predicting that the Fed’s going to start cutting at some point.
I personally am in the higher for longer and beware if we get more, camp.
The causes of inflation this time are different, and I think that the solutions and the time it takes to get rid of it is going to be a lot harder than people want it to be.
The reality is that we’ve had it incredibly easy for a long while, and it’s not as easy. And I think part of the problem for people in general is accepting that things have changed – particularly if they change for the worse, and not for the better.
When COVID hit the Philippines, the islands shut down. The country instituted one of the world’s longest and strictest lockdowns, resulting in a GDP contraction of 9.6 percent in 2020. But for Standard Insurance it was – uncomfortably – one of their most profitable years. Patricia Chilip, chairman and CEO of Standard Insurance, explains how the company has been performing since the country reopened, how Standard is channelling that growth back into the local community, and how it is leveraging technology to be there for its customers through difficult times for another 65 years.
Patricia Chilip:I don’t think anyone was ready for COVID. Nobody knew what was going to happen the next year, or the next day. Our first response was really to make sure that the employees were okay, make sure that everyone wasn’t sick, or if they were to get them to the hospitals.
But actually, my brother, who was running the company at that time, had a year before put all the systems on the cloud. Which meant we could issue policies, and deal with claims. So in that sense, we were actually ready.
World Finance: When COVID hit the Philippines, the islands shut down. The country instituted one of the world’s longest and strictest lockdowns – meaning that in 2020, the Philippines’ GDP contracted 9.6 percent. Nobody was going anywhere or doing anything – so for the non-life insurance sector, sales plummeted – but so did claims. For Standard Insurance, it was – uncomfortably – one of their most profitable years. I met with Chairman and CEO Patricia Chilip to find out how the company has been performing since the country re-opened.
Patricia Chilip:From 2022 we’ve been seeing like double digit growth, 15 percent, sometimes 20 percent. You know, there’s like pent-up demand because nobody bought anything during COVID. So now like, people are buying new cars, and people are travelling again because they haven’t travelled in two years. So it’s a surge of growth, and we’re using technology to keep up with it.
What’s exciting for us now is all the AI. We’ve been using that for our claims. We’re using chatbots to be able to answer frequently asked questions, ocular character recognition to be able to read receipts,. As well as doing some things for our value based adjudication of our claims.
Customers also engage with us now through fintech. So, we meet them digitally and we like to be present in all those platforms, whether it’s through fintech payment systems or online banking – we try to be at every touchpoint.
World Finance: When you’re seeing the kinds of success you’ve described, how important is it that you put some of that growth back into the community?
Patricia Chilip:Well it’s very important to us, you know. We are a Filipino company, and our customers are Filipino, and we want to give back to the Philippines.
We have a lot of advocacies. Our group chairman, my father, is a big supporter of the Philippine coastguard. We’ve donated speedboats to be able to patrol the Manila Bay, as well as make sure that the coast is clean.
We support a lot of scholars, young violinists. We make sure that they are educated in the best schools, like Giuliard, or in Vienna.
We’ve also supported nutrition for children and mothers. We’ve supported kindergartens for kids from three to five – that’s my favourite one, because that’s really when the brains of the kids are sponges, so we partner with MoveEd, and they teach as well as feed the kids at the schools.
For me personally because I care about the environment, I love that we planted 12,000 trees for our 60th, and we hope to plant more now that we’re 65. You know, you plant a tree… it’ll benefit the generation after us. So that’s what’s important for me. But everything we do is really for the development of the Philippines.
One of the values of Standard Insurance is really a passion for excellence. So all our advocacies make sure that the community has what they need to be able to have that passion, so you have to have the right nutrition, the right education, the right avenues, if you want to grow and excel. So that is really our passion, to bring Philippine excellence to the world.
World Finance: Finally, 2023 marks Standard Insurance’s 65th anniversary – how are you working to ensure that the company enjoys another successful 65 years?
Patricia Chilip:I’m happy to be here. Helming a company that has been of service to the Filipino for 65 years. And I’m just grateful for the officers and for the employees who have taken us this far. Really they are the heart and soul of this company.
Our people really have a compassion to help, you know. It’s tireless service. every day they wake up, Respond to claims, respond to clients in need. They make sure our systems are all working. And now it’s 24 hours, I mean service is 24 hours. So they really are there for you, they’ll pick up your call when you’re like stuck in Madrid, or you’ve freaking had a heart attack, we will pick up the phone and take care of you. Really somebody got hit by a bus in Italy, and I swear this team didn’t sleep for like two weeks, to make sure that she came back to Manila okay. So that’s really how we do it.
It’s our life purpose to really be there for you when we’re needed. we’re here in difficult times, whether it’s typhoons, catastrophes, or whether you had a medical emergency abroad, I’m proud to be working with employees who will pick up the phone at any time at night to help a customer in need. And if we keep doing this for 65 years then, then our company will evolve and change and still be a relevant one that responds to all the customers needs.
‘The Philippines gets about 18-24 typhoons a year. We sit at the Pacific ring of fire, so we also have earthquakes. We have flooding. And with climate change, they’re more and more frequent,’ says Patricia Chilip, chairman and CEO of Standard Insurance, one of the Philippines’ leading non-life insurance companies. She explains how the business manages all that built-in risk, balancing customer needs with shareholder expectations, and how the company is working to become one of the world’s top 10 general insurers.
Patricia Chilip:The Philippines gets about 18-24 typhoons a year. We sit at the Pacific ring of fire, so we also have earthquakes. We have flooding. And with climate change, they’re more and more frequent.
On the ground that feels like a lot of, sort of, distress, when the event happens. You know, life can come to a standstill.
It happens every year, so, we’re kind of used to it. But you just want to be able to sleep at night knowing that someone’s got your back.
It’s really our life purpose to be there for them, when they need us the most.
World Finance: Patricia Chilip is Chairman and CEO of Standard Insurance – a leading general insurance company in the Philippines, with a mission to bring peace of mind to all mankind. But what does that mean in practice?
Patricia Chilip:Peace of mind for all mankind is really our hope for everybody, what we wish for everyone: happiness, a sense of contentment, a sense of security. We really want to make sure that our clients can sleep well at night knowing that their assets are covered properly, that they have what they need. That’s what we hope for everyone.
Our job is really to be on the ground, to answer those calls when they need us. We have branches in 65 provinces nationwide, so we have somebody on the ground to help you tow your car, or help you assess your damages, or just pick up the phone and answer all your questions. Because we want them to sleep well at night knowing that they’re covered with us.
One of the challenges we face is that when an event does hit, they realise they haven’t updated their values in 10 years. Even three years ago – you know, after COVID, construction costs have gone up 30 percent, 40 percent.
So it’s so important to update your values, because if you haven’t updated your values then it’s going to be a struggle when you make a claim. Because even if you get totally paid out, you’re like: oh, it’s not enough to reconstruct my house.
That’s our campaign for 2023, to make sure that our clients have updated their values that their property’s insured for, so that when a big event hits, they’re really covered properly.
World Finance: That must be incredibly challenging as a business – taking on and managing all that risk.
Patricia Chilip:Well you know we have a really good team of underwriters. We also have all the technology behind us – we have a catastrophe risk monitoring system, a CRMS, which, you know, you can plot a GPS point and it gives you whether a place is high risk for a typhoon or flood or earthquake, and it helps us advise our clients as well, in terms of how to rebuild or mitigate their risk.
Of course we have excellent reinsurers. We have a couple of decades of relationship with them, and they know our underwriting, and they always respond so quickly. We have some of the best ones in the world. So, that kind of helps us respond to Philippine cat.
World Finance: So how do you find that balance between your customers’ needs and your shareholders’ expectations? How do you grow a successful, sustainable business?
Patricia Chilip:Well, we grow organically with our partners. We’re happy to be partners with the biggest banks in the Philippines, and the biggest automotive companies in the Philippines. And because we share a customer base, if they grow we grow.
So we’re grateful that people have approached us for partnerships, like travel regionally, pet health globally, and now we have a new partnership for automotive collision in the US. So we’re very excited about all these like, global initiatives.
You know, we find that if we put one foot in front of the other then things will take care of themselves. We do our best every day, and we find that if we do a small job well, bigger jobs come.
People in the Philippines are big on social media, so if you do a good job everyone knows. And if you do a bad job everyone knows as well. So it keeps us on our toes. And it aligns our customer expectations with our shareholder expectations. If the customer is happy, the shareholders are happy.
World Finance: Your vision for 2035 is to become one of the world’s top 10 finest general insurers. How do you earn that position and acclaim?
Patricia Chilip:You know, the customer experience has to be great. Our customers are millennials and Gen Z. And they want everything faster, everything digital. Everything seamless. So we want to be a 21st century insurer, on the cutting edge of technology, able to respond to customers’ needs. Because they need us constantly.
We want to be part of their lives. We want to be someone who makes life less stressful. And if – God forbid – a typhoon happens, we want to be there for them as well.
Our vision for the Philippines is to see a country that is prosperous, a country that is abundant, a country that is resilient from all of these nat cats. And everything we do is working towards that. Being there, to help our countrymen build and rebuild.
By taking care of them, and taking of their needs, we will find our way to becoming one of the world’s finest insurers.
World Finance speaks to Malta Enterprise and Residency Malta, the government agencies behind Malta’s new residency by investment programme for start-ups; as well as Malta Tourism Authority and the CEO of Trust Stamp, to understand what makes Malta such an attractive destination to live, work, and grow a new and innovative business.
World Finance: Freedom of movement and the ability to explore the world have long been recognised as vital to human and economic development. But more than ever before there is a high demand for politically and economically stable jurisdictions to welcome migrants to settle, work, and establish businesses.
Malta is one such jurisdiction. Small but agile, the Mediterranean island state recently created a residence permit for digital nomads; and has now launched programme for non-EU entrepreneurs who would like to use Malta as a launch pad for their ventures.
Economic development authority Malta Enterprise has been working to make it as simple as possible for new businesses to succeed on the island.
Kurt Farrugia, Malta Enterprise:We’ve been working together with our start-ups for the past few years, and we’ve been developing schemes in the form of grants or a payment advance, as well as ensuring that it’s a lot easier to setup a company to start up in Malta.
We try to facilitate as much as possible the business journey of a company. We step in to make synergies with our universities, with the technical institute, and also to attract companies and small start-ups with the highly innovative products and services to relocate and set up in Malta. And that is exactly what the programme aims to do.
We are looking at entrepreneurs outside of the European Union which are the game changers in various industries. Eligible activities that fall under the residence programme would be in manufacturing, software development, industrial services, health, biotechnology, and blue and green economy; as well as other activities that would provide solutions to any of these sectors. So we’re looking at the highly innovative start-ups that come up with great solutions.
World Finance:The programme is a collaboration between Malta Enterprise and Residency Malta Agency, the government body that manages Malta’s residency by investment programmes.
Charles Mizzi, Residency Malta:Residency Malta comes in to facilitate the relocation of these talented individuals to Malta. We will provide residence permits to the founders and co-founders, together with core employees who will be crucial in setting up and operating this business.
But we won’t stop there. We will also be providing residence permits to family members who will be relocating to Malta.
At first we will give a three year residence permit. If the business is doing well, we can renew for a further five years for the founders and co-founders. Core employees have their permit renewed for another three years.
The programme has been designed to provide flexibility and peace of mind to these individuals. We know this is a big decision for them, so we want to make this as smooth as possible.
We welcome people from all walks of life, and we hope to attract more and more people to come and live on our island and enjoy all the benefits that our country has to offer.
And it does have a lot to offer. Last year 2.3 million people visited Malta – and 20 percent of the population are ex-pats who found that the islands’ lifestyle, hospitality and infrastructure made it the perfect home.
Francesca Vincenti, Malta Tourism Authority:Well the island of Malta is in the centre of the Mediterranean sea; it is Europe’s smallest member state, both in terms of land mass and its population size. We’re very well connected to airports in Europe, Turkey, Israel, North Africa and with the Emirates as well.
It’s a very safe place to live, and it’s one of the most affordable countries to reside in compared to other European nations. Malta is extremely welcoming to newcomers, and we have two official languages: Maltese and English.
Due to the fact that the islands are small in size with short distances between one spot and another, combined with the great weather – 3,000 hours of sunshine per year – the excellent education system, reliable healthcare system and transport, and of course the multilingual population; this creates the perfect hub for anyone looking for a happy and social work-life balance.
Now whether you’re into history, fine dining, diving, wine tasting, going to the theatre, to concerts, participating in sport competitions; you’ll never run out of things to do, and you’ll encounter people here that may just become friends for life.
World Finance:Trust Stamp is an identity technology company that made Malta its European headquarters in 2020. Its CEO, CFO and CTO moved to the islands just to help the operation get started – until they and their families fell in love with the country. Now they are all permanent or temporary residents through one of Malta’s residency schemes – and the business is thriving.
Gareth Genner, Trust Stamp:The single biggest benefit of being in Malta for Trust Stamp has been our ability to grow at a faster rate than we would anywhere else. And that’s both because of the funding that the government gave us to support that growth, but also because costs in Malta are much lower than virtually every country that we operate in, and because there are talented personnel here.
Malta has the unique distinction of being both a member of the European Union, and a member of the Commonwealth. Therefore it was a very logical leaping off place for us to go into those two networks of countries. And for us, a country where we could do business and deal with government in English was an obvious attraction.
Malta Enterprise worked with us, both advising us on all of the aspects of law and regulation we needed to deal with, together with the things that we would find that are different in the Malta market.
But once we had moved here, they remained committed. We’re in year three of being in Malta, but Malta Enterprise remains as supportive for us as it ever has been. And the range of opportunities that they seek to put before us keeps growing.
We found that being completely open and flexible in communicating with them meant that they joined in the process and became a creative partner in helping us work out how best to make that move a success.
We have found working with Residency Malta to be very straightforward and collegial. Now the new residency initiatives that Malta is establishing will broaden the range of individuals who are able to come to Malta. These programmes have clearly been designed very pragmatically to say, ‘If you are going to bring your talent to Malta, and your energy to Malta, then we want to have you here.’ And again, that’s a very proactive and positive approach, as opposed to the gatekeeper approach which you’ll find in many countries.
World Finance:The programme does seem to have accessibility at its core. Each application costs just €750, plus a small charge to cover the cost of the residence card. All the information about the scheme, and the financial and advisory support available, can be found at startinmalta.com
Charles Mizzi, Residency Malta:Although there are two agencies behind this project, prospective applicants will be assigned one point of contact who will help them throughout the whole process: from application stage to their relocation.
The process is quite simple. The first thing is to set up a meeting with our team, so that we can discuss their plans and their ideas. Obviously Malta Enterprise will be looking at the business proposal to make sure it’s viable. From our side we will look at the residency, we will do a due diligence on each individual included in the application.
Then we will start a personal relationship with the applicant. We will have discussions online and possibly even invite them to come over to Malta so that they can see first-hand what’s available for them.
Normally timeframes will take around 4-6 months in order to conduct full due diligence and evaluation of the business proposal, and then hopefully we will be welcoming a lot of innovative start-ups to Malta.
Kurt Farrugia, Malta Enterprise:Added to that of course we can assist with the implementation of a project. We’re not only assisting by granting a residence programme but also we can offer our support packages, helping you throughout the whole business journey. We’re looking at the business model and if it is a good match for the island and for the start-up itself.
Our geo-strategic location is excellent. It’s easy to do business here, and this is a really good island to live or to raise your kids or to have fantastic healthcare or a good education. A good quality of life, which is so important in this day and age.
Alpen Capital is an investment banking advisory firm specialising in debt and equity solutions for institutional and corporate clients in the Middle East, Africa, south Asia and beyond. CEO and Executive Chairman Rohit Walia explains how the firm’s work with development finance institutions and impact funders in emerging markets automatically tends towards impactful projects – and how Alpen started measuring that positive impact. In the first half of this interview Rohit talks about Alpen Capital’s rapid expansion and its other recent focus of providing funding to banks around the world.
World Finance: Rohit, you released your first sustainability report earlier this year, called Sound Impact. Why did you put this report together, why have you released it?
Rohit Walia: I think in a fashion and form to measure the impact that our transactions have. It’s something we’ve always been aware about, the fact that we work in most of the emerging markets in the world. All of them have some impact or another.
Our largest funding partners are development finance institutions or impact funders. And each of them has a different thought process on what part of society do they want to fund with. So if I look at the last few years of our transactions, a huge part of our funding has come from these people, which automatically tends itself to fund projects which are impactful – either on climate, or on the society.
So the idea was to, instead of just talking about it, see what was the impact. And then potentially put some KPIs in place over the next two to three years to measure, and aim towards potentially doing more transactions in certain areas that we feel are more impactful, both to the environment and to the societies we work in.
World Finance: Well talk me through some of the most socially impactful transactions you’ve been involved in.
Rohit Walia: IndusInd Bank, funding $35m. Complete funding has gone to women’s empowerment, lending to groups of women in the rural areas of India, some of the poorest states out there.
We funded Sahyadri, a farmers’ cooperative near Bombay, owned by 18,000 farmers. The equity came in from four development finance institutions out of Europe. This has changed the lives of all these people. We could do another dozen transactions in that fashion in the same country – huge impact on the society, on the environment.
We just did a transaction – again a few weeks back, for a large rated company called Shriram Transport, which enables existing truck drivers to become truck owners. So it creates businessmen. It was funded by Asian Development Bank, $100m.
On the corporate side, the most interesting one there has been for the Tata Group, in India. They have a huge business in about eight or nine countries in Africa, selling trucks and buses – again, makes the individual bus driver into an entrepreneur. And the Tatas fund this transaction.
So what we have done for them is taken the whole bucket of receivables, as we say. Put it into a structure into Abu Dhabi, and funded it. It’s a very interesting structure, it’s taken us one year to just put the legal structure in place. It cost a million dollars in legal fees, if nothing else. But it’s been running now very well for two years, and it’s got a huge potential to grow.
We’re looking to fund a few climate change projects in Vietnam – that’s an interesting new market. That’s one of the few countries in Asia that is actually doing a lot of work towards green energy projects.
World Finance: And now that you’ve released your first report, are you going to be updating it into the future? And is this sort of transaction going to become an important part of Alpen’s strategy?
Rohit Walia: So, we will take a look at what we have done during the year, and potentially update this by early first quarter – at least for the next two to three years. And then like I said, we will put KPIs in place for different aspects of our business.
I’m not saying we’re specifically looking for such projects. But as and when we find such projects, they tend to be more of a priority for us to take a look at than other projects which come on to the table.
Alpen Capital is an investment banking advisory firm specialising in debt and equity solutions for institutional and corporate clients in the Middle East, Africa, south Asia and beyond. CEO and Executive Chairman Rohit Walia discusses the firm’s rapid geographical growth, and the most important transactions that Alpen has advised on recently – and in particular its trend towards funding financial institutions. In the second half of this interview Rohit talks about Alpen Capital’s first sustainability report, and the impact that Alpen’s work has in emerging markets.
World Finance: Rohit, reintroduce us to Alpen Capital and the services that you offer.
Rohit Walia: So we’re a 22 year old firm, born in the DIFC in Dubai. Grown quite rapidly over the last 20 years.
Two very specific services: we are good at raising money for growth capital. And number two, at any M&A transaction which you may have in mind.
There are a lot of people who are looking to grow their businesses, i.e. acquire a business, either regionally or globally. Or we have clients who are looking to divest businesses.
We’ve got very good connectivity within our reach, and we very clearly understand what it is that you need, and how do we get there. And we also have a very good idea of what would work in which part of the GCC markets, which we can help with.
The GCC markets have become more receptive to setting up industry. The largest GCC market, Saudi Arabia, they’ve actually set up an institution, Dussur, with whom we work very closely. We’re running two transactions with them right now, to help clients set up a manufacturing base in the region.
In Abu Dhabi we have something called ADIO – Abu Dhabi investment Office. We work with them very closely too.
Each has a different offering. So we have to make sure what is it that the clients requires, and how do we match it up with what is available.
World Finance: Now tell me how you’ve grown over the last few years since we last had you in the studio.
Rohit Walia: Our home markets remain the GCC and south Asia, but we’ve grown dramatically geographically.
We were working in what, six to eight countries, now we’re in about 25-28 countries.
A lot of it is in Africa, so there’s a dozen-odd countries there: east, west, and Francophone Africa. And Asia. We’re actually running transactions from Mongolia all the way down to Cambodia. And anything in the middle!
And these are countries where either we have done, or are doing a transaction. So that’s where the growth has come from: 15, 20, 25 percent growth, year on year. But I think each of us has become a lot more efficient, you know, given the last three years of COVID and how we worked. Maybe we figured out a better way of doing things.
World Finance: Talk me through some of your most important recent transactions. You’ve been providing a lot of funding to banks lately?
Rohit Walia: Yeah: the latest one is right here in the UK, where we’ve provided equity to one of the Neo Banks. Just got licensed a couple of years ago, called Monument Bank. We just got the documents signed a month ago – a large client of ours, Dubai Investments, has taken a nine percent equity stake. It’s an important transaction, a very nice transaction.
In other markets we’ve done some very large ticket funding for financial institutions in India. A bank called IndusInd Bank. Huge impact around women empowerment lending.
So exotic markets are where we’ve had some of our recent successes.
World Finance: And the other side of your business, Alpen Asset Advisors: what does this offer?
Rohit Walia:So this side of the business actually looks after your money, whereas Alpen Capital helps you raise money.
Our clients here are mid-sized banks, large family offices, corporates; who have short-term surplus funding which needs to be parked in a fashion which can be accessed quickly and rapidly for their businesses.
World Finance: And what is going to be the strategy for Alpen Capital, moving forward?
Rohit Walia: I think we keep focus on our core: emerging markets. We can grow them, grow them a lot. There’s a humungous potential.
We’ve done very well, very successful means we’ve done one or two transactions in each of these countries. So I think there is huge scope to grow in all of them, and that will be our key focus going forward.
Beyond Globalisation: The British Virgin Islands’ contribution to global prosperity in an uncertain world is the new report published in April 2023 by Pragmatix Advisory for BVI Finance. In the third part of our interview with BVI Finance CEO Elise Donovan she discusses the key ingredients to the British Virgin Islands’ success over the last 40 years, since the BVI Business Company was first established; and how the leading international business and finance centre will continue innovating in response to the challenges posed by changing globalisation.
World Finance: Now, the British Virgin Islands has built its reputation as a leading international business and finance centre over the last 40 years; what have been the key ingredients to its success?
Elise Donovan: One of the most important things is the establishment of the BVI Business Company. We first established the BVI Business Company in 1984, and right now we have 375,000 BVI Business Companies all over the globe. So every corner of the globe you can find successful businesses using the BVI Business Company. And that has been critical to the BVI’s success.
Why do they use the BVI Business Company? Because it provides legal and commercial certainty, it’s tax neutral, in the sense that we don’t add an additional layer of tax. We also provide a sound legal and regulatory framework. We’ve established an international commercial court, as well as an arbitration centre, to help businesses navigate any conflicts or disputes that may arise.
And more importantly, the BVI is innovative and agile. We continue to create new legislation and new products and services. Right now the BVI has become a hub for digital assets, and so we are moving into that space. So we are agile, we are innovative, and we are also creating new opportunities for businesses across the world.
World Finance: Tell me more about that, because in this report you’re identifying different forecasts for globalisation. How is the BVI going to respond? How are you going to be agile and innovative in approaching these potential different futures for the world?
Elise Donovan: This is why this report was done – we look at what’s happening in the globe, and we determine how can we position ourselves? How can we adapt, how can we best change what we need to change, to ensure that we continue as a leading international business and finance centre.
One of the things that we’ve recently done is establish a virtual assets of service providers legislation. And this is to deal with what we’ve been seeing in terms of BVI becoming a hub for crypto currencies and digital assets. So we’ve responded by creating a regulatory framework that responds to that. And that’s what we do: we remain agile, we remain innovative, and we create opportunities so that businesses can thrive.
Beyond Globalisation: The British Virgin Islands’ contribution to global prosperity in an uncertain world is the new report published in April 2023 by Pragmatix Advisory for BVI Finance. In the second part of our interview with BVI Finance CEO Elise Donovan, she explains exactly how much the BVI contributes to global wealth, employment, and tax revenues; and how different scenarios of the future of globalisation will change the role of the British Virgin Islands and other offshore financial centres. You can also watch the third part of the interview: BVI Finance CEO: ‘We create opportunities so that businesses can thrive’
World Finance: Elise, tell me more about the findings of this report.
Elise Donovan:Well the report shows that the BVI is home to a globally respected international business and finance centre; an established intermediary with a proven track record of success, of facilitating global trade and investment.
We mediate $1.4trn of assets that are held across the globe, the investment in that generates 2.3 million jobs across the world, and it also creates $14bn in government revenues.
Second, the BVI is also a very cooperative international finance centre: we participate in all the global tax initiatives, as well as for anti-money laundering standards.
And third, the BVI contributes positively to the UK economy. It does not take revenues from the UK, and in fact it holds assets in the UK of $153bn. That generates 134,000 jobs, as well as tax revenues of $3.5bn. So overall we have a very positive impact on the UK economy, and we’re fiscally self-reliant.
World Finance: A significant component of the report is exploring the future of globalisation: different scenarios and the ways they may impact on the BVI; could you explain?
Elise Donovan:Yes – globalisation is changing, and the role of intermediaries like the British Virgin Islands will be more important than ever before. There are three scenarios that have been identified in the report as potential of what the future of globalisation will look like.
The first scenario is weaker internationalism. And what that means is that globalisation continues, but at a much slower pace, and of course there are more political obstacles to navigate.
The second scenario is the bloc economy. We’re seeing economic and regulatory integration between countries, but those countries are also going into geopolitical blocs, and those blocs are diverging.
The third scenario is new economic nationalism. And what that means is that countries are deciding to sort of reverse globalisation. They’re becoming more protectionist, and that of course creates more political obstacles.
And you’re going to need intermediaries, international finance centres like the BVI, who are able to navigate the complexities that are being created as a result of these scenarios.
Elise Donovan:Thank you for having me. This report, Beyond Globalisation, does two things. First, it demonstrates the BVI’s significant and continued contribution to global prosperity. It looks at how we create jobs and generate revenues. And second, it looks at various scenarios with regards to the future of globalisation, and how we can best adapt to those scenarios to maintain our position as a leading international finance centre.
World Finance: Now why did you commission this report, and why have you released it now?
Elise Donovan:Well, globalisation is changing; we’ve seen a lot of uncertainty and risk in the world recently. There’s inflation, there’s war, there’s banking crises, there’s crypto crises. So much is happening, and it’s creating risk and uncertainty.
The BVI is an intermediary that facilitates global trade and investment, and global trade is going to be more difficult. It’s going to be more challenging. And so this report answers the questions on how intermediaries, international finance centres, can respond to this risk and uncertainty. How can we adapt? How can we change? How can we be best positioned to respond to the risk and uncertainties that are being created in the world.
World Finance: And who is the report for, who’s it aimed at?
Elise Donovan: The report is aimed at a wide range of stakeholders; and this includes the clients doing BVI business all across the world. The advisors and firms that service those clients. The policymakers as well as regulators who set the standards for global business. And of course it includes the local BVI community; whether it’s the government or the private sector.
The report is tangible, evidence-based research that demonstrates how the BVI contributes to the global economy, how we support and create jobs, as well as how we generate revenues for government coffers across the world.
It also debunks some of the myths that are often propagated about the jurisdiction. We are a small force on the global stage, punching way above our weight. An established intermediary with a proven track record of success of facilitating global trade, investment, finance, and mobility. And we’re a significant global contributor.
