‘We will always try to be the best’

National Commercial Bank’s 50-year-old chief executive officer Mohammed Bin Mahfouz told MEED in an interview earlier this summer about the goals of the NCB restructuring programme, New York, the new focus on customer services, and the possibility of the bank going public.

What are the goals of the changes taking place at NCB?

My main mission is to try and change the environment inside so that we are able to handle our main concern, which is the customer.

To achieve that aim, we had to change the organisational structure.

Changing the structure of the bank is important because we used to be segregated into smaller units that had nothing to do with each other. Each regional management saw itself as a separate bank. General management just got reports at the end of the month.

Now what we have done is that we are segregated, not according to geographical areas, but according to businesses. What we have today is 11 divisions. Each one of them is looking as far as his business is concerned kingdom wide.

Did the change from regional management worry your clients?

We are working to serve the customer, ultimately speaking. If what we are doing is to bring any anxiety to the customer we should not do it.

I told the divisions, you never let go of a relationship with a customer just because you are in a different section now. It is your responsibility to handle this relationship and make sure that someone is doing this before letting go.

You are also breaking down the hierarchical structure of the bank.

New management ideas tell you this is the worst kind of organisation that you can have if you are beyond a certain size of a business.

What you need is to change the type of management. To do that you have to change the people’s attitude towards this hierarchical system. To do that you have to define certain objectives.

Although we had in the past a budget and budget system, it was not fulfilled. The reason was that we did not do it on a frequent basis and it was not involving more people of the community of the bank. What we now have is a budget review system that helps us know month to month what we are doing.

NCB is investing heavily in training. What does that entail?

Training is at the very top of the list as far as priorities are concerned. We are spending almost five times as much as we used to spend on training. In 1994, we have already exceeded what we spent in 1993 by five times.

You are going through change. So everyone, including top people like myself, had to change their thinking about work.

Unless we are able to feel that change within ourselves in the top management, I don’t think we will get other people down below to feel it too.

What does the restructuring mean for NCB employees?

One of the things we found in the bank is that the bank was carrying a very big expenses load in its manpower. The reason for this is that in the past there was not (such) a big concern about the business as there was about the bank being a social institution. Now we are telling branch managers that a branch is a business venture and that managers are managing a business.

The (surplus employees) we take, we try to train and rehabilitate into something we can use. If we are able to do that and utilise them in the system somewhere, well and good. If not, I can say that I tried my best.

I am serving the community by taking (an employee) out of his job, trying my best to train him and lift his standard.

The main objective that we have is changing the cultural attitudes. I say: don’t think by pretending to agree with the change you are doing yourselves a favour or doing us a favour.

How do you see the balance between retail and corporate banking?

The retail area depends on the small customer, (who) is by experience more reliable although his business is smaller. There is more of it. It is on more of a continuous basis. That is why we are giving retail so much or our attention.

Today, our main income is coming from loans and big companies. Because of the economic structure of the kingdom, it will be some time before we reach a point where retail will be at the same level as corporate or even more.

What is you attitude to the possibility of returning to New York or other major financial centres?

I must tell you that going to New York for the sake of being there is not one of my priorities. It will depend entirely on the business sense of that action and what it means to NCB. If it makes sense for me to be there, I will try my best to go there, but it is not on the immediate agenda. But I think it is necessary and will come, but I don’t believe it will come in the next five years.

If I am thinking about going outside, I am not thinking about New York and leaving the Gulf, I am thinking about Beirut and Cairo. There is a lot to be done there. I am better known in these areas than other banks are. I think I can serve my customers and my bank by being there rather than in New York.

What is the attitude towards NCB in the US?

The US authorities have assured us that an application to engage in banking business would be received and considered without prejudice. Should we choose to submit such a request, there is no reason to believe it would be disapproved. This question is academic for the time being, however, because our attention is going to be focused on the kingdom’s banking market, where our natural client base resides and where our natural strength lies.

How is the Lebanon branch performing?

Beirut is working OK. We are now transferring to new offices and we have a new manager. It is trying to serve first of all our Saudi customers who are connected with Lebanon. This is a very good operation.

What about the Bahrain office?

We do need it and in fact we might need another office somewhere, perhaps in Asia. This depends on what Don Hill (NCB treasurer) comes up with.

Can you say something about (former chief executive) Sheikh Khaled Bin Mahfouz?

He is helping in the big policy and strategic issues. He is keeping informed of course.

Will he resume an active role in the bank?

That depends on Sheikh Khaled and the owners of the bank. We think it is an irrelevant issue. His involvement is not the issue. As one of the owners he is always involved in major policy and strategic issues.

What are the prospects of NCB going public?

It is conceivable that NCB could alter its ownership structure over the next few years, but no decision in this regard has been taken. Certainly, a broader ownership base is probable, including, eventually, public participation, but it is premature to speculate on the nature of such an arrangement.

What do think makes NCB unique?

Over 40 years, we have developed a rapport with the community. Although a lot of business was lost for different reasons, that rapport with the customer remains. Our market share has gone down lately. We want to change things enough to allow us to regain that market share.

Finally, how would you like people to view NCB?

That the bank stood with its customers in times of crisis and that the bank never let their customers down. I would like people in the future to say that the bank never forgot that its people and community have helped it be what it is. I don’t think we will be fulfilling our obligations if we let them down in any way. We will always try to be the best we can because that is what the customer deserves.