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AIB: Building a promise for the future of Afghanistan

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Afghanistan International Bank provided vital lifelines to society during the challenges that gripped Afghanistan in 2021. In an interview, CEO Joseph Carasso speaks about the mission and strategies that enabled the bank to support Afghan society during one of the most difficult years for the country.

In August, 2021, when Afghanistan was engulfed in political and social upheaval, Afghanistan International Bank (AIB) provided a bulwark of stability and continuity amid the challenges. As the economy faltered, AIB stepped into the vacuum to keep society moving — providing banking lifelines and carrying out humanitarian missions.

The world’s leading humanitarian organisations made AIB their go-to entity to distribute critical aid, including the coordination of financial disbursements to 173,000 teachers and payments that kept health services afloat.

“Global organisations entrusted AIB with overseeing an urgent and very significant and challenging disbursement of humanitarian financial incentives across Afghanistan,” says CEO Joseph Carasso. “It aligned with our mission to be a catalyst for growth and recovery.”

AIB’s humanitarian achievements in 2021 are a testament to a broader narrative of trust the bank has won in the global community, making it Afghanistan’s “bank of choice” on the international stage. Carasso says this reputation is built on AIB’s commitment to “meet and surpass” international standards of governance, compliance and operational excellence.

If global organisations chose AIB to oversee a sensitive and complex distribution of aid, it was largely because of a proven record of probity and excellence. The respect springs from committed and apolitical shareholders, an independent board, and years of investment in a quality team, advanced technology, and the most rigorous standards of compliance. The bank has over 60 staff in its compliance department, representing nearly 10% of its total workforce. This brings it widespread recognition as Afghanistan’s most reliable and trustworthy bank.

These high standards play out in financial results. Although revenue decreased by 22.2% due to the upheaval in the country, AIB managed to remain profitable with a net gain of Af236 million ($2.6 million). It also maintained a capital-adequacy ratio of 14.9% and increased both assets and deposits for the year.

“In frontier markets, just maintaining normality can often be a challenge,” says Carasso. “From an operational perspective, one of the things we pride ourselves on is staying open for business through last year’s disturbances. By riding the storm, we were also able to produce positive financial results.”

Building global trust through liquidity management

Carasso credits ample liquidity as a critical factor in helping AIB achieve success in 2021. This strong cash position was the direct result of years of disciplined banking management, he says, enabling AIB to maintain strong links to global financial partners through last year’s challenges.

From an operational perspective, one of the things we pride ourselves on is staying open for business through last year’s disturbances. By riding the storm, we were also able to produce positive financial results
Joseph Carasso, AIB CEO
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“Our liquidity position has led to a strong trust from the international community, and the respect of our local regulators, which together enables us to maintain our existing external business relationships with payment processing capabilities,” says Carasso. “Liquidity breeds trust. So it becomes a virtuous circle that enables us to be profitable even in tough times.”

Beyond strong fundamentals, Carasso says, AIB’s ability to take nimble action in a volatile situation was instrumental to keeping the bank profitable. “We had to take fast action to rethink our operations, our cost structure, carry out portfolio reviews and adjust delivery channels,” he says. “We had to recalibrate very quickly, and that allowed us to bounce back — in just a couple of months — to positive results. When the storm came, our boat was strong. The skippers, the crew, the overall structure — everything was built carefully over time, so that we were able to sail through a challenging period.”

This agility in a country as challenging as Afghanistan has depended largely upon investment in technology. For example, AIB’s banking system is hosted on Oracle FLEXCUBE 14.5, making it rare even among banks in developed nations to use the latest version of the advanced banking software. This year, AIB integrated Oracle’s FCCM (Financial Crime and Compliance Management) technology, a key step in further bolstering the bank’s KYC (know-your-customer) and AML (anti-money laundering) protocols, helping it deepen leadership as Afghanistan’s most trustworthy bank.

By being a globally respected bank, AIB helps bring credibility to Afghanistan as a place to do business. “We humbly like to believe that our ethos of meeting and surpassing international standards,” says Carasso, “also helps the nation to continue to access international funds.”

That role proved vital in 2021, as AIB became a conduit for global financial flows at a critical time, being the only Afghan bank with US dollar clearing through a recognised international bank. AIB also provided critical access to funds through electronic banking and credit and debit cards, as Afghanistan’s only bank with a licence from Mastercard and Visa.

Team effort for the future of Afghanistan

In the end, AIB believes its success relies on the talent and dedication of its staff, who continued to work day-in day-out, keeping customers connected to banking lifelines. AIB invested strongly in guaranteeing the safety of its workers, to enable them to carry out this critical social mission. The bank was thus able to handle thousands of customer inquiries per day even at the height of disturbances, carefully responding to each customer to provide vital information and assurance.

“Our human talent has truly been a differentiating factor for the bank’s success,” says Carasso. “In the last three years we’ve faced a pandemic, political turmoil, and an earthquake. The tenacity of our staff, their courage and skill — that is what kept us moving forward.”

The dedication of the AIB team came to the fore after Afghanistan’s devastating June earthquake that killed more than 1,100 people, as the bank once again became an essential conduit of essential goods and services to people in dire need.

“The next day, our shareholders, board and senior management had the same idea, that AIB had to be generous and fast,” says Carasso. “In the tragic events, we came together quickly to zoom in on exactly where and how we could make the most impact. In a matter of days, AIB had delivered 15 tonnes of rice, 80 tonnes of flour and 8,300 litres of cooking oil for distribution in the quake zone.”

The bank believes that its ability to act effectively in times such as earthquakes and social upheaval puts it in a strong position to look toward a brighter future, as society returns closer to normality. AIB can play an essential role thanks to a proven record for operational excellence and robust compliance in a challenging environment.

Like with anything that has to do with future strategy, you have to have a North Star,” says Carasso. “So our North Star is and has been and will be to remain a positive emblem and actor for achievement and transformation in the country. To Afghanistan, that’s our promise for the future.”

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