UBL's pioneering CEO sets ambitious targets

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By:
Eric Ellis
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As a woman running one of Pakistan’s leading banks, Sima Kamil has already made her mark. But her goal is for UBL to snatch top place, elbowing aside HBL, her former employer.

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Sima Kamil became the first woman to run a big Pakistani bank when she took charge of United Bank (UBL) last June. 

In Pakistan, her appointment was seen as a milestone.

True, Pakistan has had a female prime minister and a female central bank governor in the past: the former, Benazir Bhutto, was born into one of South Asia’s entitled political dynasties, while the latter, Shamshad Akhtar, a career economist, was hired during military dictator Pervez Musharraf’s regime.

Kamil’s appointment at the helm of UBL was based on merit. 

She had worked her way up the ranks of rival banks, most recently at the country’s biggest lender, HBL, gathering experience across the banking spectrum. And now she is hailed as a pioneer for career women and is often invited to be the guest of honour at events for women’s groups and civil society organizations.

Success as a woman in Pakistan “gives other people pride, and therefore puts an expectation on me,” Kamil tells Asiamoney. “I feel there are all these women who feel I have to succeed and look up to me, even within this bank.”

Yet she says she would prefer to be judged on her performance once she has been at UBL for a couple of years – and done a good job.

“I would like to be respected for that and not because I’m the first woman to run a big bank.”

At 61, Kamil is only too aware of the doors that remain closed to women in Pakistan. From her executive suite in UBL’s gleaming new tower in Karachi, the view extends across Pakistan’s sprawling commercial capital, the most populous city in the country. 

To the north is a vast urban plain that is home to perhaps 30 million people, many of them her customers. To the south and west, UBL’s economists can keep an informal eye on trade by monitoring traffic through Pakistan’s main port. To the southeast is smug Clifton, where Pakistan’s privileged hunker down in heavily fortified villas. And to the east is what remains of Karachi’s Raj-era green lung; the national museum, Jinnah Park and the gardens of the Sind Club, bastion of Pakistan’s Anglo-centric business establishment.

The Sind Club, considered an emblem of liberated enlightenment where many of Kamil’s male business colleagues network over gin or Johnnie Walker and tennis, still doesn’t admit women as members. 

The club once sported a notice saying women and dogs weren’t allowed on the premises. 

Though that sign was removed long ago, the sentiment appears much the same in 2018, and Kamil is not a big fan of the place.

“Yes, they don’t take women, do they?” Kamil says. “It’s outrageous. It’s the educated liberals. When you meet them, they are very educated and at the best universities across the world, but they will draw the line there [at the Sind Club]. 

“I think they are possibly insecure,” she adds.

“I suppose there is a patriarchy. I was fortunate that I came from a family that was very progressive. I’ve always found that it’s the more conservative men that are more open than the so-called ‘western liberals’,” she says. “Very quickly you become a peer, and if you give them respect, you get respect.”

Kamil says she believes she has always been paid the same as her male colleagues, with the exception of one of her first jobs in banking – and she’s too diplomatic to name the offending institution.

“They told me this is traditional because – it was institutionally presumed – I was going to leave and start a family. At that time, I couldn’t countenance it,” she says, so she quit the job.

“Today there are more women in this country in banking, and that is how it should be. There’s a middle management layer building, but it’s nowhere near what it should be.”

In some respects, the banking world she encounters remains steeped in tradition. UBL has branches across the country, as well as roughly 42,000 branded outlets. And some of these are in places where women are rarely seen in public. 

It is part of Kamil’s job to visit these further-flung outposts, field trips that she says she relishes. Even though she is usually the visiting dignitary, Kamil she says she will cover up “to make people comfortable,” and resist eye contact with conservative males.

UBL tells Asiamoney that “since she has come on board, there is more emphasis on women in the bank and the projection of a more inclusive image of the bank to the markets. Gender sensitivity will be a part of employee training.”

Good start

By some measures, Kamil has got off to a good start at UBL. It is possible she may even have achieved her ambition to knock HBL off its pedestal as Pakistan’s biggest bank, at least in terms of profits, though more by fluke than by strategy.

UBL reported earnings of PRs25.4 billion ($230 million) for calendar 2017, down 8.3% from the previous year. But HBL took a $225 million hit last year when it was fined for breaching US anti-money laundering legislation and was forced to shut down its valuable US franchise. The fine virtually wiped out HBL’s earnings for the first nine months; the full-year figures had not been published as Asiamoney went to press. 

“Our target is to get to number one position, frankly,” Kamil says. 

And she would like that to be by all measures; assets, deposits, and profit. 

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Even though UBL’s earnings appear to have exceeded those of HBL after HBL’s fine last year, dangers may yet lurk for Kamil. UBL revealed in its 2017 annual report that it too has issues with US bank secrecy and anti-money laundering laws, disclosing that it had come under Federal Reserve scrutiny “to address certain compliance and risk management matters.” 

The bank said it had agreed in 2013 to improve governance, adding that “while the bank seeks to comply with all possible laws and regulations and at this stage there is no indication of any financial impact, it is not possible to ascertain the eventual outcome of these matters.” 

Exotix Capital, the frontier market boutique investment bank, notes that while HBL too had promised the Fed in 2006 that it would improve compliance, it was nevertheless fined a decade later. 

But Exotix believes the risk to UBL resulting from any punitive action against it is materially lower than for HBL, because UBL handles less remittance flow through its US office than its bigger rival.

Kamil has set herself and UBL ambitious targets. If she is to succeed in overtaking HBL, “the only way really to do it is via retail. Our aim is to accelerate. If you do it in an everyday way, you will not.” 

Customer-wise, it would mean doubling UBL’s current base to something approaching HBL’s near-10 million customers. But ideally she would like to increase the bank’s customer base fivefold. 

“We’ve been around for about 60 years and we still only have 4 million to 4.5 million accounts, and that’s accounts not customers, so why should we not be 20 million customers?” she says. 

“To be very honest the fault is ours,” she says. “We have not been able to give them something that meets their needs. We are not really getting true financial inclusion, and that’s what we need to get, to get the unbanked, to get the women into the banking system. Instead of product-centric banking, we are moving to be a customer-centric bank. We have to put the customer at the centre, which banks have not been very good at,” she says.

“Our greatest challenge is to find alternative sources of income,” she adds. 

“The reason why I’m here is to make sure that the domestic bank engine, which is largely the deposit and customer engine, the retail engine, works to the capacity that it can. I have a background of having done that with my friends across there,” she says, pointing to the neighbouring offices of HBL.

“I’ve also done corporate banking, so these are the two things that are the big focus for the bank now.”

She has issued targets to sales staff across Pakistan. They added 450,000 new accounts last year, many lifted from competitor banks. She wants another 750,000 added this year, of which half should have “reasonable” balances. These would be low-cost deposits, she says, where the spread for the bank is about 5% to 6%, as “the key to banking is low-cost deposits.”

Under orders from the central State Bank of Pakistan, UBL launched its ‘Asaan’ (which means easy in Urdu) account in 2015, requiring just 100 rupees ($0.90) to get under way. Kamil wants new account penetration to follow the spread of mobile phones. 

Mobile penetration is measured at around 90%, although only a fraction of those are smartphones, with overall user numbers strongly tilted to men.

Kamil hopes to take UBL’s push to the lower end of the small and medium-sized enterprise sector.

“If you take a corporate banking approach to that sector, it doesn’t work,” she says. “They are not documented, they don’t produce fancy financial statements, so we’re bringing out product plans tailored for them, for businesses that women are in.”

Colourful history

UBL has a colourful history. It was founded by Pakistani banker Agha Hasan Abedi in 1959, just 12 years after the country’s independence, and was a rare example of a privately owned bank. 

Abedi wanted to modernize the banking sector and saw the need for a bank that could span the developing commercial nexus between Pakistan and the oil-led booming Middle East. 

He turned UBL into Pakistan’s second-biggest bank after HBL, the bank favoured by government and most closely identified with modern Pakistan’s formative years thanks to its role in financing Muhammad Ali Jinnah’s All-India Muslim League.

But in 1974, when Pakistan was still reeling politically from the loss in 1971 of East Pakistan (modern-day Bangladesh), the prime minister at the time, Zulfikar Ali Bhutto, nationalized Pakistan’s banking sector, including Abedi’s UBL. 

The canny Abedi had anticipated the seizure and had already founded the Bank of Credit and Commerce International using capital from Bank of America and the Abu Dhabi royal family. BCCI was later nicknamed the Bank of Crooks and Criminals because of its patronage by drug cartels and dictators.

After General Musharraf’s military coup in 1999, the government embarked on a succession of privatizations aimed at reviving what had become a moribund Pakistani economy, particularly its waning banks. The programme was stewarded by Shaukat Aziz, a career banker who Musharraf had summoned from Citibank to be his finance minister.

One of the first state enterprises on the block was UBL, and it proved a bargain. In a 2002 auction, the London-based grocery wholesaler Bestway Group joined Abu Dhabi royal Sheikh Nahyan bin Mubarak Al Nahyan’s Abu Dhabi Group to buy joint control of the bank in a knockdown $210 million deal. 

Bestway bought another 20% of UBL from the Emiratis in 2011, gaining outright control of the listed UBL with 61% today.

Fast forward to late 2016. Kamil, then head of branch banking at HBL, was at home with her husband when she received an unexpected call from a director of UBL’s controlling shareholder, Bestway. 

Kamil knew Bestway because she had previously managed the group’s Pakistani corporate account. 

“I was watching television,” Kamil recalls. “The director asked me if I’d like to talk about ‘things.’ I wasn’t sure what, and I said: ‘Sure, I’ll meet you.’”

Kamil flew to a meeting in Islamabad to meet the director, who proposed that she join UBL. 

“We chatted for 15 minutes and it was agreed, more or less,” she says. “They looked at the market, they looked at what the bank needed and they saw a match.”

She then flew to London to meet the Bestway chairman, the formidable 83-year-old Anglo-Pakistani businessman Sir Anwar Pervez. 

Widely regarded as the richest Pakistani in Britain, Sir Anwar had come to the UK as a 28-year-old immigrant in 1963. He started out with a convenience store in London’s Earls Court and turned into one of Britain’s biggest wholesalers. 

He also has interests in cement, property and in banking, via UBL in his native Pakistan.

Rumours of Kamil’s possible defection from HBL started surfacing in the local press in early March. By March 28, UBL had confirmed that Kamil would join the bank as deputy chief executive with the understanding that she would take over as president and CEO from Wajahat Husain.

Husain had been boss since 2014, but by 2017 he was at the centre of a personal tax probe by the state, the results of which are still not known.

'Fell into banking'

Had Kamil hung on a bit longer at HBL, she might easily have stepped into the coveted chief executive post there.

“I would have wanted it, yes,” she says. “But the CEO was given an extension, so I knew that wasn’t going to happen in any short time.”

But as it turned out, HBL’s chief executive Nauman Dar fell victim to the massive fine levied on HBL by New York regulators for breaching state money-laundering laws. He stepped down suddenly in late 2017, a year before his contract ended.

Even though Kamil has worked in banking all her career, she had no burning ambition to go into the business as a young woman. 

“I would’ve preferred to have done English or history or development economics,” she says. But while she was studying in London, a conversation with her parents proved critical.

“My parents said I had to do something that earned money and my preferred fields weren’t going to earn me much money. I could’ve been an academic but they said: ‘Well, we are not made of money.’ When I came back, I wanted to work for government. But I fell into banking.”

Returning home, she briefly worked at Standard Chartered and American Express before alighting at that common training ground of myriad South Asian bankers, Grindlays, then owned by Australia’s ANZ Bank. She worked for them in Dubai and spent two years in Melbourne on ANZ’s risk desk.

But it was a senior job at Grindlays in Lahore that was formative for her, she says, both as a banker and as a woman. 

Kamil was born in Karachi into a so-called mohajir family, an Urdu word which means immigrant; Kamil’s father was an Urdu-speaker born in Delhi who was a businessman and mid-level banker with Bank of America. Her mother was from the Punjab region, which spans modern-day India and Pakistan. 

Traditionally the word mohajir was associated with arrivals to the city during the 1947 partition that separated the British-ruled sub-continent into independent Hindu-led India and Muslim-led Pakistan, but more recently it has been hijacked and given strong political overtones. 

Kamil’s family was progressive and well to do. She was educated at the Anglican Church’s liberal Karachi Grammar School, regarded alongside Lahore’s Aitchison College as Pakistan’s best school. 

Co-educational and known for its academic rigour, KGS alumni include the late Benazir Bhutto and two other members of the Bhutto family (Kamil was in the same class as Benazir’s younger sister Sanam), a brace of politicians, diplomats and scientists, and Indonesia’s first democratically elected president Abdurrahman Wahid. Kamil now chairs its board. 

From KGS, Kamil went to the UK to study business at Kingston University, completing an MBA at London’s City University.

But when it came to moving to Lahore, she chose not to ask her family for permission to go, at a time when “it was not done for women to live alone. It’s probably still not done. It taught me to think that whenever something challenging is offered, just to say yes to it, just do it.”

After Standard Chartered bought Grindlays in 2000, Kamil was appointed chief risk officer of the combined entity in Pakistan. In 2003, she was headhunted to HBL, where she worked for 16 years, starting out on the corporate and investment banking desk and then finessing HBL’s branch network as head.

“To be honest, for this market, that’s when I really learned banking,” she says.

Power to change

Now she has the power to change UBL, what has she liked and disliked since ascending to the top slot?

“I like our governance, it’s very strong. For a bank, that has to be primary now, when there is massive scrutiny, and will only get more and more.”

As for negatives, “I’d like to see us more outward-looking, having more energy toward the market, just going out and being there in the market, more business hunger. If we can get out there in the market, with the governance we have, we should be unbeatable.”

As for the wider state of Pakistani banking, Kamil says it needs modernization, inclusion and consolidation.

“For the size of the economy, there are way too many banks. There are 40 to 45 banks,” she says, adding that some of the smaller banks need to merge.

“Our banking system is strong, it’s well regulated,” she says; “At the moment, five or six strongly compete. We need about 15, all competitive.”

Is Kamil’s UBL a buyer? 

“We already have the full menu. There might be something smaller, but not at this point.”