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Doha Banker

Published by Forbes on 2007-05-21

The head of the Middle East's fastest growing bank, a man trained as a chartered accountant, would ordinarily be expected to turn up in conventional business attire at a meeting of senior executives. But Ragavan Seetharaman is anything but conventional, notwithstanding his stern upbringing in a Tamil Brahmin household in southern India.
So he showed up at a recent meeting at Doha Bank's headquarters in oil-rich Qatar dressed as a Formula One racing driver. No one sniggered. It wasn't the first time that Seetharaman had resorted to gimmicks. He's come to previous staff meetings in, among other outfits, running shorts. Seetharaman, a fitness fanatic, has gotten his bank to sponsor the Doha Marathon, and he continually likes to emphasize that, in a world of rapid globalization, a small bank like his needs to run faster than anyone else, and also have endurance to deal with a fiercely competitive market.

"My idea is to provoke my colleagues, to intrigue them," Seetharaman said, adding that he wore the Formula One outfit to reinforce his message that, like the world famous racing circuit, he wanted Doha Bank to quickly become known globally. "Most of all, I want to motivate my colleagues about speed--speed and efficiency."

That he's certainly done. In barely three years he took a small, somnambulant institution and transformed it into one with a market capitalization of more than $7 billion and rising. To put this into perspective, consider the following: If you had invested the equivalent of $100,000 in Doha Bank in 2002, by April 2007 your initial investment would have been worth $1.8 million. Seetharaman has raised Doha Bank's market share to 24% during this period from 4%. In the fiscal year ending Dec. 31, 2006, the bank's net profit increased by $203 million, on an operational income of $234 million, an increase of 33.4% over 2005. Total shareholders' equity increased in the same period by 15.3% to $758 million, with a return of 32% on average shareholders' equity; and total deposits increased by 37.5%.

Now Seetharaman is taking Doha Bank--one of 200 banks in the Middle East and one of 16 in Qatar--global. He's opened offices in New York, Singapore, Japan, and Turkey. More countries are being targeted, as Seetharaman expands the bank's offering from standard fee-based consumer services to insurance, stocks, real estate and an array of financial services, including mergers and acquisitions.

And how did he transform the bank? "When I was invited by the board to the bank, I told shareholders that even if they didn't make fresh investments, they shouldn't take out their capital. I recognized that Doha Bank, on account of its insipid performance, was ready for a takeover. I was determined that the bank be totally transformed through a change in its internal culture, and through the introduction of technology."

By the time Seetharaman came to Doha Bank in 2002 he'd known all about takeovers. He'd worked at Price Waterhouse after his graduation from the University of Madras in India, and then held successive top management positions at banks in Oman. When he headed the Bank of Oman, Bahrain and Kuwait, he witnessed its unfriendly takeover by the Commercial Bank of Oman. Then he saw the takeover of the latter by the Bank of Muscat.

When he was hired by Doha Bank, Seetharaman made one of his characteristic swaggering statements. He would integrate all operations of the moribund bank within 180 days, he told board members, some of who belonged to Qatar's royal family.

Coming from a non-Arab and a non-Muslim--Seetharaman is a devout Hindu who practices pranayama yoga for an hour each morning, regardless of where in the world he happens to be--that statement was startling. In Arab banking circles, brash statements are rarely heard, and made even less rarely. But that's Seetharaman for you. And equally characteristically, Seetharaman was able to reach his objective - in 150 days.

"Doha Bank was running a retail structure with a corporate philosophy--that meant it was an institution of bureaucrats," he said. Seetharaman set about trimming staff--which is under 1,000 worldwide--and immediately introduced banking through mobile phones. More than 100 ATMs were set up.

"Innovation, productivity and performance--those were my three main criteria," he said. "I wanted to create new delivery channels for consumers. Instead of customers coming to us, we decided to go to them. I wanted Doha Bank to become a one-stop shop for our customers. Some people said I was ruthless. But any institutional transformation involves pain."

Within two years, Doha Bank increased to 170,000 the number of customers who could do all their banking via mobile phone. That figure may seem puny but it represents a fourth of the entire country's population. Only 20% of Qatari residents are native Arabs; the rest are expatriates--mainly Britons, Indians and Pakistanis. More than a half of those customers are of Subcontinental origin.

Seetharaman was able to tap into his extensive contacts in the Indian Diaspora worldwide. These Indians--known widely as nonresident Indians, or NRIs--are reported to hold financial wealth of more than $1 trillion, according to Indian government figures. They send remittances of more than $25 billion each year to their native country; by comparison, foreign direct investment (FDI) in India last year was barely $12 billion.
Seetharaman was able to persuade many of these expatriate Indians to invest in Doha Bank, although this effort is still in its infancy. He's now getting deposits from other countries in the region, including Yemen and Lebanon. No potential customer is too insignificant for Seetharaman to make personal calls.

These kinds of efforts involve relentless travel. Seetharaman visits New York frequently to speak at events organized by the Federal Reserve Bank of New York, focusing especially on issues such as good governance, corporate transparency, and anti-terrorism.
"The Arab world is redefining itself," Seetharaman said. "Oil investments that once went freely to the West are now being channeled locally. That's why I want to make Doha Bank into a global brand. So I'm emphasizing technology, consumerism, deregulation and globalization."

But, of course, such ambitions aren't possible without an enabling environment at home. Qatar is quite possibly the richest country in the world, going by per capita measurements (nearly $30,000), and oil exports of more than 700,000 barrels a day. Its GDP is nearly $30 billion.

According to the Central Intelligence Agency, oil and gas account for more than 60% of GDP, or roughly 85% of export earnings, and 70% of government revenues. Oil and gas have made Qatar one of the world's faster growing and higher per-capita income countries--in 2006, per capita income equaled that of the European Union. The CIA also says that sustained high oil prices and increased natural gas exports in recent years have helped build Qatar's budget and trade surpluses and foreign reserves.

It adds that proven oil reserves of more than 15 billion barrels should ensure continued output at current levels for 23 years. Qatar's proved reserves of natural gas exceed 25 trillion cubic meters, or more than 5% of the world total and third largest in the world. Qatar has permitted substantial foreign investment in the development of its gas fields during the last decade, and is expected to become the world's top liquefied natural gas (LNG) exporter in 2007, according to Seetharaman.

"Qatar is integrating into the world at a fast rate, and Doha Bank is part of that effort," Seetharaman said. "One key advantage that I enjoy is that I'm totally a nonpolitical person. I don't carry any ideological baggage. My only philosophy is that if one works for an institution, then you are obligated to make a success out of it."

Translation from Tamil: So far, so good.


Pranay Gupte,
Senior Writer and Global-Affairs Columnist


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