Italy’s TIM to extend 5G services Credit Suisse wealth boss Khan quits

Italy’s biggest phone company, Tel-ecom Italia (TIM), plans to extend 5G services to six more Italian cit-ies as well as dozens of tourist spots and business hubs by the end of the year.

The former monopoly unveiled its 5G mobile services plan on Fri-day. It is also negotiating with rival Vodafone to share 5G infrastructure to deliver services at a lower cost across wider areas of the country.

TIM has already begun 5G ser-vices in Rome, Turin and Naples,

is testing them in southern cities of Matera and Bari and plans to move next in Milan, Bologna, Verona and Florence by year-end.

The group plans to cover 120 Ital-ian cities within two years, or 22% of the population, it said in a state-ment.

TIM will offer tiered data-down-load packages to consumers and business clients, rather than unlim-ited data plans, according to de-tails of its offers outlined on Friday.(RTRS)

Credit Suisse wealth management boss Iqbal Khan is leaving Switzerland’s second-largest bank in the latest high-level departure under Chief Executive Tidjane Thiam.

Khan’s surprise move “to pursue other oppor-tunities” sparked speculation that the 43-year-old, who has overseen solid growth and profi t-ability gains at Credit Suisse, could move to Swiss rivals Julius Baer or UBS.

“His long-term goal is to attain a top job. But the path there could also lead through another division head job, it doesn’t need to be a CEO role directly,” a source familiar with Khan’s think-ing said on Tuesday.

Khan is considering offers from Swiss and in-ternational banks and plans to make a decision in late August or September, the source, who spoke on condition of anonymity, said.

His sudden move had come as a shock even to close associates, another source close to Khan said, while a source close to Thiam said they did not know what he planned next.

The Swiss citizen, who could not be reached for comment, will be replaced by international wealth management’s (IWM) chief fi nancial of-fi cer, Philipp Wehle, a Credit Suisse veteran and former German military intelligence offi cer who has held a number of roles since joining in 2005.

Wehle was also appointed a member of the executive board, Credit Suisse said in a state-ment on Monday.

Sources told Reuters in March that Baer is considering Khan as a possible successor to its CEO Bernhard Hodler.

Other sources have said Khan could be a good candidate for various roles at the world’s largest wealth manager, UBS.

Thiam – who has cut thousands of jobs, fo-cused on wealth management and settled legal cases that had plagued predecessors – has been reshuffl ing leadership including naming a new chief risk offi cer in February. (RTRS)

BUSINESSARAB TIMES, SUNDAY, JULY 7, 2019

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KUWAIT CITY, July 7: Watani In-vestment Co. K.S.C.C. (“NBK Cap-ital”) acted as Joint Lead Manager for the issuance of Burgan Bank K.P.S.C’s (“Burgan” or the “Bank”) US$ 500 million Regulation S Per-petual Tier 1 Capital Securities (the “Capital Securities”). The reoffer yield of the Capital Securities is set at 5.75% and have a fi rst call date set in 5 years from the date of issu-ance.

The issuance constitutes direct, unconditional, unsecured and subor-dinated obligations by Burgan, the second largest conventional bank in Kuwait, with credit ratings of A3/Stable from Moody’s, BBB+/Sta-ble from S&P and A+/Stable from Fitch.

HSBC Bank plc and J.P. Mor-gan Securities plc acted as Global Coordinators, while NBK Capi-tal, Bank ABC, Citigroup Global Markets Limited, Emirates NBD Capital Limited, First Abu Dhabi Bank P.J.S.C., HSBC Bank plc, J.P. Morgan Securities plc and Standard Chartered Bank acted as Joint Lead Managers.

The issuance was well received by both regional and international investors, with the global order book peaking at US$ 2.2 billion, translating to an oversubscription of around 4.4x. MENA-based inves-tors dominated the deal with a 51% share of the issuance, followed by Asian investors at 22%, European investors at 14% and investors form the United Kingdom at 12%.

The issuance was undertaken to manage the Bank’s capital and long-term liquidity in accordance with Basel III and the Central Bank of Kuwait regulatory requirements.

The Capital Securities were priced at par (100.00%) with a com-petitive reoffer yield of 5.75% rep-resenting a spread of 400.7 bps over the 5-year US Treasury.

Faisal Al Hamad, NBK Capi-tal’s Chief Executive Offi cer stated: “We are incredibly honored to have advised Burgan Bank on this inter-national issuance. The signifi cant demand from local as well as global investors is a refl ection of Burgan’s solid track record in the internation-al debt capital markets and the con-sistent global demand for Kuwaiti paper.

Mr Rani Selwanes, NBK Capi-tal’s Managing Director and Head of Investment Banking added: “The overwhelming demand from Ku-waiti investors refl ects on the im-portance of the Kuwaiti market in supporting both regional and global issuances and refl ects on NBK Cap-ital’s ability to execute global trans-actions at the highest quality.”

‘Future success of banking lies in the hands of technology’

Financial institutions need to embrace FinTech: Al-BaharFollowing is the text of NBK Depu-ty Group CEO, Shaikha Al-Bahar’s speech at the Arab British Econom-ic Summit, London

❑ ❑ ❑

LONDON, July 6: Ms Shaikha Al-Bahar, Deputy Group Chief Ex-ecutive Offi cer, National Bank of Kuwait said that fi nancial technol-ogy is now a cornerstone of modern banking infrastructure and vital in remaining competitive and customer centric, ensuring retention and en-gagement in the current disruptive environment.

In her speech delivered at the Arab-British Economic Summit held recently in London, attended by gov-ernmental, business and economic fi gures as well as Arab and British business leaders, Al-Bahar empha-sized the importance of adopting to a rapidly changing world, and to em-brace FinTech as an opportunity to thrive, rather than tools to compete and survive.

Al-Bahar added that the future success of banking lies in the hands of technology. Banks must commit signifi cant investment into building state of the art infrastructure if they wish to keep pace with the sector’s accelerating trajectory, highlighting that some analysts go as far to pre-dict that IT investments should be as much as 10% of annual revenues as is the case of some leading global institutions.

■ Exciting Opportunities to Build and Thrive

“For a while there has been a growing consensus, especially in MENA, that banks must adapt, or else they will not survive. Our phi-losophy is the opposite. We do not view technology as a threat to tradi-tional banking services, but as a fl uid enabler of solutions to better service our customers.” Al-Bahar said.

She added that FinTech and Blockchain comes with the exciting opportunity to build and thrive. We must remain vigilant and proactive as we enter unchartered technologi-cal territory, rather than defending outdated mechanisms.

Acknowledging the importance of partnerships with non-bank FinTech players, Al-Bahar described it as an emerging trend that strengthen bank-ing architecture while true internal integration can occur, confi rming that this takes many forms, such as core IT upgrades to improve band-width and ranges to cyber-security resilience to combat rising online threats.

■ Competition Drives Innova-tion

Al-Bahar said that competition brings with it the need for innova-tion, therefore our aim at NBK is for our new initiatives to give us an edge against our peers. “We have invested in our consumer platforms to pro-vide better service experiences for customers, with new options such as selfi e pay, biometric cards and smart phone fi ngerprint identifi cation”. Al-Bahar said.

She added that NBK has recently implemented a new mobile banking platform for Egypt, Iraq, Bahrain, Jordan and the UAE, which ensures seamless banking transactions. On top of this, our joining of swift GPI and Ripple networks to ensure real-time international remittances across geographies, bolstering our global transaction offering, also demon-strates how leveraging new technol-ogies can create a remarkable cus-tomer experience built on reliability and convenience.

■ Adapting to the impact of FinTech is a process

Al-Bahar explained that making a bank competitive in the current envi-ronment requires informed decision-making on technology and a deep understanding of the forces at work.

She further detailed NBK’s strate-gy that identifi ed three main areas of focus: 1) the threat and disruption of technological innovation, 2) the fast-er pace of change in product and ser-vices enabled through FinTech, and 3) facilitating customer engagement through digital banking services.

Al-Bahar also emphasized the im-portance of demographic considera-tions as a vital element in providing relevant technologies and solutions in the GCC region. In Kuwait for instance, 63% of the population is under the age of 30. This popula-tion also enjoys one of the highest internet and mobile penetration rates in the world. In such economies, ad-vanced online and mobile banking is not a luxury, it is an integral part of the online fi nancial ecosystem.

■ Creating an infrastructure for enabling FinTech

Al-Bahar indicated that while re-investing revenue, regional markets are also building a sandbox regula-tory environment for new concepts and ideas to be tested. Banks should participate in this process to incubate

■ Competition creates innova-tion and our strategy is built on de-livering initiatives that emphasize our leadership

■ FinTech is an opportunity to thrive, rather than tools to compete and survive

■ The future success of banking lies in the hands of technology & banks must commit signifi cant in-vestment into digital solutions

■ There exists a wealth of op-portunity for investment in the Arab FinTech industry

■ NBK recently launched “Smart Wealth” digital platform to be the future of investing

■ Receiving accolades for ex-cellence in banking innovation is a testament to our own commitment

■ Kuwait enjoys one of the high-est internet and mobile penetration rates in the world, and mobile bank-ing is an integral part of the online n fi nancial ecosystem, hence the ne-cessity to provide innovative online services

■ Banks commitment to cus-tomers and shareholders drive the need to invest in FinTech and digi-tal innovations

and nurture programmes, including the likes of FinTech Hive in Dubai, FinTech Saudi in the Kingdom of Saudi Arabia and FinTech Bay in Bahrain. Similarly in Kuwait, the central bank has recently issued a regulatory sandbox framework for FinTechs. We have no doubt that the appetite for partnerships among the larger banks will propel operations and service offerings into the digital age.

She pointed out that regulatory

infrastructure must welcome both home-grown and overseas FinTech players to stimulate growth drivers across markets. Innovation is a key growth driver catering to a young and tech-savvy population. Younger customers will become early adop-ters of nascent technologies, such as AI and robotics, and will be ad-equately rewarded for doing so. It is in banks best interests to foster such relationships with key stakeholders.

■ Wealth of Opportunities Al-Bahar confi rmed that there

exists a wealth of opportunity for investment in the Arab FinTech in-dustry. It is remarkable to witness the progress that has been made and its implications for the industry. Powerful and relevant players are emerging, especially when it comes to payments and transactions. The recent London IPOs of Network International and Finablr, both of which are UAE-based businesses, are testament to that fact.

And similarly, NBK also had its own experience, investing in Smart Wealth, through our investment banking arm, NBK Capital. Smart Wealth is a digital end-to-end fi -nancial services advisor platform that we expect will be the future of investing.

“That is not to say that large banks should be competing in an arms race for FinTech partners. Investment in third-party ven-tures must remain measured and strategically sound. NBK’s adop-tion of RippleNet supports our e-remittance business, which holds great revenue potential and will undoubtedly improve service to customers”. Al-Bahar noted.

Moreover, she stressed on the fact that banks need to demonstrate seri-ous commitment to customers, share-holders, regulators and partners by investing in FinTech. NBK itself has received few accolades for excellence in banking innovation and payment services which is a testament to our own commitment. Our investment ef-forts do not end there – they are exten-sive and diverse in scope.

Al-Bahar concluded her speech at the Arab British Economic Summit by saying that: “Shifting customer needs and demographic changes re-mind us that we must continue to do the best we can, fi nding new ways to deepen our business landscape and grow the sector together as partners, not adversaries.”

■ NBK sponsors the Arab Brit-ish Economic Summit

National Bank of Kuwait spon-sored the Arab British Economic Summit 2019 organized by the Un-ion of Arab Chambers, Arab Brit-ish Chamber of Commerce and the League of Arab States and with the participation of British and Arab business leaders, corporate affairs and public policy professionals.

The summit highlighted the sub-jects most relevant to UK and Arab business, showcasing the broad range of projects emerging and un-der development within the Arab world with the purpose of promot-ing and strengthening cooperation among its members. It also offered invaluable opportunities for inves-tors, exporters, experts, consultants and providers of services to engage in dialogue with project leaders and decision makers.

The summit included valuable discussions about a number of key topics including: Challenges facing investment in the renewable energy sector, job creation, business cli-mate, diffi culties facing the invest-ments in the infrastructure sector, as well as ways to attract inward invest-

ment in this sector by discussing the vital role played by infrastructure in promoting sustainable economic de-velopment in the Arab world.

Another topic of discussion was focused on the MENA region as an important strategic hub for facilitat-ing trade between the UK, Europe and the new global markets such as Asia, in addition to the factors that make it most attractive to investors. Existing investment opportunities were pinpointed as the region ex-pands as a hub for inter-regional trade.

Participants also discussed the challenges facing the agriculture sec-tor and water security in light of the high population growth, considering to what extent the Arab world relies on imports to meet local demand for food produce and highlighted the investment and partnership opportu-nities as the region acts to develop sustainable agriculture.

The Arab British Economic Sum-mit is an exceptional opportunity to network with key players from all sectors and expand trade exchange between Britain and the Arab world throughout all major economic sec-tors.

Shaikha Al-Bahar

Faisal Al-Hamad

$500mn issuance received strong support from regional, int’l investors

NBK Capital acts as JLM for Burgan issuanceHelp for shadow lenders

India plans $10 billionbank ‘recapitalisation’MUMBAI/NEW DELHI, July 6, (RTRS): The Indian govern-ment on Friday announced a fresh capital infusion of about $10 billion into debt-burdened state banks and credit guaran-tees to support shadow lenders in a bid to boost lending and re-vive the economy.

India’s economy has sagged in the past year partly because many small and medium-sized businesses and consumers have found it tough to borrow from the banks, or from the shadow lenders, offi cially known as non-banking fi nancial compa-nies (NBFCs).

This is because some of the banks and NBFCs are laden with bad debt which has affect-ed their ability to lend.

Ecnomists, credit rating agen-cies and some of the lenders welcomed the moves, saying they are vital if India is to reform its banking sector and grow the economy at rates above 8% tar-geted by Prime Minister Naren-dra Modi’s government.

The economy grew at a rate of just 5.8% in the January-March quarter, a five-year low.

“The credit guarantee pro-vided by the government will further open up the liquidity line for fundamentally sound NB-FCs,” said George Alexander Muthoot, managing director of Muthoot Finance Ltd, one of the biggest non-banking lenders.

The injection of funds, which was disclosed in the annual budget statement delivered by new Finance Minister Nirmala Sitharaman, is the latest in a series over the past four years. More than 3 trillion rupees ($43.81 billion) of government money has gone into the banks in that period.

The state-owned banks, which control a majority of banking assets in India, have been weighed down by nearly $150 billion in stressed assets. The bad debts resulted from risky lending they pursued in the previous few years, particu-larly to infrastructure projects that then failed.

The government also an-nounced that it will for the next six months provide par-tial credit guarantees to state

banks that buy highly rated pooled assets from financially sound NBFCs.

To make this easier for banks, the Reserve Bank of India (RBI) announced later on Friday it would provide additional li-quidity to banks for purchase of assets or for lending to NBFCs. Authorities will also ease re-strictions on foreign institution-al investors that have invested in NBFCs’ debt securities.

Furthermore, the government said that in future NBFCs will no longer have to set aside addi-tional capital when selling their debt in public markets.

“NBFCs are playing an ex-tremely important role in sus-taining consumption demand as well as capital formation in (the) small and medium in-dustrial segment,” Sitharaman said.

India has nearly 10,000 reg-istered NBFCs lending to mil-lions of households who might not be able to borrow directly from a commercial bank.

While they might provide loans more easily, they gener-ally charge higher interest rates than the banks, often as high as 21-24% a year. Ironically, the NBFCs have in the past bor-rowed much of their money from banks, as well as mutual funds and via debt sales.

However, after defaults by one giant NBFC, Infrastruc-ture Leasing & Financial Ser-vices (IL&FS), last year the asset quality in the sector has come under greater scrutiny. As a result, the NBFCs borrow-ing costs have surged as many banks and mutual funds stopped lending to them.

Sitharaman also announced that the RBI will get much more regulatory authority over the NBFCs in proposed legislation that has been drawn up.

Currently, NBFCs are loosely regulated by host of regulators including market regulator - the Securities and Exchange Board of India (SEBI), and the Nation-al Housing Board.

“Structurally, it is a positive move as it will help in improv-ing supervision,” said Karthik Srinivasan, the head of fi nancial sector ratings at credit rating fi rm ICRA.

A photo from the Arab British Economic Summit held in London.