Prime Bank Managing Director and CEO, Rahel Ahmed, on his early life, influence of his father on how he looks at life and works, how he started his banking career, his journey to the Managing Director and CEO of Prime Bank, the current state of Prime Bank's business, how Prime Bank's plan to diversify its business, why culture is critical for every organization, how team Prime Bank is working on building a culture of collaboration and teamwork, the future of Banking in the age of fintech and how Prime Bank is investing in technology to meet the demand of a changing market, the challenges for Prime Bank and its ambition going forward, why technology will improve the banking as a service, why empowering people is the best form of management, a few sectors he is bullish about, why leadership is all about setting examples for people to follow, and why we all should invest in building meaningful connections with people because people are opportunities, luck, and knowledge.
This was a much longer interview, so we had to break it up into two parts. This is the part one, please check us back later this month for the second part of the interview or subscribe to our weekly newsletter to get our stories directly in your inbox.
Thank you for agreeing to do this interview with us. Please tell us about your background and your journey to what you are doing today.
I was born the year Bangladesh appeared on the world map as an independent country to a government servant father and a housewife mother as their first child. I spent my childhood in Dhaka. I started my formal schooling at St. Joseph's Higher Secondary School, where I received a life-changing education. At St. Joseph's, we used to participate in a lot of extra-curricular activities starting from debate to scientific experiments to quiz competitions to sports and much more. I spent some of my best years at St. Joseph’s and the education I received there was critical building my character. I passed high school with a satisfactory result and then went on to Dhaka College for my higher secondary education.
I had a diametrically different experience in Dhaka College. The two years I spent there was exciting and fun. I was first introduced to student politics there. We used to bunk classes and join processions brought out by student political bodies. I did well in the HSC examination and secured the 16th position in the national combined merit list.
With that result, I sat for both 'Ga' (business studies) and 'Gha' (interdisciplinary/common) unit admission test at the University of Dhaka and stood second and third respectively. Finally, I decided to study accounting. As our first semester was coming to an end, a serious mishap took place at the university campus. Four to five students were killed in a clash between two rival political groups. I saw two of then getting killed. I was standing on the third floor of the arts building facing the Antorjatik Vasha Institute (International Language Institute) premises and witnessed the bullets hitting two bodies myself. The university was later shut down sine die as a result.
I was very moved by that incident. I soon realized that I don’t want to go back to the university. Instead, I applied to the University of Delhi and eventually got into the Shri Ram College of Commerce (SRCC) under Delhi University. It was one of the best commerce institutes in India at that time. Then I went to Delhi. Unfortunately, I couldn't continue my study because I was diagnosed with jaundice thrice within a period of three/four months. I had to consume a prescribed healthy diet and drink clean water all the time which wasn't possible for me while staying alone in India. consequently, I came back to the country without completing my degree. When I recovered, it was too late to enroll in any institution as a regular honors student. But I could attend the Degree Pass Course final exam as an irregular fellow which was about to take place in 4 months. I decided to pursue that path. I sat for the exam counting only on a few months' preparations and, luckily, passed with a good grade. My subsequent plan was to do a master's from the Institute of Business Administration (University of Dhaka). After my degree, I came across a job advertisement in a newspaper for management trainee officers at an international bank. The ad did not mention the name of the bank. It was only when I went to their office for my interview that I found out that it was ANZ Grindlays Bank.
Shelving my master's plan for the moment, I applied for the post at ANZ Grindlays. That was the first time I prepared a curriculum vitae and send it to them via postal service. I was called in for an interview after three-four months. The recruitment process took another four to five months to complete. ANZ Grindlays was, at that time, under the control of Australian and New Zealand (ANZ) Banking Group. Muhammad A. (Rumee) Ali (CEO, BIAC) - who was its Deputy CEO at that time, among other corporate icons - interviewed me for the job. I got the job and joined ANZ on April 1, 1995, along with twelve others, as an MTO. Thus began my career in the banking industry.
Before going further, I'd like to mention one particular story from my early life. Growing up, I was an introvert. It was a predicament for my personal growth as well. In 1992, when I had just returned from India, I got an opportunity to challenge my attitude through a volunteering experience at the SAARC Summit that took place in Bangladesh. I volunteered as a conference aid and was involved in managing various important aspects of the organization of the Summit. I learned a lot about leadership, team works, organization, and management. Around that time, I also joined a theatre school at Eskaton Garden, Dhaka. It was the first ever school of its kind started by famous theater personality Ferdousi Mazumder, Abdullah Al Mamun among others. Volunteering at the SAARC summit and learning theater performance helped me a great deal in overcoming introversion. I was forced to come out of my shell and talk to people because that was the demand of the both of the jobs.
I continued theater school till 1995 and when I joined ANZ Grindlays that was, in fact, the end of it and the beginning of my professional life. I was confirmed my position within the six months of joining. I was then transferred to the Chittagong branch to look after corporate banking there. I came back to Dhaka in 1998. I worked in many positions in the corporate banking department throughout my career at ANZ Grindlays. In 2000, Standard Chartered Bank acquired the entire global operation of ANZ Grindlays. As a result, we became the Standard Chartered official. Until 2004, I worked as the Senior Relationship Manager at SCB and then became the Head of Corporate. I had a wonderful run in SCB. I was CEO’s best performers for a few consecutive years.
I had always wanted to get an international experience in my career. In 2008, I came across an opportunity, left Standard Chartered in June and joined Emirates NBD Banking Group from July 15, 2008. I worked there for three and a half years before joining First Gulf Bank in 2012. It was a large Abu Dhabi-based bank where I worked in the debt market and syndication department.
During my years abroad, I always tried to keep abreast of what was going on in Bangladesh. I used to come to Bangladesh and visit my village home in the holidays. It appeared to me that a wave of development was sweeping across the country. And I thought that I need to contribute to the zeitgeist. I decided to come back. Around 2014 I came across an opportunity and decided to return to the country. I joined Prime Bank Limited as the Deputy Managing Director the following year. Besides managing the regular corporate banking portfolio, I was given the responsibility by the board to 'Business Model Restructuring and Centralization’ for Prime Bank. Prior to 2015, Prime Bank was operated under a branch banking scheme which resulted in prioritizing the top-tier corporate clients while under-serving the retail clients even at the Branch level. I brought this to the board's attention. I proposed that since we have a wide distribution network of 146 branches throughout the country, we could leverage it to serve retail and SME businesses that make up a large share of the market and is growing rapidly. It could also help our corporate banking operation where interest rates on loans are shrinking due to intensifying competition.
The board also wanted to centralize our operation. In the restructuring process, we had to redefine the way we do business with our clients and change how we operate. For that, we introduced the relationship model that is common in international banks. We created a wholesale banking model which deals with corporate banking. We were the first one to introduce transaction banking in Bangladesh which provides product and sales support to the corporate banking division. Our commercial banking has an added layer that deals within the mid-market, constituting of the mid-size corporations. To sum it up, after the restructuring, our entire operation was divided into three key layers: the existing corporate, and SME and retail banking; and the new transaction banking. Later on, we also revamped our SME and retail/consumer banking to make it more attractive to the customers.
This was the most significant period in my career. The entire restructuring process was a huge learning opportunity for me. The whole process took more than a year to come into effect. Afterward, I was promoted as the Chief Executive Officer of Prime Bank near the end of 2017. I am thankful to Almighty, my parents and my well-wishers who have supported me throughout my journey.
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How has your upbringing in Dhaka and your childhood influenced the way you look at the world and life?
I came from a humble middle-class family. My father exerted enormous influence on me. Let me tell a story about him that might help you to understand what I mean. He began his professional career as a government officer. When martial law was declared in 1982, he was removed from his position. Upon losing the job, he started a business; and also sued the government for wrongful termination. The legal battle stretched for more than 15 years and finally, my father won the case. He was reinstated in his job with compensation for the interim period. This is one instance that shows how resilient my father was throughout his life.
I am fortunate to have some of his qualities in my DNA. Whatever I have achieved in life, I would say that I have been resilient in the face of challenges. I’m not the kind of person who would give up without a good fight. You might find me temporarily down for a day or two, then I would put myself into work again. This is a lesson I learned from my father at a very early age.
My father was also very good at building relationships with people. Throughout his professional journey, he built a strong network of well-wishers. I admired that quality in him and tried to imitate it myself. But since I was an introvert in the early days, I wasn't always successful in doing that; until 1994 - I have told that story earlier. I’m resilient in nature and I find meaning in building connections with people and these things are connected with my upbringing.
Could you please give us an overview of Prime Bank in terms of products, and your operation and how you operate as a company?
From its inception in 1995, Prime Bank has grown a steadily over the years. We have always been considered as one of the leading banks in the country. In 2011, we were inches away from becoming the largest private bank in the country in the lead table. The next few years were not particularly satisfactory though. We hit a bit of a rough patch between 2012 - 2014. Some of the big defaults happened during this period and Prime was no exception to that. The downturn in the market had affected the Prime Bank as well. After that, we slowed down a bit, we went through a consolidation phase which I told you earlier. On top of that, we also initiated the business model restructuring process, a period when business was naturally slow. It is hard to push growth when you are in the middle of a restructuring. Business was as usual but we did not push much for the growth.
Sine 2017, Prime Bank has returned on track once again. We have accelerated our growth. A while ago, the share of our non-performing loans peaked at 8% which has come down to about 5%. We aim to bring it down to below 4%. That has also caused a little bit of slow-down. We are cleaning our balance sheet. That’s what our board also want us to do. We have taken heavy provisions in the last few years. We want to have a clean balance sheet and then grow from there. Our motivation is to ensure a sustainable growth. We are not looking at making a profit for the sake of profit or growth for the sake of growth, we want to grow sustainably. We don’t want to be number one or number two, we want to grow sustainably. Year after year.
When I assumed the position of the CEO of this bank, I told all my three and half thousand colleagues that I want them to help Prime Bank become the best private bank in Bangladesh. We set two goals for us: by 2021 let us become the best commercial bank in Bangladesh. When I say the best, I did not say that we want to be the number one bank in the country. We want to be the best bank where our corporate, retail and SME customers will prefer us over others. We have to deliver such quality of service that the customers prefer us over others. We want to be the most customer-centric bank. In order to achieve this goal, the philosophy I tried to propagate in the bank is one bank, one team; a rather cultural shift where everyone in the team collaborates and works as a team to achieve the single objective that we have.
We want to improve the collaboration in the team because at the end of the day you can’t achieve your result if you don’t have a great team. We are working hard to build a culture of collaboration where everyone owns the vision of the bank and works hard to achieve it. I have seen not only in our organization, in many other places as well, people work in silos. Especially when there is a competitive culture. Everybody is busy with achieving their own targets instead of working as a team to achieve a collective goal. For the last six months, we have been promoting a culture of breaking the silos and a culture of collaboration.
The message is clear, no matter which department you work, your job is to achieve the objective of the bank. Because you are not working for any department, you are working for the bank. Let us make sure that it reflects in our work.
We want to be the best bank where our corporate, retail and SME customers will prefer us over others. We have to deliver such quality of service that the customers prefer us over others. We want to be the most customer-centric bank in the country. In order to achieve this goal, the philosophy I tried to propagate in the bank is one bank, one team; a rather cultural shift where everyone in the team collaborates and works as a team to achieve the single objective that we have.
What have your strategies been to implement the 'one bank, one team' vision?
Communication was our most crucial concern. The existing culture creates silos and a gap between different levels of employees in the organization. To break out of it, we initiated something called Breakfast with the CEO where officers and employees of different levels from all around the country come to the headquarters and we all have our breakfast together. The breakfast sessions have been helpful in clearing up a lot of things for both parties and also sending a positive message.
We have set up an idea-sharing platform for everyone in the organization. We opened an Idea Mailbox where anyone could submit their ideas. It has received a huge response from our people. Initially, it was surprising to see so many brilliant ideas coming from different levels of employees. And we slowly began to implement the viable ones. This has made the employees believe that their opinion also counts and helped solve the communication gap problem.
The above are a few small initiatives we have implemented but we believe these small changes would have significant cultural impacts going forward. As a bank, we have convened an extended management team comprised of young employees who can give us a different perspective on management. We also have a new business process re-engineering team that is looking after the gradual improvement of every part of our operation.
The most critical challenge, for now, I would say is cultural, in the mindset of our people. We have been a predominantly corporate banking focused bank. Now we are changing that and expanding to SME and retail. The challenge is to make this transition smooth so that everybody buys-in to this shift and wholeheartedly contribute to the implementation.
In terms of product, what is going to be the strategic direction for you going forward? You mentioned earlier, you have been a predominantly a corporate banking focused bank and are now investing in growing your SME and retail business. What are the strategic priorities in terms of products and services?
Our corporate banking division has been doing a great job, thanks to the formidable team working there. We are capable of taking on any competitor now head-on on the product front. We are one of the few local private banks that have the same capability as the multi-national banks of providing services like export financing and CA financing. We have a strong position in corporate banking and we will continue to invest in the space to grow our business there.
At present, our focus is on growing our SME and retail business. The SME division has already been revamped and it offers almost all the services to cater to the local market. As for the retail division, we have big plans to bring changes to it and differentiate it in the market. Due to the confidential nature of the information, I can't give you much about the nature of the changes. I can tell you that the reshaping would occur taking into account the demographic shift that is taking place in Bangladesh. We have been working on some very interesting products which I hope will give us a competitive advantage in the market.
I have a couple of questions related to fintech and digital banking. Before that, what are the challenges for Prime Bank now and what challenges do you see in the near future?
The most critical challenge, for now, I would say is cultural, in the mindset of our people. We have been a predominantly corporate banking focused bank. Now we are changing that and expanding to SME and retail. The challenge is to make this transition smooth so that everybody buys-in to this shift and wholeheartedly contributes to the implementation.
Change management is a difficult job. You need to put in a lot of effort to get it right. Communication is a key part of it. So this is a major challenge for us. We have, to some extent, overcome it. But we have more work to do there. In order to succeed in this transformation, we have to make sure that every individual on the team owns it and buy-in into the new ambition.
So I would say that change management is the biggest challenge that we have. Other than that we have a great team and capable people who can take on any major project and deliver.
The other challenge, which I think is a challenge for everyone else as well, is how quickly we can understand the changes that are happening in the financial industry and respond to that change.
Do you have plans to develop any pure fintech product like an MFS or a payment product?
As I said, integrating more technology into our operation is a priority for us. I can’t give your details due to the confidential nature of the information but yes, we are working on a few fintech products.
At the same time, in the SME and retail space, we are trying to digitize each interaction with our customers. Technology can significantly improve the customer experience. To that end, we will be doing things that make the lives of our customers easier and better.
What are your priorities for 2018 and 2019?
We are going through a lot of changes at the bank, one of the priorities is to manage these changes effectively. As you can understand from our discussion, many of the immediate changes that we are focusing on are cultural in nature. Once you have the right culture, the rest is not that difficult to implement. We are promoting a culture of collaboration and team throughout the organization. We want to get these changes right and once that phase of work is done, it will allow us to run much faster than before.
Product-wise, we are diversifying and want to continue to do so. We are predominantly a corporate bank now and we are slowing making a progress in SME and retail. Growing our SME and retail business is a priority.
In short, building a culture of collaboration, creating more synergy within the bank, building a platform which is ready for the future, and diversifying our portfolio, these are a few things we want to accomplish in the next few years.
What sectors are you bullish about that you think would grow in the next couple of years?
The ready-made garments sector still looks very promising and will continue to grow in the near future.
I'm also optimistic about the agricultural sector which I think has huge potential.
The service sector has seen a rapid growth in the past few years. It will continue to grow as urbanization and purchasing power of people grow.
Pharmaceuticals has got immense potential. Our domestic market is well-covered by our local pharmaceutical companies and we are exporting as well. The sector will grow further in the near future.
These are some of the industries that I think have strong potential going forward.
It is hard to overstate the importance of having a network of reliable people for making progress in your career. The benefits of having meaningful connections with as many people as possible are many. People are opportunities, luck, and knowledge. If you observe your life you would see opportunities and luck come through people. Similarly, knowledge and information also come through people. If you know a diverse group of people, it is likely that you will come across diverse information, knowledge, and opportunities.
What does it take to be an effective leader?
I personally believe that one needs to walk the talk to be an effective leader. If you want to lead others, don't just talk. Lead by example.
Experience has taught me that resilience is an important trait of a leader. S/he should never give up. If you give up, those who follow you will be demoralized. By nature, leadership comes with added responsibilities. As a leader, you have to do more. You have to be more empathetic and more hopeful and in the face of challenges, you have to show the courage to move forward.
One of the important attributes we usually add to the description of a good leader is their ability to inspire their team. Now it is easy to attribute this ability to charisma or some other trait but in reality, people are more inspired by action. People would only follow you if they see that you are a doer, you take responsibility and you help people grow.
What are some lessons you’ve learned?
It is hard to overstate the importance of having a network of reliable people for making progress in your career. The benefits of having meaningful connections with as many people as possible are many. People are opportunities, luck, and knowledge. If you observe your life you would see opportunities and luck come through people. Similarly, knowledge and information also come through people. If you know a diverse group of people, it is likely that you will come across diverse information, knowledge, and opportunities. One of the most important lessons for me has been: invest enough time and effort in building a solid network. Meet with people, talk to them, listen to what they have to say and process it wisely.
Experience has taught me that resilience is an important trait of a leader. S/he should never give up. If you give up, those who follow you will be demoralised. By nature, leadership comes with added responsibilities. As a leader, you have to do more. You have to be more empathetic and more hopeful and in the face of challenges, you have to show the courage to move forward.
Interview by Ruhul Kader, Transcription Rahatil Ashekan