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UAE banks throw spotlight on risk managers

22 July 2008

Paul Clarke

UAE firms are taking pre-emptive measures to ensure that the carnage in the Western banking world doesn’t happen here: they're bolstering their risk management teams.

Local banks are battling with the twin forces of regulatory reporting requirements – such as Basel II – and the need to set up controls against banking crises and rogue traders.

Jamal Saleh, head of risk management at the Commercial Bank of Dubai, says: “Any problem, even with a small bank, would reflect on all of us and create a bad image for banks here.”

And with the influx of global banks into the region, local firms are feeling pressure to beef up risk management capabilities.

Aditya Malviya, an associate director at Arqaam Capital, says: “There is a lot of catching up to do for this region, but we’re learning fast.”

Abu Dhabi Islamic Bank is the latest to bolster its risk management capabilities, with the appointment of Masarrat Husain as chief risk officer.

James Stephenson, senior consultant at financial recruiters Hamilton Chase, says that a lot of banks are taking on senior hires, but the main hiring activity is lower down the pecking order.

“There are a number of team roles at associate and VP level – between five and eight years' experience. There is an interest from companies to hire people from the West because of the talent currently available.”

There’s still the problem of convincing chief execs to take on more risk management staff, who are rare and expensive – particularly Basel II experts, according to Rohit Kumar, head of credit risk and portfolio management at National Bank of Abu Dhabi.

Stephenson says that associate-level roles would pay $80k-$140k, with VPs earning $140k-$200k.

Comments (5)

  • A window of opportunity is opening for GCC banks to shore up their credit risk, compliance and audit functions. It's a matter of time before Arab banks feel the heat of int'l writeoffs. Remember that sub prime CMOs and related products are packaged and also sold o'seas! When year end reporting times are upon them, details of GCC bank holdings of such exotic products shall emerge. They must be prepared to also writedown declines in o'seas fund holdings since global equity markets and indices are in retreat. The end is not in sight! A light at the end of the tunnel is a wishful thinking rainbow. Yet; being safe and sound is better that sorry!  Strengthening risk functions is worth it. My point is that experienced, diligent and highly educated fin'l analysts are a rare breed. Credit divisions were not popular. Experienced credit risk, auditing, compliance and expats with broad int'l talent are a rare breed. Higher pay is not enough. Arms length reporting to Shareholders-Bd. Directors is paramount. Am earning in 15 days a: Branch Compliance Officer Certificate to supplement 38 yrs of:GCC-Int'l-Banking Practices. M. Hannoush-Mutual Funds/Private HNW Arab C'ltant-B.Sc-MBA-Montreal-Canada

    muradhanoush 29 Jul 2008

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  • Risk management techniques are read trhough the currculam of college but risk management is practiced through experience. As such a risk manager must have both the capabilities i.e. not only technical skills to analyse but hardcore experince to understand and visualise. Unfortunately, while hiring the sight get myopic and only traditional methods like present level, broad understanding are considered. Hiring a suitable risk person itself is a big challenge. Banks must understand that they not only need a person who know risk but also must have demonstrated implementation capabilities. The nascent stage at which majority of banks are there today they need more experienced people for which they must look beyond tradional scanning.

    gopal singh gusain 02 Aug 2008

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  • As banking industry grows up to find proper solutions to sophistigated and big deals, risk management , Monitoring,Audit , Fraud examining , Control specialists are all playing essential roles in mantaining the organizations they work in more safe.Experience learned us too much about risks sarrouding the organizations as control invirnment is ineffective .Risk managers should have high experience as well as high level of acknolege about the products ,market ,clients and also should be open up and down .

    sameko 19 Aug 2008

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  • We have to understand that the way we are managing risk needs to be revisited. With all fancy models and high paid risk professionals, the reputed and large banks are collapsing. Some professionals might brush it aside by citing the current problem as systemic one but it also throws light on the capabilities of our existing risk models and modus operandi. UAE shouldn't follow western model as it is. we need to focus more on control measures and also on Pillar II elements.Too much of focus on Capital calculation takes away the real issues. I hope the industry needs more risk managers of the type, who have the right communication abilities and are capable of bringing change in the existing set up in a smooth manner.

    drdnpandey 14 Sep 2008

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  • The last decade saw a benign credit environment in the UAE. Commercial banking relationship managers who started their careers during this era had never seen an economic cycle and are ill equipped to deal with the present market turmoil. This underscores the need for high caliber risk managers and risk infrastructure in local and regional banks.

    Khizer Pasha 5 days ago

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