Founded in 2007, Burj Bank – formerly known as Dawood Islamic Bank – has a distinguished history, spanning more than five years, as a central pillar of Pakistan's Islamic Banking landscape. In 2011, Burj Bank's board of directors became concerned about the slow growth and concentration of the bank's financing portfolio in areas of the economy that were showing signs of strain.
At this time, the major shareholders of the bank initiated a re-profiling of ownership and subsequently a rebranding. On 11th July 2011, the bank was renamed and launched as ‘Burj Bank Limited', following a massive capital injection by some Middle Eastern investors of the bank. At present, almost 85 percent of Burj Bank's shareholding stems from the Middle East, with majority ownership belonging to the ICD, Jeddah (Group Company of the Islamic Development Bank). Other primary shareholders are Bank Al Khair from Bahrain, Gargash Enterprises from the UAE and Al Romaizan from Saudi Arabia.
Making a difference
In November 2011, Ahmed Khizer Khan – the former Chief Operating Officer of ICD (Islamic Corporation for Development of the Private Sector) and the Chief Executive of Barclays Global Retail and Commercial Banking for Emerging Markets – was brought in as the President and Chief Executive Officer of Burj Bank to turn it around.
Mr Khan, who had been closely governing the bank as the Chairman of the Board's Executive Committee for nearly three quarters, brought with him thorough experience of various markets, combined with immense turnaround expertise.
[Burj Bank's] operations have been centralised, compliance and control… have been strengthened, and a strong service culture has been introduced
The leadership team had challenges ahead of them, and went to work immediately to revitalise the corporation, turning it into a profitable entity. They had numerous tasks ahead of them, and had to keep multiple synchronised streams of work moving simultaneously to be successful. They also had to stabilise the bank immediately, and stop any fallout from credit losses and inefficiencies. They had to refocus the vision and strategy of the bank in a way that its internal and external stakeholders – employees, customers, creditors, investors, and regulators – could readily understand and support.
The team had to recapitalise the bank, not simply to make provisions for financing losses but also to position Burj Bank appropriately in order to leverage and create brand value. They had to rebuild the management team using the right mix of fresh talent that would work well with the knowledge and experience of the existing team members.
A new set of goals
A month later, a plan was in place that consisted of a number of basic tools to set the bank in motion towards achieving new heights. The management team, consisting of old and new members, started their days at six in the morning and typically worked 60-hours a week for months.
The entire team met regularly for three reasons: to ensure the necessary two-way communication throughout the bank at all levels, to eliminate the traditional lack of an aggressive nature among individual managers one level down from the senior managers, and to build trusted teamwork among the entire senior management team.
The experienced turnaround architect – Mr Ahmed Khizer Khan – also acknowledged the value of being nimble and moved swiftly in a crisis situation. Getting his inspiration from Mohammad Ali Jinnah – the founder of Pakistan – Mr Khizer strongly believes in the words of Jinnah, who said that “I don't believe in taking right decisions, I take decisions and make them right”.
Together with other executive committee members, they made decisions quickly and didn't agonise over them once made. To move at the speed required, they also recognised that while they would make some mistakes along the way, it was part of their management process. As a team, they could fix mistakes later and learn at the same time.
Working together
In order to be successful, the senior management team needed the full confidence of Burj Bank's Board of Directors, as well as its regulators. They held quarterly board meetings, relied heavily on a strong audit committee and stringent processes, and worked hard to ensure excellent communication with the board and major shareholders.
By the end of 2012, Burj Bank had progressed sufficiently and successfully. In just 12 months, the Bank grew its deposit base by 77 percent
By the end of 2012, Burj Bank had progressed sufficiently and successfully. In just 12 months, the Bank grew its deposit base by 77 percent. Their financing portfolio also reflected a growth of 67 percent. The bank became transformed from a loss-making business into a self-sustainable entity from the perspective of its shareholders. The branches grew from 50 to 75, reflecting a percentage distribution network growth of 50 percent.
Within the retail business, the bank successfully inducted a strong business development channel, and converted its car financing product – Carsaaz – into a market leader, and also established the Takaful business. In corporate banking, a rich portfolio of clients were added and dedicated corporate branches were opened, which nearly doubled the asset book.
The bank's global markets and advisory business was strengthened further, becoming the backbone of profitability. Focusing on its customers, products, distribution network and service delivery, 2012 was the year in which the bank laid the foundation for a sustainable profitable future.
Its operations have been centralised, compliance and control mechanisms have been strengthened, a strong service culture has been introduced, human capital gaps have been filled and systems have been revitalised.
During 2012, Burj Bank's core banking implementation was completed in record time. It also launched Pakistan's first Islamic Debit mastercard. 2012 was the year in which Burj Bank became a strong consumer brand in the country. The bank has entered into diverse new lines of business including SME (small- and medium-sized enterprise) banking, investment banking, agricultural financing, cash management and home Musharaka. The transformation of Burj Bank is one of the most successful stories of the financial world of Pakistan.
With a vision to be “the Islamic bank of choice”, and a mission “to provide innovative and efficient Islamic banking solutions to exceed customer expectations and optimise shareholder value”, Burj Bank pursues an ambition of reaching new heights and achieving distinction in Islamic Banking by becoming a symbol of prosperity, progress and success.
