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Amwal was formed in 1998 as a financial planning firm for the women of Qatar under the patronage of HE Shiekha Mozah, the wife of the Emir of Qatar. As a result of Amwal’s success and reputation it was transformed into a fully licensed investment bank in 2005.
Amwal, like most of the investment banks and asset management firms in the region, has benefitted from the unprecedented economic growth, high oil prices, and surplus wealth. The GCC countries are expected to grow over seven percent in the next five years. Qatar is one of the top GCC countries in economic performance. As such, Qatar’s economy is expected to grow 13% in 2008 as a result of sustained oil prices and the country’s ambitious gas industrialization initiatives.
Following Russia and Iran, Qatar has the world’s third largest gas reserves. In terms of energy, these reserves are expected to last for more than 200 years. This growth is not temporary in nature and is expected to continue over the long run. During former U.S. Federal Reserve Chairman Alan Greenp’s recent visit o Jeddah, he was quoted saying that the oil boom would “go on forever”.
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All of these factors have resulted in a mushroom effect on the growth of different kinds of financial institutions in the region. Existing banks are expanding rapidly, new banks are being set up, and many international players from US, Europe, and Asia are setting up shop in this region. In the last two years nearly 280 financial intuitions have surfaced in Qatar and the United Arab Emirates (UAE).
In the current market scenario, I believe that Amwal will face the following challenged as it strives to become a world class investment bank: Carving its own identity and differentiating from its regional peers
Amwal has a very strong shareholder base that includes prominent local and regional organizations. For this reason Amwal’s identity sometimes is overshadowed by affiliation with one of its shareholders in the multiple transactions that Amwal actually facilitates. As a new investment bank Amwal leveraged its shareholder base to its benefit. However as we grow it is imperative that we carve out our own identity that will build a strong brand recognition in the region. This is important because it will help Amwal to differentiate itself from its regional competitors, who often operate on similar grounds and similar strengths. This will occur over the mid to long range period as Amwal builds on successful deals, takes steps to increase social responsibility, and invests in its employee resources.
Competing with global names such as Deutsche Bank, Morgan Stanley and Goldman Sachs
Due to economic growth and initiatives to develop the capital markets, GCC countries have been successful in attracting global names such as Deutsche Bank, Goldman Sachs, Morgan Stanley, Barclays etc. This presents a unique challenge for a local bank like Amwal to remain competitive due to its relative inexperience as compared to the multinational investment banks. GCC countries have embarked on a major capital expenditure initiative, developing their infrastructure and other major projects. Qatar alone will spend over $100 billion(U.S.) over the next five years. This will help to position Amwal as a local expert with global capabilities.
Hiring and retaining key staff
Due to the spur in new market entrants, banks are competing for the best human resources and often find themselves short of a healthy bench-strength. This has been mainly due to the high turnover, shortage of seasoned professionals, and a general preference to employ western educated professionals with regional experience. This problem is more prevalent for local banks with limited resources.
These local banks are rely heavily on key staff such as the senior manages of investment banking and asset management. Amwal is not immune to this problem and has recently developed a policy of retaining good employees and encouraging its staff to develop further expertise by sending them for training and allowing time off from work for academic studies. Amwal will face a key challenge of retaining staff and hiring more professionals due to circumstances beyond its control including regional factors such as increased competition and the higher cost of living.
Need for a better corporate governance
Another challenge is creating the right balance of power and accountability between the board of directors, senior management, shareholders, and internal operating departments. Amwal has grown tremendously over the last few years and is now planning for its own Initial Public Offering (IPO) early next year to support its current growth and future goals. During the initial years of operation, Amwal’s management style was very centralized with authorities and powers limited to a few key individuals. While this is very common among most local and regional institutions like Amwal, this structure usually leads to a financial and strategic gap upon the exit of these key individuals.
Amwal has come a long way since its transformation into an investment bank and have developed business policy principles, guidelines, internal and external regulations and monitoring mechanisms. However, as we continue to grow, expand our global reach, and prepare for the IPO, I believe these measures would need to be constantly reviewed and enhanced as they are critical for conducting proper corporate accountability and enhancing business prosperity. Another prevailing impediment is the lack of proactiveness of the local governing bodies that need to substantially enhance the regulatory framework, develop stricter industry guidelines, and encourage transparency. As an industry leader, Amwal is in a unique position to have a positive effect on the creation of the regulatory industry in the region.
These observations are not only unique to Amwal. Since we are in a constantly changing environment it is critical that local and regional institutions identify these challenges and develop a strategic plan to respond to them. I believe that Amwal is well placed and uniquely positioned for this challenge with its sound business model and comprehensive long range strategic plan.
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Key issues facing my organization over the next five years. (2017, Mar 01). Retrieved from https://phdessay.com/key-issues-facing-my-organization-over-the-next-five-years/
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