Michel Accad reflects on 40 years in Middle East banking

  • 13th, February, 2020
Michel Accad reflects on 40 years in Middle East banking

A few weeks ago, Michel Accad retired from his position as CEO of Al Ahli Bank of Kuwait, bringing to a close more than ten years at the top of Kuwaiti banking, first as CEO of Gulf Bank and then as CEO of Al Ahli. Michel had arrived in Kuwait from Arab Bank, where he led the global banking business; and Citigroup, which he joined in 1979 after taking his MBA from the University of Austin, Texas, and where he rose to become Managing Director for the Middle East and North Africa.

The Arab Bankers Association spoke to Michel Accad about his career in Middle East banking and asked him whether he has any advice for young people thinking of embarking on a career in Middle East finance.


 ARAB BANKERS ASSOCIATION: How has Kuwaiti banking changed in the last ten years?

MICHEL ACCAD: The digital channels are more developed now, with better on-line banking and mobile banking penetration, but the structure of the banking system has remained the same and there is the same number of banks as ten years ago. Most Kuwaiti banks have a dominant shareholder, often a single family, and this makes mergers and acquisitions difficult, since dominant shareholders do not want to see their control diluted. 

The Kuwaiti banking system is also very heavily regulated, which may be fine, but sometimes it does slow the pace of innovation. It’s a shame that, so far, no Kuwaiti bank has developed a purely digital offering, as some banks in the UAE have done, but that may be a reflection of the demographics of Kuwait compared to those of, say, Dubai where the demand for digital banking is higher.

Looking beyond Kuwait, what do you think are the opportunities for GCC banking as a whole over the next few years?

There is a big opportunity in the digital space, as I mentioned earlier, but there are also opportunities for GCC banks to diversify into riskier markets that offer healthy margins and good opportunities for growth. Egypt is a good example. Within the GCC, some business sectors, such as SME finance and residential mortgages, present good prospects for growth and also different risk/return profiles from traditional commercial banking and retail banking. 

We have seen a lot of M&A activity in the GCC over the last two or three years, and this has led to the creation of some banks with considerable capital resources: First Abu Dhabi Bank and Abu Dhabi Commercial Bank in the UAE are examples, but there has also been the merger of Saudi British Bank and Al-Awwal, bank mergers in Qatar, and we are expecting the merger of Kuwait Finance House and Ahli United Bank. The hope is that these newly enlarged banks will use their capital strength to expand into new areas, either geographically or in terms of products and business lines.

Looking back over your 40-year career in Middle East banking, can you pick out any particular highlights? 

There are a few, from different stages of my career. 

I am proud to have been leading Al Ahli Bank of Kuwait (ABK) as the bank began to spread its wings outside Kuwait. We bought Piraeus Bank in Egypt in 2015 and that has turned out to be a very good acquisition, greatly diversifying our earnings profile and offering excellent opportunities for growth. We also opened an office in the Dubai International Financial Centre to develop regional structured products and corporate finance, building on what had previously been a rather limited operation in the UAE. About 25% of ABK’s business is now outside Kuwait, and we are hoping that this will increase further as a result of the faster growth in Egypt and a small acquisition that we are planning in the UK – we are in the process of seeking regulatory approval for that right now. 

I am also proud of the work I did at Gulf Bank following the Global Financial Crisis. When I took over the bank in mid-2009 it was facing a number of problems, both financial and non-financial, and our back was against the wall, but we were able to rebuild the business processes, regain trust, and restore profitability.

During my 27 years at Citibank, one of the highlights was becoming the first head of a unified Middle East and North Africa Region – previously Citi had divided the region into different areas, for example between ‘Middle East’ and francophone ‘North Africa’, but I was asked to bring the franchise together, and we found a lot of regional synergies and built a coherent pan-regional business, contributing over $1 Billion to Citi’s revenues.

On a more anecdotal note, I am surely the only expatriate banker working for Citi to have been emergency-evacuated twice from the same country! In 1991, I was in Zaire (Congo), and my family had just arrived to join me when civil unrest began, and we all had to leave in a rather dramatic fashion. But I returned soon after, on my own this time, to manage and downsize our business there, but nine months later there was more unrest and I had to leave again! But these were interesting times – one of my key executives later became Governor of the Central Bank of the Democratic Republic of Congo, and we’ve remained in contact for several years.

Would you advise young Middle Easterners, starting out on their careers, to follow your path and begin a career in banking?

That’s a difficult question. Many decades ago, commercial banking was quite a dull business, and then with the growth of investment banking it became quite exciting. Now, I fear, it is – in some respects but not all – becoming a bit dull again. I think the exciting areas of banking lie in digital products, the use of artificial intelligence, big data, and new payment systems – essentially bringing technology into banking. But plain vanilla commercial banking – managing corporate accounts, trade finance, retail lending – that is all so heavily regulated these days that it is not as much fun as it used to be. 

So, a young person contemplating a career in banking should think carefully about what aspect of banking and financial services they are interested in, and what skills they will be bringing to the industry. In the GCC, banking is still one of the biggest employers, alongside government ministries and the oil industry, and it is likely to remain so. There are plenty of good opportunities to do interesting work in banking, and to be paid well for doing it, but those opportunities are going to lie in different places to they did when I started out with Citibank all those years ago.

What are your plans and what do you intend to do next?

Well, initially, I just wanted to retire – pure rest and relaxation! I love to listen to music, especially modern instrumental music, and I love to read, mostly science-fiction books. I also like to read books about the universe, time and stuff like that although the more I read about it, the less I understand it! But it’s such an eye-opening experience to discover how little about our universe we actually know…

Unfortunately, those plans for retirement are currently being deferred, as I have been asked to join a major Lebanese bank, that has recently lost its CEO, to help it weather the current confidence crisis. All Lebanese banks are in a critical situation today, and they all face massive, life-threatening challenges like they’ve never seen before. I don’t know whether anyone can make a difference at this stage, but we will have to try. So there goes my rest and relaxation!