|
April, 2003 |
|
|
|||
|
||||
|
Interview |
|
"We're
trying to return to the origins of RBB"
Bruce
F. Henderson, a US national, has been the CEO of Rastriya Banijya Bank (RBB)
for the last two months taking the challenge of turning around this bank
which was declared "technically bankrupt" by the auditing firm
KPMG Barent. Henderson shares his feelings, plans and strategies about
his job in an e-mail interview with NBA. Excerpts:
Now
that you have been the CEO of RBB for over one month, would you mind
sharing with us the achievements that you and the new team of managers
have made so far? Since
joining RBB as CEO in mid-January, considerable effort has been spent in
forming a Management Team that has now been in place since February 20.
The six member team consists of three expatriates (experts in Credit,
Treasury and IT/MIS) and three senior Nepali professionals (Finance,
Audit and Human Resources). Together, we form the management committee
of RBB and report to the Board of Directors of the Bank. The management
committee meets formally once a week, together with the Chairman of the
Board of Directors and with senior staff invitees. The management team
has spent the past six weeks conducting due diligence to determine the
underlying problem in RBB and the possible remedial action steps
required, prior to presenting a management plan to Nepal Rastra Bank
through the RBB Board of Directors. In
your evaluation, how challenging is the target of RBB turnaround? The
turnaround of RBB is enormously challenging. The task involves both the
functional re-organization of the bank to enable the operating and
service departments to be more responsive to the needs of our customers
and of course, the restructuring and collection of non-performing
assets. How
long should the Nepali people wait before they start seeing the signs of
achievements in your efforts? I
would hope that the Nepali people would soon see the result of our
re-structuring efforts. We are trying to return to the origins of the
Rastriya Banijya Bank; that is to serve the needs of the Nepali people
by making productive loans and offer banking products and services that
will assist in developing the economy. What
do you identify as the most critical factor(s) that will influence the
outcome of the effort to turnaround RBB? There
are several critical factors that will influence the outcome of the RBB
turnaround. We will need the full cooperation of all stakeholders in the
bank as well as those former RBB customers who have left our bank in
recent years. It is imperative that we recover NPA’s; we will try to
re-gain some of the business activity of our former clientele that has
left us in recent years; and we will have to earn our former reputation
in the banking community by offering efficient and personalized service.
We are confident that we can achieve our objectives. Would
you mind sharing with us the basic points of your strategy to turn
around RBB? The
basic points of our strategy are threefold. First, we must energize our
staff which is the core asset of RBB. We will review every employee’s
background and banking experience to determine where their strengths can
be best applied within the organization and will re-train staff for new
positions and opportunities where necessary. Second, we will organize
our credit activities into two areas: loan recovery and debt
restructuring that will focus on returning capital to the bank for
productive re-cycling, and new productive lending that will seek loans
to enhance the Nepali economy. Third, we will automate our branch system
to provide better service to our customers and to mobilize deposits in
the branch system for productive application. How
are you going to address the problem of overstaffing and low employee
morale in the bank? The
issue of overstaffing will have to be addressed after the management
team implements corrective measures designed to stabilize the bank. Only
then can the “right-sizing” issue be determined and RBB will deal
with staff reductions at that time in a fair and expeditious manner. Is
there any learning from the experience of the international management
team that is grappling with almost similar problems in Nepal Bank Ltd.?
Is there any arrangement with NBL for sharing the resources and
information? You
are correct that RBB and Nepal Bank Ltd. have similar problems. We are
co-lenders in many of the same non-performing consortium credits and in
many credits we are the two lead banks. Both banks have approximately
the same number of branches (130) and staff (5,500). There is a strong
cooperative spirit between the two banks beginning at the CEO level and
continuing through all elements of our respective senior manager level.
Both banks are dedicated to serving the Nepali community while
undergoing a thorough restructuring and we share our experience in such
areas as Human Resource Development and IT/MIS that could result in
mutual cost reductions. RBB
is said to be stuck with some big borrowers due to the huge exposure the
bank has to these borrowers. How are you going to address this
situation? It
is well known that RBB is saddled with large NPA’s that will continue
to burden the bank until positive solutions can be developed. In order
to accelerate the process of recovery, we have established a new Loan
Recovery/Debt Restructuring Group that is committed to collecting
delinquent loans and restructuring NPA’s within the guidelines
established by Nepal Rastra Bank. Our efforts in this respect are
encouraged by the full support of the government as well as many debtors
who want to see the Rastriya Banijya Bank not only survive but to help
the bank regain its former status as an engine of Nepali economic
development. One
of the major steps taken by the bank after you assumed the office was to
issue a public notice declaring a prominent business house (Chaudhary
Group) as the defaulter on a very huge loan extended by a consortium led
by RBB. The Group has flatly refused the allegation. How is the progress
on this case? Shortly
before my arrival, RBB, as lead bank in a consortium loan, did serve
public notice to the Chaudhary Group for defaulting on a loan to the
bank consortium but I am pleased to inform that recent discussions with
the Group have been positive and we hope that we will arrive at a
satisfactory arrangement. The
management team in RBB is not as coherent as in NBL as the contract in
the NBL case was with a single organization but in RBB you as the CEO
and each of the other senior manager selected under the World Bank
Project are working on individual capacity. How handicapped do you feel
by not having the comfort of a single team as there has been in the NBL?
I must take exception with your assumption that management team at RBB is not as “coherent” as at NBL due to the fact that there is a single contractor at NBL whereas our team has been assembled from independent respondents to a procurement notice issued by NRB. Our team is comprised of three expatriate banking professionals, one of whom was a former General Manager of a major joint venture bank in Nepal, and three senior Nepalis, as with extensive banking experience – two are senior Chartered Accountants while the third is a retired career banking professional. Although we have only been together briefly, we have developed a strong cooperative spirit, interact as a team, and are dedicated to making this project a success. |
|
Cover Story | Editorial | Business News | Sectoral | Politics | Economy & Policy | No Laughing Matters Personality | Management | Legal Side | Corporate Focus | Interview | Stock Taking | Biztoon | Main | Past |
|
Send your feedback to the editor: bizline@mos.com.np |
