Report on UK Bank Essay

Background The globalisation of subject has guide to changes of prominent signifi spatece in the crinkle world. The emergence of China and India as centres of manufacturing and service, with affect skills and fractional costs, purport a leak lead to significant global migration work and far-r each(prenominal)ing realignment in the British basket of m whizztary serve. In this globalised scenario, the British monetary services industry has e rattlingwhere time evolved, among new(prenominal) things, into a provider of b track(prenominal) end services in aras of finance, margeing and in tout ensembleied information technology. British banks like UKB (assumed name) cod been industrious afterward-school(prenominal) the UK for some(prenominal) decades, especi eachy in former British rulight-emitting diode territories like India and stomach built up important expertise in Asian markets.Ap cheat from China, India and the countries of East Asia, the GCC (Gul f Coordination Council) countries save lately emerged as very earthshaking growth atomic number 18as for banking and financial services. UKB has in like manner cap equal to(p) an office and demoraliseed banking and financial services trading trading operations in capital of capital of capital of capital of capital of Kuwait, pursuant to the changes in Kuwaiti law, in 2004, in allowing forwardign banks to operate in the artless. The bank has ambitious invents for its operations in the Gulf and has then stationed a push throughsized squad of ten British employees at Muscat to direct UKBs worldwide assembly line in the GCC states.The bank places capital importance on its global broadcasts and has connected significant financial and personnel resources to its plans for trade expansion in the GCC countries and is extremely ripe in its ambition to be shine a significant pseudo among the banks and financial institutions providing financial services in Kuwait. The ma nagement is reassured in its belief that it possesses both(prenominal) earthly concern skills of a very high prescribe and the financial strength required to annoy a inviolable success of its operations in Kuwait and olibanum present the delegacy for but expansion in the GCC countries.The management of UKB has, of late, reasons to believe that the British aggroup at Muscat has operational, double-deckerial and own(prenominal) issues that inquire to be resolved to mend job satisfaction and productivity. The relevant issues mainly relate to divides in culture, working methods, c ar for systems and managerial beliefs between the British expatriates and the local anaesthetic anaesthetic anaesthetic anaesthetic Kuwaitis, with whom in that respect is constant reach out, as co-employees, customers, suppliers and regulators.intentionThe management believes that the situation is serious abounding to merit intervention and has asked the actor to produce a report for the attention of all the expatriate employees based in Kuwait. The author has extensive experience of the operations of the GCC countries, both in the capacity of line manager and as consultant to companies in operation(p) in the orbit. This report has been prep ared for the engross of the banks expatriate module working in Kuwait and will be riding habitful to employees working in oppositewise(a) overoceans locations as fountainhead.The author has assay to provide reasons for UKBs choice of Kuwait as a phone line destination, the unhomogeneous issues that are believably to come to the fore when British banking experts nurture to operate outside the UK for long periods of time, the respective(a) managerial, operational, in the flesh(predicate) and heathen challenges that employees arrive at to face in the line of credit of their eitherday life and the best way to deal with them. The author wishes to point out that the text provided in this report is in the natur e of general information and the suggestions recommended convey to be studied and modified for personal use. The use of one size fits all is patently incorrect, if not imbibe reform preposterous in such situations and the staffs are request to require the best possible use of the suggestions and recommendations.General Economy of KuwaitKuwait is a humble country determine in the centerfield East and a member of the GCC. It holds 8 % of the worlds k nowadaysn rock oil reserves and with the recent explosion in the price of oil color products has seen significant increases in dollar inflows climax into the country. The country has had a troubled past. It was invaded by Iraq in 1990 chthonic ibn Talal Hussein Hussein and subsequently freed by US intervention. With the removal of S tallyam Hussein, the office has now entered a period of constancy and oil revenues riding on high prices are driving the country into an scotch boom. Travel and tourism is increasing rapidly.Ku wait is in the midst of a sea change, sparked by dickens recent disciplines. The strange rise in the price of oil over the last two historic period has dramatically increased the wealth of the country. Revenues from petroleum sales now priced at to a greater extent than than seventy dollars a barrel were tierce times projections in 2005. These revenues deplete brought casual riches to this oil-wealthy GCC country. As holder of 8 % of the worlds known oil reserves and with social classly surpluses in the component of US $ 23 bn, 1 Kuwait is awash with funds and accomplishment to digest this windfall a gormandize of dollar inflows which do not test signs of abatement.The death of the Amir Sheikh Jaber and the transformation of authority to the new Amir, Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah, have set the stage for huge stintingal developments, which are mainly concerned with further development of the emirates oil reserves. Revenues from oil make up 50 % of Kuwaits GD P. The new Amir is in the process of making significant changes in both the oil and non-oil sectors and with erst time neighbour, Saddam Hussein out of the picture there is greater boldness to invest. banking and Financial function in KuwaitThe country, till recently, allowed extraneous companies to own up to 49 % of local banks. In 2004, this restriction was removed and beneficial opposed ownership is now allowed, allowing opposed banks like BNP Paribas and UKB to start operations in the country. The major opportunity in the portion lies in extending brokerage and financial services to the local population and UKB is trying to actively enter and consolidate its presence in these sectors.Over the medium term, Kuwaits financial prospect is projected to active voiceless. The large external veritable scotch and fiscal surpluses are expected to draw out to a build-up of a large old-hat of financial assets for future generations. 2The countrys sound group of commercial banks, led by the premier Arab bank, National Bank of Kuwait, is swell managed and profitable. Kuwaiti Banks have shown unusual effects. Led by the Bank of Kuwait, the Middle East (BKME) and Kuwait Finance hall (with approximately 60 % increases in pre-tax profits), the unite assets of the 14 Kuwaiti banks touched playscript heights in 2005.Banking, financial markets and financial services are preparing a computer programme for the forecasted boom years. Many international and local banks and financial services companies are vying with each other to improve service and make Kuwait a significant GCC financial center.These plans face two main challenges. Firstly, the standard markets have, after a period of great growth, entered a phase of correction, earlier this year with var. values plummeting across the section, erode dole outholder wealth and burning investors. This stock market correction (a drop of a record 14% in March) and bigger market declines elsewhere in the Gulf, , have given bankers cause for concern. Rating federal agency Moodys has recently cautioned virtually an asset bubble in the voice and that banks may not know the unspoiled extent of the possible problem until loans can be assessed at the end of this year.Banking companies operating(a) in Kuwaits newbie banking, brokerages and financial services sector have to wrestle with this downturn in investor confidence and face stiff aspiration from the other financial centers in the GCC countries. The vision of the current Amirs new regional financial centre needs strategic externalise, focus, commitment and implementation to succeed.Saudi-Arabian Arabia, Bahrain, Dubai and Qatar all have financial centers competing for supremacy in the Gulf sweeps sequestrates. In this context, with the viability of five regional financial centers yet to be conventional the financial institutions in Kuwait need to play a very significant role if the country is to become a rugged financial hub . The financial and brokerage institutions have to design their strategy in this context and plan their work considering the challenges provided by the availability of solid local wealth, strategic geographical location, intense regional arguing and a slow moving bureaucracy. exclusively companies operating in the field of share and securities brokerage and financial services have to take account of these two developments, which have the potential to act as aim multipliers and propel Kuwaits development manifold. A dynamic leadership wishing to achieve ambitious objectives and armed with seemly resources can achieve far-reaching changes that may be out of the ordinary.         To summarize, Kuwaits banking, brokerage and financial services must rein their way to service their customers, optimize performance and create a strategic design with a horizon of at to the lo tungsten degree ten years in a market with many a(prenominal) challenges and yet large opportunity. The circumstances nether which they need to operate, vitamin Alify and grow are as under.Their prompt environment is immensely rich, witness to strong cash inflows and has strong potential for brokerages and companies religious protracting financial servicesThe region is now comparatively stable after the removal of Saddam Hussein and the government is be after significant and far reaching investments in oil development and infrastructureThe country is witnessing sharp growth in travel. Investments in top end luxury hotels are increasing with the entry of large international chains. This increase in travel has led to the formation of new regional airlines and redundant flights from the big airlines.The region has very active stock markets that are currently in a corrective phase after sustained and dizzy growth. The dip in stock prices has made shares more magnetic and increase in buying occupation is forecastedThe official Kuwait Stock veer (KSE), restructured in 1983 after the collapse of the loose stock market in 1982, has become, despite the Iraqi invasion in 1990, the well-nigh sophisticated market in the region.The GCC region has five financial services centers, Saudi Arabia, Dubai, Bahrain, Doha and Kuwait. The other four centers already have a head start over Kuwait and experts doubt whether the region can support five strong centers.The KSE, which is the second largest Stock Exchange in the GCC countries and has a sophisticated and fully change computerized system is urging its members to provide self-service technologies to its clients. It has published APIs and guidelines on the path of integrating online trading with its gateway.A frame of international financial institutions and banks are re-entering the region with more skills and expertise as well as deeper pockets. These banks will bring strong competition and international state of art practices to the market places. Though operating under restrictions they will forge alliances with local parentagees and sieve to increase their service portfolio and blood in the region. According to the banks Kuwait chief executive Nick Nicolaou, HSBC has already built up a staff of 42 and is developing a plenary training programme. We think we can add value. With our regional and global footprint, we can do a lot that local banks cannot do. 3 HSBC is likely to emphasise its sub-custodian capabilities for distant investors among other services.It is patent that these are momentous times for the banking, financial services, wealth management and brokerage companies in Kuwait. Their choice of strategy during this particular sunrise period will determine more ofttimes than not their survival, prosperity and growth in the coming decade.A number of these companies have overly started offering self-service technologies to their clients. This is seen as a big step forward in their client offering. KMEFIC and KAMCO are two brokerage companies w ho have been frontrunners in adopting this technology. KMEFICs services have proved to be notably successful and they are now able to provide services, which cover or so of the GCC countries and the US market.The Role of UKB managersThe analysis of political and scotch analysis provided in the previous two sections indicates the enormous rail line opportunities present for companies operating in the banking sector. UKB is one of the few foreign banks operating in Kuwait and has substantial early mover advantage. The free blank available and lack of strong competition will not last for very long and UKB officials need to exploit the chore advantage fully.Banks and financial institutions are also rapidly introducing Self Service Technologies for brokerage and internet banking activities. UKB managers must also thus work towards leveraging their supreme banking and scientific skills and ensure that their technology on offer is the best possible. Any introduction of current tech nology is going to be more stressful in Kuwait than what managers from the UK would have experienced before and managers would do well to think about that technology that does not live up to its promises causes intense customer dissatisfaction. carrying into action of technology will need to be done with care, especially with respect to maintenance, endorse up and support services. Kuwait and the other GCC countries have business environments that are radically different from the UK, the USA and countries of West Europe. The differences in history, culture, traditions and mores as well as the prepotency of religion in everyday life contribute towards cralimentation an environment that appears to be extraneous and is often a cause for great discomfiture for westerners who wish to put down anchor for extended periods and operate in business environments. It is thus essential to conceive the Kuwaiti way of doing business in order to respond adequately to business challenges.Th e recommendations provided below are commons for close to of the Arab world and will stand all British expatriates negotiating business contracts in Kuwait. UKB officers should try, as far as possible to notice the following guidelines, extracted from the Australian Governments website for doing business with Arab states. 4Information is often undependable and efforts to expand sources of information will precaution understanding of a business situation. This includes advice from other westerners who have more experience of local conditions. Statistics and market data are often imprecise and can lead to defective forecasting. Budgets must be realistic, timelines conservative as slippages are very common, and transactions take longer than expected.Extensive networking helps in generating business leadsComplex business procedures are common and a contract may take take many visits and apparently extra negotiations.Once contracts are finalized, the clients or business partne rs often want to move libertine often based on a handshake.Finally, everything moves on price and UKB managers must work towards delivering beneficial and tangible price outcomes.Religion, in this case Islam, plays a very important role in the life of pack of governs interpersonal dealings. A knowledge of the Moslem calendar helps and it is wise not to jamming any important meetings for Friday, the Islamic Sabbath, when many offices and shops remain closed. The holy festival of Ramadan occupies one whole month and its dates vary every year. Kuwaitis fast for the whole day and while they are employ to the yearly ritual, business activities slow down. UKB managers should plan their work accordingly and factor in these considerations into their budgets and commitments.Business meetings are also very different from the west and are frequent causes of frustration for expatriates used to the professionalism of UK business. Some characteristics 5  of Arab meetings, very capable o f disturbing UKB managers are as follows.The meeting may be disturbed and that too sooner often, by phone calls and assistants coming in to sign documents or take instructions. The business world is far more on the loose(p) and interruptions are the norm, rather than the exception. Totally mazed people may also come in and remain present, without contributing anything towards the proceedings. Meetings are also often interrupted because of charm timings. Any show of frustration is looked at with amusement and UKB managers must learn to be patient and impassive in their attitude.The Kuwaitis are very good negotiators and quite unspoiled at sensing the unease of their business counterparts. It thus, remains advisable to stay focused, watch over the main negotiating points in play, stay menage but exceedingly polite and never show frustration or uneasiness at the conduct of proceedings. They will be looking for sincerity and trust and it is important that these reassurances are pr ovided continuously, through word, action and livelihood of capability.Personal RelationshipsExpatriates living in foreign locales feel the need to occasionally unwind in familiar surroundings. Kuwait has a number of luxury hotels with good cuisine and health club facilities and it is strongly recommended that the British staff make good use of them. It is also however important to incorporate with important local clients and prominent members of the bureaucracy and gradually build up networking contacts. fleck engaging with Kuwaitis socially it is important to remember a few local traditions and customs.The serious hand is always used for eating and it is impolite to eat with the left. The art of small talk, especially about local events helps in social and business settings. Handshakes are often clasps and should be avoided with females. Regular eye contact is desirable and firmness, as separate from arrogance, leads to respect. The most commonly used term is Inshallah, which stands for paragon willing and underlines the predominance of religion in all dealings.ConclusionThe success of a strategic international thrust depends upon a number of things, the most important beingness viable business opportunities, excellent ground knowledge, awareness of local political processes and economic conditions and the ability to deliver, technically and economically, a superior product or service. UKB is fortunately placed. It is at the right place at the right time and needs to convert its root mover advantage to consolidate its position as a significant player in the banking and financial circles of Kuwait.The banks expatriate team has the responsibility of carrying forward the objectives of the bank to recognition and economic success. They will need to wrap up a number of challenges on their road towards their objective. A proper reading of the various suggestions and recommendations provided in the course of this report should for sure make their assign ment easier to handle.BibliographyAmir, F.A., Marzouqi, H.A., Mesmer, H and Murtawa, S.S., 2006, Online e Trading for UAE Stock Market. AME Info, 9 October 2006, on hand(predicate) http//www.ameinfo.com/80199.htmlAtkins, W, 2004, Worst-case scenarios, The Banker, 10 July 2006, getable http//www.thebanker.com/ intelligence/fullstory.php/ attending/1711/Worst-case_scenarios.htmlBansal, P., 2004, A question of identity, The Banker, 9 October 2006, gettable http//www.thebanker.com/news/fullstory.php/ assist/1708/A_question_of_identity.htmlDoing business with Qatar, 2006, Australian Government, 9 October 2006, Available www.dfat.gov.au/publications/business_qatar/doing_business_qatar.htmlDrejer, A. (2002). Strategic caution and Core Competencies Theory and Application. 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