Abu Dhabi Group should boost FDI inflows

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Sheikh Nahayan Mabarak Al Nahyan, chairman of the Abu Dhabi Group (ADG) has injected a positive signal into the Pakistani economy and the banking system by declaring that the group will stay and expand in Pakistan at a time when the country is trying to attract new foreign direct investment (FDI).

This declaration should help attract more FDI into Pakistan and reverse the present dismal trend. “I take this opportunity to reaffirm our commitment to all my investments, the employees and all customers in Pakistan to make all Group companies among the finest institutions. Let me affirm as well that there is no intention to merge or sell Bank Al-Falah at this time,” Sheikh Mabarak said.

The ADG itself now seems poised to do much better, as a result of the top-level management changes that Sheikh Mabarak has announced this week. Zohair A Khaliq, who has been appointed the new Executive Director of ADG, will represent the Group on the boards of Warid Telecom, Wateen and WinCom. Mr Naeem Zamindar will be the CEO of Wateen while Muneer Farooqui will stay on as the CEO of Warid Telecom. “Their focus will be on setting corporate strategies and policies, providing exceptional service to our customers and creating value for our shareholders in times of constant change. Their leadership will move our companies boldly into the future as an important part of the Pakistani economy,” the chairman said.

A solid commitment has been made that, in 2011, the ADG’s goal is to continue improving its businesses in Pakistan in order to ‘strengthen and broaden our ability to serve our customers and compete successfully in the market place’. The ADG has committed itself to providing necessary resources for the ‘highest quality of operations’. The appointment of the new management team reflects the group’s ‘commitment to the people of Pakistan that we will honour their trust with continued hard work and dedication’.

A top foreign banker also recently said, “Chairman Mabarak is greatly admired by the entire financial sector and business leaders, ranging from banking to telecom, and his social and welfare work that he has undertaken across the country over the last several years.”

Sirajuddin Aziz, CEO of Bank Al-Falah, contradicted recent speculative reports alleging that the Group planned to sell Bank Al-Falah, or merge it with some other bank.

Chairman Sheikh Mabark did not do so and he continues to be the chairman of the board of directors”.

The bank has opened 371 branches in the country. It has five branches in Bangladesh and two in Afghanistan. It plans to open 25 to 35 new branches this year. Al-Falah is already the sixth biggest bank in Pakistan.

In nine months, to September 2010, the bank recorded a profit before tax and provisioning, amounting to Rs 4.187 billion–up from Rs 4.182 billion in the like period of 2009. The profit and performance of the bank seems to be fine despite the banking sectors’ current business slowdown.

The group’s significance for existing foreign investors and those planning to come into Pakistan is described as ‘ major confidence booster for the Pakistani market, financial and telecom sectors and the economy’

The declaration by Sheikh Mabarak and Sheikh Hamdan should help kill all speculation regarding the ADG.

This is especially important because, over five months to November 2010, FDI inflow into Pakistan declined 21.5 percent to $ 573 million, compared to the same period of the previous year. But, besides the ADG’s positive declaration, will the government put its own act and policies together to attract more FDI and ensure profitability?

via dailytimes
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