Sunday, January 11, 2009

Ibrahim Nasir - 10th CEO Series of Talks

On Thursday, went for the 10th CEO Series of Talks. It was a talk by Ibrahim Nasir, CEO of Societe-Generale Investment Bank for Malaysia and LOFSA.

Ibrahim shared with us on the company's business, where they were looking at financing for aircraft/oil & gas, hedging for planes/ships etc.

He has an illustrous career working for 6 companies, spanning over 20 years, with 3 international banks (Soc-Gen, Deutsche, Bank of America, Bank Bumiputra, Bank Islam and one more that I can't recall).

He first spoke of various regulators in Malaysia, eg: Ministry of Finance, Central Bank, Security Commission, LOFSA, Bursa Malaysia, Companies Commission.

Some of the ideas that he talked about:-
1. Since 1998, most of our banking setup are similar to Europe & US, where we have huge holding banks.

2. Most of the problems of banks now are due to Investment Bank, where shareholders' fund drops and there is a need to inject more capital.

3. Soc-Gen fraud of 5 Billion Euro in 2007, due to derivative trader who created fictitious buyer and seller. The trader was formerly with 5 years of experience at back office, so he knew a work around.

4. He spoke of US Interest Rate fluctuality, where it is now lowest for 70 years, whereas a short while ago, it was the highest in 20 years.

5. Just a few months' back, people were more worry about inflation, with crude oil and other commodity prices very high.

6. He spoke of high cost for deep sea off shore oil production and at current price, there is no incentive to produce more oil.

7. Financial system was vulnerable, as Investment Banking product were intricate and highly leveraged.

8. A lot of domino effects, where if one counterparty is affected, its other counterparty is also dragged in and this spreaded.

9. For Malaysia, we are expecting slower growth in 2009, and that could be a cause of concern, as we are developing nation with solid population growth etc. So, the GDP needs to grow healthily, for all of us to be happy.

10. Some analysts are predicting that Malaysian government might issue a USD-bond soon.

11. Ibrahim's advice to aspirant Investment Bankers to join international banks for 7 to 10 years to gain experience, before coming back to join more senior positions in local banks. And hopefully, would have real reporting, where reporting goes to the people who work in the same function and know about it, rather than matrix reporting.

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