- Winston SillHill
Barbara Ellington, Features Co-ordinator
AT 52, National Commercial Bank (NCB) Managing Director, Aubyn Hill, has lived and worked in the financial sectors of nine different countries and has an enviable track record of resuscitating troubled financial institutions.
Armed with an MBA in Finance and Marketing from Harvard, Mr. Hill was recruited by the National Bank of Oman, 10 days following the July 1991 collapse of BCCI, a 40 per cent owner of that institution. He became the bank's chief executive officer and general manager, with responsibility for co-ordinating the recapitalisation and restructuring of the bank.
Under his 11-year management, the Bank of Oman became the largest bank in terms of business in the country until the merger of two competitors before he left.
The busy banker who is married with two children, likes to be in the office by 7:30 a.m., and may stop by any branch for a visit some afternoons. He still has shares in the Bank of Oman and in his spare time, Mr. Hill is an avid reader; he also likes to play tennis.
He was recruited by NCB's Chairman Michael Lee Chin to head the bank and, in his first interview since taking up the position, Mr. Hill spoke with The Sunday Gleaner about his plans for making NCB a leading financial institution, vision for the staff and reasons for returning home.
Q: Tell us who is Aubyn Hill, where you were born, where you attended school, are your parents still alive and do you have siblings?
A: I am from Southfield in St. Elizabeth. I attended Top Hill Primary and Munro College, with the class of '68. Both my mother and step-mother are dead, but I was privileged to have my stepmother raise me since age seven. My father is alive and is now 81 years old and in good health. I have five siblings - three sisters and two brothers.
Q: How were you recruited for this job and given your marketability - why did you return home? Are you just here until you are offered the next "plum" job?
A: There is a magazine in Oman called Business Today and for three consecutive years, an independent party carried out a survey for the best CEO in the country. I won it three consecutive years from its inception; the third year I was on the cover of the magazine for that achievement. Someone here in Jamaica saw it and sent a copy to Michael Lee Chin in Canada telling him he should meet me. A meeting was arranged in July and we began talking and never stopped. That's how we met.
I had many carrots on the way here but I chose to come back. I'm either going to stay in banking or help the country in some way but I'm making my nest here at home. My two children are in school, my son is nearby in Canada, daughter here, I'm not going anywhere.
Q: What surprises have you encountered both at the bank and in the country since returning home?
A: I spent a total of 30 years abroad but have been coming back for the last 20 years now so the surprises are not many. But I sense that with all that happened around us in the 90s, we don't seem to have a high sense of service. People still feel it's obsequious or servile to serve. I tell my staff I am servant number one; these are my customers and when they are not happy I will be fired. I carry that message wherever I go.
I have done business in over 55 countries, lived in about nine all over the world, and it surprised me coming to this airport, that it's the worst experience I've ever had. I cannot understand why as a tourist destination we would invite people to spend their money with us and treat them this way. People wait three or four hours for nothing. There are other ways.
How much money are we wasting? How much contraband have they found? If there are other ways that other governments do it properly, we should find out and do likewise.
Last week we had to clear a container for NCB and it took a senior executive so much time to get it done and I don't understand why if your goods are as they say on the bill of lading, why can't you just pay your money and take it out?
At NCB it surprised me that the bank still managed to function after being in the situation that it was. It's not very easy to keep an institution functioning when it has to go through that.
I had the same kind of experience when I took over the National Bank of Oman when BCCI crashed but it didn't last that long, so I come in and I still find the bank functioning fairly decently. But what you also find is that after five years of being in the doldrums, people are much less willing to take risks in terms of initiative. What we are trying to do now is to empower people, to say we hired you for your brains and we want your opinion. Part of my job in addition to inculcating a sense of service is to make sure employees take initiative.
Q: How would you compare banking practices here with those in Oman; is there anything that worked there that would work here?
A: What really worked for me in Oman was training. At the time, all the university graduates worked with government because the work day ended at 2:00 p.m. Governments in the Middle East really pamper nationals. I didn't have university graduates, just high school students and of course, we had the few Omanis with entrenched views in top positions. I couldn't change their ideas so I hired an excellent training manager and invested money we hardly even had at the time, in training. I bought new computers, put the students in training and they didn't want to leave. It lasted three months, they couldn't go near to customers until after training and after that I put them in the branches.
The oldsters saw the results then asked to be trained, realising they were not competitive any more and they couldn't fire the youngsters because they were Omani. They had to match them.
In my first press conference here I made it very clear that I'm going to increase training at NCB. There will be no one going straight to work upon being hired. The new employee will go through three months training to learn the culture.
How do I build a culture? Through the mind. Culture is not computer, chairs and tables, it's people. Therefore, if I'm were going to build an NCB ethos and culture, I have to start as they come in. They learn how to speak to people, how to sell, and answer the phone. The phone must not ring more than twice, it's a business instrument not a social item. Once we begin the process and the first 200 employees go into the system, it will begin to change. In about 18 months, everyone in NCB will go through that training centre for acculturation. At National Bank of Oman, when an employee is with us for 12 months, he would have gone through as many as 14 different training modules. In five years - up to 50 different training modules and also would have been sent overseas to somewhere like the Irish Institute of Bankers for exposure.
We also put in an assessment system that was open, objective and regular. The individual gets a piece of paper to say this is my achievement over time. The supervisor then discusses it with you and both must sign it. If not and you disagree, you have to sign and state it. Then it goes one step up so people come to trust it. Training and evaluation really changed the culture.
We don't assume supervisors know how to evaluate, if you do an evaluation that's not objective and reviewers find this out, your evaluation goes down. There is a consequence for proper or malicious behaviour. Sometimes there are valid and invalid disagreements within organisations. If it becomes obvious that the appraisal is malicious and personal and this is clear to the reviewers, you have a problem.
Q: Have you set long and short-term goals or worked out a timetable of objectives for NCB?
A: Training is both long and short-term. So far, its recruiting time. If you're coming to an organisation to make a change and you haven't done so in six months, it means you love it. So I give myself three-four months to get the people in line. Time enough to get them in and settled and training will begin by year end. I am getting ready to present my first budget to the board. My first hurdle will be to get them to agree that these are my performance targets in terms of the organisation. All this is together with an investment of US$48 million in new information technology to be launched between Christmas and New Year. There's a lot going on. The "Come Back Home" campaign is going well.
Q: At the meeting held with staff in March, Mr. Lee Chin, in response to a question from the floor, challenged each member of staff to bring at least 50 new customers into the bank in an effort to avert the much anticipated lay-off. What is the situation now?
A: On the retail side, we have personal bankers who have done a magnificent job. They have brought in new accounts and re-energised customers who were not getting good service. There is still a far way to go. Customers have begun to see a change. We didn't lose staff at Oman. We retrained and freed up people to serve customers. That will happen at NCB because we have been out of the market for a while. Others (banks) have taken the initiative for leadership. We have to get it back and that means we have to get out there, get customers and sell new products.
Through retraining, people can do jobs they weren't doing before, if we continue to grow and train, the issue of lay-offs becomes one of natural attrition rather than lay-offs.
Q: So staff morale is not low, people have no fear of job loss hanging over their heads?
A: In our dynamic world, the only certainty is uncertainty and people have to live with that. In terms of a lay-off policy, I don't see us at that stage. I want to see us get training in place, training and retraining and growth will take place. What I plan to do is train thousands of people at NCB.
Q: Part of our workplace culture is to resist change, hold our turf, establish our little "kingdoms" and maintain our territory. Are NCB workers amenable to change, do you think they have grasped your vision for the company?
A: Jamaicans are not the only people who do that. What I do know is that it's amazing what openness does to a sense of fear. If an issue affects 10 people, I talk to all 10 and remain issue-focused because all are affected - it's our business. Also, every Friday morning at 7:45, we meet for all directors to report - not about how well we did the past week, but about what didn't go right in our area and I have given everyone the right to interfere in each other's area. So if you are in personal banking and you see something wrong in corporate banking, it's going to affect you, so say it. No face is lost. Everyone gets a chance to speak.
Q: When institutions follow certain basic principles, they tend to function in a certain way. Do you agree and if so, will NCB become a clone of large super efficient Canadian banks?
A: AIC is a major shareholder and driving force behind the bank. Mr. Lee Chin has some very clear ideas as to how this institution should be run. People in institutions should be hard-working, smart and should be committed to serve. He wants NCB to be a world-class institution playing a prominent role in the Caribbean and further afield. If you are going to achieve that, you need certain basic principles such as clear service mentality, openness to accept criticism and you must work hard. Criticism is not criminal, it's like an unpaid consultant, listen to it even if it is wrong. This comes back to the attitude change we want in NCB if we intend to be world class.
Q: What will you do if your banking principles conflict with those of your boss?
A: At my first board meeting, I said that there are many proposals that I would have to take to them and many they might want me to execute. All I would require is that as managing director, I get an open hearing. After that, if the decision goes against me I will carry that decision as if I initiated it because I have been given a fair hearing, but with two caveats:
1. If it is illegal I will not do it and
2. If it's immoral I will not do it.
Sensible people disagree sometimes but the institution has to go forward. A fair hearing gives you a buy-in; it might not go your way all the time, but if you are consistently right over a period of time, it evens itself out.
Q: When the Royal Bank of Trinidad & Tobago (RBTT) came to the island, one of their first moves was to lower interest rates. What do you think needs to be done about further lowering high interest rates here?
A: I am proud that my predecessors were the ones who led the downward movement in interest rates in July. Interest rates are a factor of many things - many not directly in the bank's control. You work in an economic environment and if your currency is under pressure, the strength of the currency is in the hands of one bank or even entire banking community. External economic factors have a great bearing on interest rates. When Alan Greenspan moves interest rates in the United States, it's because of economic factors existing there and very often, even wider afield. For instance, when there was long term capital melt-down 1998, he had to move to liquify the world market by billions of dollars that kept market rates stable.
I really believe high interest rates do not encourage economic development over the long term. As much as we can lead, we will and we are doing things to make sure we change the mix of our deposit base to move in that downward direction.
Q: What would you consider the easiest "quick fix" method for improving the banking sector?
A: Unless we change the investment climate in this country, we are not going to have a strong currency and provide any kind of certainty to business people and investors. That's a big call because you have the big issues of crime, educating people, inefficiency and red tape. People don't seem to see these as economic hindrances but they are huge. If you get crime out of the way, many other things will fall into place. When I travel around the world apart from Bob Marley being the biggest ambassador for the country, crime is the next benchmark and perception that has to change. We have to fix crime.
Q: How would you rate NCB with banks worldwide in terms of efficiency and how will you boost capital efficiency?
A: NCB will have to make a lot of changes to make it a world-class bank. I want it to always be the objective in the bank, that there is a far way to go. My sights are not on my local competitors as much as I respect them and think them to be noble. If I am going to carry out the chairman's and board's objectives to make NCB a world-class bank, we have to set ourselves even higher standards. Service, efficiency have to be improved.
Q: What do you think caused the meltdown in our banking system in the 90s?
A: My view was controversial at one time. It was surprising that with the United States doing as well as they were at that time, we were not. I think that the excessive real estate lending that took place took us down. If you look at the 70s Chase Manhattan almost went under because of Reids. In the 80s and 90s the Japanese banks are still coming out of real estate lending. It invariably is a real problem when you have banks doling out money to build real estate willy nilly. Real estate, construction and trading in shares are things you should do largely with savings and if you get into debt you have to manage it very carefully. That was one of the reasons. Other reasons were managerial. Banks were probably not as tightly managed as they should; the ones that were, came out ahead. Management in the end is a big factor in the time of stress.
Q: So you are saying NCB will not get back into the real estate market in a big way any time soon?
A: As long as I'm there, real estate is not how I expect to build the bank back. There are lots of other lenders who can handle this better than we can.
Q: Is there any problem with white-collar crime at NCB?
A: I have not seen it yet, but it's still early days. The audit reports I've seen have not shown up any major cases of fraud so I have to say our people are practising their business with integrity. If and when it comes up, we deal with it case by case but I can't say it's now a problem.
Q: Is the Jamaican banking system still over-regulated now that FINSAC has resuscitated the sector?
A: The banking system has gone through tremendous challenges and if the regulators are tight, you have to understand that they too would have been under the gun. I come from a regulatory regime that is much tighter than this to the point where they have told us in writing where you cannot charge more than one rial for a photocopy. That doesn't happen in our system. Given what we've gone through, in six months I might have a different view but coming from the regulatory environment where I come from and given the recent experience of banks in Jamaica, this will be seen to the practitioner as draconian, but I can assure them it can be worse.
Q: What are your views on the automated system taking away the personal touches in the banking hall?
A: Jamaica is still a cash society. In the most automated area of the world - Scandinavia - many people just open accounts and never return to the bank. That will take time here, given the fact that we will always be selling new products, people will always be in the bank, we have 50 branches and we might scale down to serve people in some instances. In other cases we might expand then to serve customers differently, like selling wealth management products. I don't think we will move away from service in the halls rapidly although we will move up the automation line for efficiency, then people can make a choice.
Q: Now that there are no debts on NCB's books, how do you intend to proceed with banking strategy; will it be more of corporate finance, commercial banking or personal banking?
A: I will make sure that we look after individual customers whether they have personal banking issues or wealth management issues. We want to sell a lot of services. NCB has a tremendous infrastructure across this country. There are services that we can sell that we have not looked at fully and which I cannot disclose yet because we are developing products around them. So we will be selling a lot more services, will deal with people who have wealth or pension issues and need advice. Government is now looking at helping pensioners look after their retirement and we need to get into that business. Also, businesses have needs that are not being catered to, we can help and of course, NCB is a very big commercial bank, we will lend money but we will have to do it a lot more judiciously. We never want to hear about FINSAC again except as a footnote in our history.
Q: There are many affluent Jamaicans living overseas and companies like The Gleaner and Jamaica National saw the vision to target a loyal customer base in England and the United States; with the entry of RBTT as a regional player, does NCB have plans to target our own people in England, Canada and the United States with a fully integrated system?
A: The majority owners see NCB as a Caribbean player and with the present Jamaican population, one could argue that NCB is overcapitalised so will use it to expand. We have a Jamaican diaspora in various parts of the world, they are fairly cohesive and would want to see a Jamaican institution there although going cross-border is a much more challenging affair and has to be done properly. If you focus on particular services, that's something that NCB could expand to and do well. But it has to be a clear focus; you have to be extremely nimble because you are going into markets where people are efficient. That is a plus, because it will force you to behave at a higher level than you would if you stay just at home.
Q: Recent reports suggest that AIC Funds are not doing well, how will that affect Jamaicans who recently took up the offer to invest in the Fund?
A: Doing well in a period of time when everything has done so badly is a relative term. A recent Wall Street Journal article shows that AIC funds compared to its many competitors has done remarkably well. For instance, if I have a fund when the stock market has lost a substantial amount of its value and those funds have gone down by 60-70 per cent and mine has gone down by 10-12 per cent, I have done extremely well. Everything is relative. I think on a relative basis, AIC has done well - on an absolute basis, no one has done anything except badly in the recent past.
Q: What do you think of the current set of bankers in Jamaica?
A: It's too early for me to comment. I prefer for my customers to comment on our service and watch our institution grow.
Q: Some time during your stay in Oman, you said foreigners were not allowed to own land there. Did that position change?
A: No, foreigners are not allowed to own land in any Gulf State countries.
