Supporting the business

ALM Treasury

The Asset Liability Management (ALM) and Treasury business line has its roots in the original BNP trading room operation that developed in the Gulf from the 1970s.

The operation has evolved over time as the Bank attracted deposits from clients, who gradually demanded more sophisticated market exposure and risk management solutions. Over the years, the team s expansion has mirrored the region s growth trajectory, and today ALM Treasury is present in all of the Gulf States with the exception of Oman.

Khalid Humaidan, Regional Head of Treasury, said the BNP proprietary trading operation began to evolve into a more client-focused operation in the 1990s.

The original intention in the 1970s was to manage oil money, but it actually took 20 years to realise, and in the meantime we ran a dealing room. But in the 1990s and 2000s, the large oil companies started to place deposits with us. We were doing regular FX transactions, regular deposits, and the level of sophistication of the team mimicked the type of business that we were doing. But over time, something changed; clients started demanding more structured products in order to hedge risk. The clients needs changed, and so our business and the type of people we hired evolved.

We have large institutions and large corporates who place significant amounts of money with us, and most importantly, we are using local liquidity to fund local assets, further demonstrating the Bank s long-term commitment to this region s economic growth. The money that we raise in the region gets invested in the region, enabling the Bank to be a true partner to the Gulf s growth aspirations .

With the Bahrain-based desk operating in global markets, the small team was working long shifts in the late 1990s and early 2000s, especially during the bubble. The gap between New York closing and Australia opening was only one hour, so this was a 23-hour desk, said Khalid Humaidan, who joined the Bank in 2001. It was always funny seeing some of the people on the night shift, some of them had a pillow under their desk. This was the sort of business it was at the time.

ALM Treasury s regional hub in Bahrain is also one of only four such centres globally tasked with ensuring the Bank is able to safely fund commitments to its clients and counterparts.

The ALM team handles long-term financing, while Treasury is in charge of short-term funding, including intra-day liquidity management and cash clearing. Responsible for interest rate risk, liquidity risk and funding risk, the team also provides important internal functions, which include advising management on liquidity in the region and quoting an internal market for cash to other business lines.

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