Seasoned banker's take on investment banking prospects

It is very common to see university students and young professionals worry about their future and where their careers will take them. The pandemic has augmented those concerns and with good reasons. To get an idea on the post-Covid corporate landscape, Zarif Tajwar Shihab interviewed Shahanur Rashid, the chief operating officer of NDB Capital Limited, a Sri Lanka-Bangladesh joint venture investment bank.

A certified management accountant with an MBA in marketing, a certified expert in risk management from Frankfurt School of Finance and Management, Germany, and BIBM, Rashid has had a diversified career of more than fifteen years.  As a seasoned banker with knowledge on several industries, he is probably the ideal candidate to give a picture of how the Bangladeshi corporate landscape will look and the career prospects as an investment banker.

Question (Q):  Which industries do you believe will thrive after the pandemic subsides? Has the pandemic caused any major change in the investment suitability of the various portfolio options available in Bangladesh?

Answer (A): Closures, restrictions on travel, and its impact on connected economies have disrupted the decade long growth trajectory of Bangladesh massively. The global disease is still elusive of a cure making the future very uncertain. It is, however, safe to assume that industries catering to basic needs such as food, pharmaceuticals, etc. would survive the initial shock. Whatever the situation, logistics, and supply chain cannot be fully disrupted. Besides, the "new normal" has transformed internet, IT and telecommunication infrastructure, and IT-enabled services like e-commerce as daily essentials for many. Despite the initial order cancellations, the ready-made garment (RMG) sector can turn around with process and product innovations as many buyers are looking to shift from other countries.

In terms of an investment portfolio during a pandemic, the scope for sound investments has narrowed down.  Deposit rates in Bangladesh have decreased to match the single digital lending rates and high yield producing corporate bonds are still a novelty here. Gripped by fear, retail and institutional investors are relying more on secured investment opportunities rather than high earning ones evidenced by low private sector credit growth, low turnover in the stock market, and increasing investments in treasury bills and bonds.

Q: What is your view about the future of the investment banking industry in Bangladesh in the post-Covid era? What are the career opportunities that it will offer young graduates?

A: Bangladesh's financial market requires the support of investment banks and structured finance units more than ever to better tackle the supply and demand shock in a stressed liquidity scenario. Businesses in tourism, transportation, real estate, consumer durables, steel, etc. are more prone to pandemic impact as a decrease in income levels affect demand. There is scope to provide advisory support for debt restructuring to these businesses. According to a report of the Global Infrastructure Hub, between 2016 and 2040, Bangladesh needs US$ 608 billion in infrastructure investment to become developed and the current trend indicates at a shortfall of US$ 200 billion. Tapping into the bond market for infrastructure financing would become more imperative in the coming days and investment banks are better equipped to offer tailored solutions for such types of transactions. There is room for merger and acquisition, amalgamation, balance sheet restructuring as well and innovative, doable financing solutions would be key to helping businesses sustain in a post-Covid Bangladesh.

Post-Covid-19, companies will probably be more focused on rethinking business models and shock proofing their operations. This will create a demand for experts, or strategists to help companies revive and plan-- meaning opportunities for young graduates with relevant skills in the investment banking landscape as well.

Q: Could you give young readers an idea of what to expect from a career as a finance professional in the banking sector?

A: Carol Dweck, a professor of psychology at Stanford University, elaborated on the concepts of "Know it All" and "Learn it All" in her book Mindset. My more than fifteen years of experience dictate learn-it-all survives the long haul even if know-it-all offer better returns in the immediate term. Finance professionals need to develop a positive mindset for learning, be it from reading through regulatory policies, acts, guidelines, or on the job. Being flexible with roles and having a passion for adapting to new challenges can help achieve cross-functional expertise. Return wise a career in finance does come with certain perks such as lucrative pay, opportunity to innovate, and develop deep and lasting relationships with clients, peers, and seniors in the industry. However, the biggest uptake is the opportunity to learn about different sectors -- all at one go-- from a bird's eye point of view.

Q: What kind of young professionals do you think is best suited to transition into a job as an investment banker?

A: Investment banking involves corporate advisory roles in Bangladesh- so relevant experience helps. Understanding of regulatory framework, local and international investment policies, analytical skills are a must to survive in this sector. Having a good grip over corporate finance and accounting basics, can-do attitude with a knack for networking help understand customer pain point and structure solutions that fit. Professionals having experience in corporate finance, treasury operations, corporate banking may find it more comfortable transitioning into a job in the investment space. Professional certifications in finance and accounting also help solidify the knowledge and expertise required in an investment banker.

Q: What are the skills you believe to be most critical for university students to focus on and develop to prepare for a career as a finance professional?

A: Communication skills are quite important particularly for the ones interested in business development roles.  Suited to the new normal, being tech-savvy is also important. It is not mandatory to have a finance major to be thriving in the sector, there have been many examples of reputed bankers coming from a diversified educational background. However, having a working level understanding of economics, finance theories and models, financial reporting standards, can help understand the country and sector level perspective and understand the nitty-gritty of different business models finance professionals need to serve as advisors, fund managers or direct lenders.

Q: As a student did you ever receive any advice which had a profound impact on you and your professional choices? If you could give one piece of advice to your younger self what would it be?

A: One of my mentors once told me -"Don't try to be like us, try to be your own self. You need to nurture your unique capabilities." During the early days of our careers, we try to follow our seniors and tune our capabilities to theirs. However, this advice helped me focus on my own strengths. I seek comfort in the fact that I am not an all-rounder rather a team player. This also helped me to explore opportunities across industries, something unusual in the financial sector. But I believe my stints in fast moving consumer goods (FMCG) and telecom sectors, front-mid-back office roles within the banking sector has prepared me well for my current position. If I am to look back and give myself advice-- it would be to learn to refuse politely when necessary.  I love helping people in my network but it is important to recognise when someone's opportunity is your distraction.

Q: Being the COO and effectively holding one of the key leadership roles in an investment bank, what is your definition of an "ideal leader"?

A: I always compare the leadership position with the captain of the ship. There is a maritime tradition that a ship captain holds ultimate responsibility for both his ship and everyone on it and that during an emergency, he or she will either save them or die trying. I think, in a Covid-19 ridden world, the need for responsible and empathetic leadership has grown significantly and true leaders can navigate the ship in the right direction. Irrespective of sectors or economies, every employee is going through a difficult phase. Many companies have to make drastic decisions like pay cuts, workforce restructure, etc. hence leaders have to be more empathetic, trust their team and come up with initiatives to protect both employees and the company.

The interviewer is a third-year student of BBA programme at the Institute of Business Administration (IBA), University of Dhaka. He can be reached at [email protected]