Marwan Kheireddine

CEO of Al Mawarid Bank

Marwan Kheireddine is the CEO of Al Mawarid Bank, and an avid enthusiast of contemporary art. In his role as CEO, and in his passion for the art scene in the Middle East, he is able to build a life that he enjoys and that also helps other people meet their financial goals. He has been involved with the bank in some capacity since 1992. In the past, Kheireddine served as the Minister of State in Lebanon’s government. He left that position in 1992, after holding the post for three years.
His work as Minister of State helped set Marwan Kheireddine up for a high degree of success, as he held membership in more than 20 different committees. One of his main areas of focus was on economic growth, where he worked to help empower people in the private sector. With a background in banking, he was better positioned to encourage banks to make investments in areas such as technology. Those kinds of investments helped the banks, the companies, and the country as a whole.
Marwan Kheireddine has also been on the board of stock exchange in Beirut, and has worked on other financial advisory boards in the Middle East, as well. He has an MBA from Columbia Business School, as well as an undergraduate degree in economics and business administration. Not only is Kheireddine an expert in finance, but he is also an entrepreneur. His work in that area is mostly dedicated to companies in the financial sector, but he has also encouraged other types of stores and ventures.
In the Middle East, Marwan Kheireddine is a well-known name and a respected member of the financial and banking communities. That, along with his passion for art and artists in the area, helps him work with others who want to advance their own plans and goals, as well. Specifically, he is interested in Lebanese art and how it has often been undervalued by collectors who don’t see the significance of what it has to offer to the world. By drawing attention to that, Kheireddine hopes to showcase the true value.
There are two different ways to look at the investments that Kheireddine makes in the art world. One of those is through the lens of investments that gain value in the marketplace. The other is through the investment he makes in artists and art pieces in which he finds personal value or fulfillment. Much like investments in the banking and financial sectors, there are both logical and emotional considerations. By weighing both, he can help artists and entrepreneurs move forward in their lives.
Notably, Kheireddine focuses much of his time on the leadership of the financial sector, and the entrepreneurship that frequently flows into that area. Not only does he work in Lebanon, with people and companies near him, but he also understands that the value of good financial sector leadership extends to the outside world, as well. Through bringing in outside options and influences, Kheireddine is poised to continue improving the Lebanese banking and financial sector for years to come.

Where did the idea for your career come from?

So my grandfather in his hometown was selected by the people of his hometown to be the person of trust where people would come and deposit valuables with him for safe keeping. That was more than a hundred years ago. People who had valuables, whatever those valuables were, would basically come to him and place those valuables at his home, and come and collect them whenever they needed to collect those valuables. Valuables included gold coins, money, included anything that had value to them, they were villagers obviously. Most notably, the most important story was back in 1948 when the state of Israel was being created, so my hometown is at the Lebanese Israeli border, and I come from a very small community called the Druze, and we are a very, very small minority, religious minority and we have our sacred religious books.

Now, when the state of Israel was being created, the Druze of Israel, which live adjacent to the Druze of my village, were very concerned, and they were worried about their religious books. They were worried because they simply didn’t know what their fate was going to be under that new state. So they came and they deposited their religious books, which are sacred at my grandfather’s home. That was in 1947 and 1948 before the creation of the state of Israel and those books, which were in the hundreds, remained on deposit in my grandparents’ house up until 1982, when Lebanon was invaded by Israel. And when the Druze of Israel were able to revisit Lebanon for the first time after 1948, and they came to my grandparents’ house, to my grandfather’s house, and they collected their books from my grandfather, basically, who was still alive at the time.

So the idea of creating a bank was essentially formalizing a tradition that was running in our family, that had been running in our family for generations. And my dad had the chance to apply for a banking license in 1980. So he applied for a banking license back then in 1980 and he established the bank, which is now AmBank. And he started basically the business and he managed it up until the time when I took over back in 1993. And I’ve been running the business as G2, a second generation in a formal way, but essentially it would, I would call it a G4, it’s a fourth generation. As a legal entity it’s a second generation, but it was my great grandfather that started accepting valuables from people in his village. My grandfather continued that business. My father organized it or structured it in a legal way. And I took it over from my dad. So we’ve been in that business for more than a hundred years, albeit in a formal and legalized way since 1980.

What does your typical day look like and how do you make it productive?

I typically wake up early, I’m an early riser. I’m up typically between 05:30 and 06:00 AM. I typically go, I drink my coffee first thing in the morning, I go to the gym and normally, I’m in the office before 08:00 AM. My motto is, I typically like to open the door and I like to close it. The office is empty now, I’ll be the last one leaving. I was the first one in this morning. The most productive hours for me are the early morning hours and the late afternoon hours. Hours in between are hours spent meeting with clients or meeting with my managers. I have not lately been involved in the day to day business of the bank, I’m more at a strategic level. So I meet with my senior management team and I am involved in large transactions or in strategic decisions that require my time. But typically I have meetings with large clients, I have meetings with regulators. I have meetings with key employees, things that are not the day to day essentials. And that’s how I spend my day basically.

How do you bring ideas to life?

Ideas? We’re a very creative bank. And as I mentioned in previous interviews, we have a flat structure and we are most likely the only bank in Lebanon that has a flat structure. That allows for an entrepreneurial environment to thrive. So ideas flow in all directions in the bank, anyone with an idea can throw it around and it’ll reach it, basically, it’ll either be squashed and be thrown out or it’ll be developed into something nice. But typically once we have an idea that has traction because it makes sense, we set up a team for it and we divide the task. The tasks assigned to that idea from typically any idea would require some IT, some business development, some finance to set it up and ends up being developed into a clearly defined product with some marketing aspects to it, some marketing in the sense of creating a brochure, how to market it, how to position it, how to price it, how to sell it to the clients, so on and so forth.

We are primarily a retail bank with a wide base of clients. And we are typically identifying client needs and trying to create products that cater to those needs and essentially trying to sell those products to our clients who… and it’s a matter of identifying a need and trying to price, to place a product at the right price to be able to sell it. That’s essentially what we do.

What’s one trend that excites you?

There’s a lot of uncertainty, a lot of uncertainty with what’s happening in banking, in terms of technology and the future of intermediation. Is it, branches seem to be dying, intermediation is going towards technology, money seems to be dying. What’s the future of crypto? How is it going to evolve? Who’s going to be the winner. Blockchain seems to be advancing over other technologies. Is it going to be, is it Bitcoin? Is it going to be something else? Who’s going to regulate it? What’s the rule of regulators? Where are they going to be? Will governments allow the private sector to take over as seems to be the case today? What are they going to do? Will they torpedo it? Will they be able to torpedo it?

What’s going to happen at the world stage? Where will the events happening today as we speak between Europe and the United States and Russia, where is that going to lead? What’s going to happen to the gas supply to Europe? The sanctions being imposed on Russia? All of those things will have repercussions on the world that we can only guess today. We cannot really estimate or properly understand the repercussions of what is happening today in the world, going forward. Now, imagine our size relative to the world is nothing. We are nothing. The whole world is going in a direction and the winners are those that can guess slightly better than the competition where the world is going to be a few years down the road. And it’s not easy because the predictability is simply not there.

You just know technology is advancing at a rate that has never been seen before. The new generation is adapting to technology at the rate never seen before. The advancement in the past 10 years because of portable electronic devices is advancing at the rate never seen before. The security available to individuals on their phones and on their computers is again advancing at a rate that we’ve never seen before. The search engines are giving us access to big data at a rate that we’ve never seen before. It’s simply unbelievable. The demographics are changing at a rate that we’ve never seen before. People are going to live longer, they’re going to have different requirements. They’re going to have… the world is changing, dramatically. So for someone like me running a medium size bank, trying to manage a few billion dollars and trying to figure out where the world is going to be in 3, 5, 10 years down the road, trying to estimate the demographics of my client base and what their demands are going to be in 3, 5, 10 years, add to that the complexities of Lebanon and our economic issues in Lebanon.

And whether we are going to be signing a peace treaty in Lebanon or not. Whether Iran and the United States are going to agree to a new nuclear deal or not. Whether the borders with Syria are going to reopen or not. Whether we are going to be exporting our produce again to the Arab world or not. You add to that the complexities of the middle east, and it’s quite complicated in the middle east. And then your mind starts using all this brainpower to come up with scenarios that are quite difficult to put on an Excel sheet.

But then you live it day by day and you come up with a business plan that you tweak certainly more often than if you are in Germany or if you are in the United States, you keep tweaking and adjusting, but we’re good. We had a very good deal last year, but you keep tweaking. You keep tweaking.

Predictability is very low in Lebanon. Predictability is the luxury we don’t have. You just have to be ready to react. And that’s why having a flexible corporate structure is very important because you could be going north and then have to go south and you need to be able to do that without breaking up your organization.

What is one habit of yours that makes you more productive as an entrepreneur?

Oh, I have to say positivity.

It has to be. It has to be Where you get hit by negative news and you take it with a big smile, put it behind you and continue your drive and not get distracted by people trying to slow you down or essentially distract you from your objective. If you have clearly defined goals and if you keep success as your objective, you will end up making it. It’s funny how once you have clearly defined goals, you very, very, very often end up reaching them.

It’s so hard for someone not to reach their goals if they’re determined. It’s so hard. It’s actually practically impossible not to reach your goals if you know what you want.

What advice would you give your younger self?

So I wasted a lot of time listening to a lot of negative advice in my life. I would weed out any person that had a negative influence on me over the years. And you can identify those, anyone, if they think about negative influences in their life, they can, in my mind, they can clearly identify where negativity comes from. No one should have a place in their life for negativity. They should weed it out, ASAP. The faster you weed out negativity, the more prosperous you become.

Tell us something that’s true that almost nobody agrees with you on.

Lebanon is going to get out of its economic hardships very quickly.

I failed a lot in my life. I’ve failed more than succeeded. But failure has a price and you know how much it costs. And then when failed, that’s it, you know exactly how much it costs you and it’s the number. Success is unlimited or can be unlimited and success keeps repeating and every failure will be covered or every success will cover several failures. So if you fail 10 times, one success will cover far more than 10 failures, so keep trying. It has worked for me. Now, you need to have, obviously, you need to have the support of your organization and you need to keep trying and you need to have the ability to keep trying.

So don’t fail, don’t bite more than you can chew and do not take more risks than you can absorb. So don’t go into a project that will break your back to the point where you can not rise if it breaks you. Don’t go into a project that will set you back at a point where you can no longer rise. So take calculated risks, do not take uncalculated risks, but with calculated risks, even if you fail, one success will cover multiple failures.

What is one strategy that has helped you grow your business?

Transparency. So if you’re working hard and you are being transparent, the market ultimately will determine that you are a good institution. And if you’re offering products that are transparent, ultimately, the market will realize that your products are superior. So essentially if you offer products with a good price-quality ratio, you will have return clients that are happy. You should always, in my opinion, one should always forgo the quick buck, for long-term profitability. So go for a lower margin that is repeatable over time, as opposed to making a quick buck once. A quick buck once will not repeat itself. So yes, you can fool, again, the famous classic example, you can fool some of the people some of the time, but you cannot fool all the people all the time.

What is one failure you had as an entrepreneur, and how did you overcome it?

Oh, I’ve had many failures, maybe I’ll keep it at the level of the bank. One of them was, on the credit cards. One of the local banks signed an agreement that would’ve been, that would’ve not… it wouldn’t have been legal in Europe or in the United States with the local airline, where they started offering, at the time 20 years ago, they started offering air miles and they had an exclusive agreement with the local airline to offer air miles on their credit cards. And that obviously is a huge advantage to a credit card offering air miles. We tried to offer the same product and we simply couldn’t because they had this exclusive agreement with that airline. So we sat around the table, my team and I, and tried to create something similar. And we came up with an idea where we said, you know what, let’s create a card that would offer miles on any airline.

Essentially, we thought, you know what, we could create a card where for every dollar spent, you get a mile and you could redeem that mile on any airline, as opposed to one airline, thinking that that would be more competitive. And the logic was we would essentially take the money that we could afford out of the credit card, out of the spending from each client, obviously, and whenever they wanted to redeem them, we could go to a travel agent and buy to that specific client, a ticket on any airline that they want using those miles. We prepared the marketing campaign. We printed the cards, and everything was ready.

But then I realized when I was meeting with my team, all of them with no exception were drawing a blank. That was 20 years ago, they were drawing a blank. And then it occurred to me. And I asked my team, I said, “Who in this room has an airline loyalty card?” And none of them had one. So I was pushing, that was 10 years ago, I was pushing something on my team that no one had experienced. And I said, “You know what, we’re scrapping that program because you guys cannot sell something that you have not experienced and do not understand.” And we never went through that program. So that’s a mini failure, I mean, failure, but we never really launched it. And we never, so that’s an example, a small example.

What is one business idea that you’re willing to give away to our readers?

I know that Lebanon produces one of the best quality olive oil in the world. I have not yet seen any serious olive oil producing company selling Lebanese olive oil on international markets, mostly because of the structure of ownership, land ownership in Lebanon. The land is owned by individuals in Lebanon. Most individuals own small plots of land that are scattered in different regions in Lebanon. The oil that is produced is mostly produced in small olive oil factories, so there aren’t economies of scale. So they end up producing in small quantities that are quite expensive and they sell them locally because exporting them simply does not compete with, they cannot compete with oil being produced in Italy or in Spain, essentially, these are the competitors for Lebanon. Now, if they can gather up and create a high-end luxury brand, the quality of oil produced in Lebanon is by far superior to the best quality produced in Italy or in Spain, but they need to market that.

And for them to be able to market that they need economies of scale. So if there was a way for someone to come in and say, “You know what, guys, let’s all gather up under one or maybe two companies and all gather our efforts and produce, I don’t know, the Louis Vuitton of olive oil in the world, or the Channel of olive oil in the world or whatever. Let’s create a brand, and remember we are the land of Jesus Christ. We are the land, we are, essentially, we are it.” We have olive growth in Lebanon that dates to pre-Bible more than 2000 years old, of course.

So you have a story to tell, but it requires someone with some capital and some innovation and some obvious understanding of agriculture that is willing to come and say, you know what, I’m going to buy all your produce. This is what I need from you. This is how I’m going to process it because it’s very sensitive. You need to get the olives and turn them to olive oil within four hours of picking them up from the tree so that you get extra Virgin olive oil. That’s how I’m going to label them, that’s how I’m going to add, I don’t know, flavours to them. That’s how I’m going to package them. And that’s how I’m going to sell them in Europe or in the United States or whatever. And you could produce olive oil that is by far higher in quality in standards than anything you can buy anywhere in the world, competing with whatever. So that’s an idea that I’d be willing to give to my competitors. I’d be willing to invest in it if I find the right partners.

What is the best $100 you recently spent? What and why?

So best $100 I’ve spent? Okay, the best $100 I’ve spent, it was actually $82 that I spent two weeks ago. I bought my son, who’s now 19 and he’s going to university. I bought him an HP12 C. The HP 12C is actually the Hewlett Packard financial calculator. I promised I will coach him to learn how to use it, and if he actually ends up using it, it’ll be the best thing, in my mind, for his career, because he plans to become a financial consultant.

This is the financial calculator that I have used, and I’ve learned how to use it after my father and any banker that has been a banker for a while, has used it. It’s a financial calculator that is only used by financial people. It’s a reverse logic calculator. You don’t need it, obviously, today because you can do any financial calculation on Excel or CBooth, but it teaches you the basics of finance, and once you learn how to use it, you will learn the ABCs of finance, as opposed to simply plugging in numbers on your Excel sheet and getting the results. You will actually know what you’re doing. It cost me, on Amazon $82, and that would be definitely my best $82 spent probably this whole year.

What is one piece of software or a web service that helps you be productive?

I use OneDrive and I recently downloaded that on my iPhone. I find it extremely useful because I have access to all my files now, wherever I am, on my iPhone. It has enough security on it for me to trust it, and anywhere I am, anywhere in the world, I can look up any document that I need for quick access. It doesn’t really give me a chance to work off my phone for anything complex, but it gives me access to my documents for viewing in an easy way.

What is the one book that you recommend our community should read and why?

So it’s an old book, but it helped me organize my life significantly. The 7 Habits, Stephen Covey. I read the book maybe 20 years ago, and I also took a one-day course. It helped me organize my thoughts and I still use habits that I picked up from that book and from the course, for example, first things first, organize yourself. Don’t do more than one thing at a time. Things like that. I would really recommend it. It’s not outdated, although it’s an old book, but it’s not outdated. I would highly recommend The 7 Habits of Stephen Covey.

What is your favorite quote?

I have a quote that I created that I really like. I’m sorry, I’m not a megaloman or anything of the sort at all. I don’t have an ego, but I have this quote where I tell everyone that they need to work hard, very, very hard, and then pray for luck. I think if you really want to succeed, you have to work very hard, really, really hard, and then pray for luck because a lot of people work hard, very hard, and they don’t make it. I mean, they make it, but they don’t make it big. To make it big, I think you need luck, but you have to work hard. No one makes it big without working very hard. A lot of people work hard, but don’t make it big. So my motto in life is to work hard, very hard, and then pray for luck.

Key Learnings:

  • Perseverance pays. Honesty pays. Transparency pays. Honesty pays. The ego is the enemy of everything in life.
  • I’ve rarely seen successful people failing, except when they trip on their ego. Ego is the killer. Ego is the killer and there’s plenty of it, especially in my world, in people that are at a high level, C-level in the corporate world. I mean, egos that do not go through the door, and if they could only realize that a teeny-weeny little stone in their kidney could put them to the floor and make them scream like babies, they would realize how irrelevant they are in this world, how irrelevant they are in this universe, how small they are compared to everything around them. But our mind, our culture, the way we are brought up, and the way our community works does not just EQ. It simply does not.