Podcast | S2E4 Credit Risk and the Credit Crunch: Saadia Mujeeb

Podcast | S2E4 Credit Risk and the Credit Crunch: Saadia Mujeeb

Podcast | S2E4 Credit Risk and the Credit Crunch: Saadia Mujeeb 1400 788 Risky Women

Saadia Mujeeb leads 4 global teams at NatWest Markets specializing in Hedge Funds, Mutual and Pension Funds, Prime Brokerage and Counterparty Clearing Houses.  The Senior Risk Approver for structured transactions, new business initiatives for Markets, PB, Clearing and the Structured Lending Franchise, she is recognized for pragmatic decision-making during tough complex negotiations, effective stakeholder management and commercial judgement.

Saadia is passionate about investing in others. She is Tutor on the Henley Hedge Fund Executive Programme and has successfully designed best-practice training, partnering with Fitch.  She founded and co-chairs the 100 Women in Finance Peer Risk Advisory Group in London; is the Global Chair of the Risk Leaders Committee for the Professional Risk Managers International Association and has held Non-Executive Director roles for charitable trusts. She holds an MBA from London Business School.

Points of Interest
  • 03:34 Building Teams
  • 06:27 Career Journey Success
  • 07:58 Passion for Giving Back
  • 09:22 Hot Topics: Crypto Currency, Climate Risk, Diversity
  • 11:05 Hedge Fund Credit Risk
  • 14:26 Role of Head of Credit Risk
  • 16:37 Key Lessons From the Credit Crisis: Teamwork, Early Warning Signals, Data Overload
  • 18:52 Future Landscape: Counterparty Clearing Houses, Robotics & AI
  • 22:29 Rants & Revelations
  • 23:26 Rapid Fire Round

Risk should stop being considered as a back office function. It is a decision making division.

(views expressed are Saadia’s own)


Kimberley Cole 0:01
This is Risky Women radio show to connect, celebrate and champion women in risk, regulation and compliance, sharing insight and perspective from the most influential members of our global Risky Women network. On the latest developments, we need to think about, the challenges we should all talk more about, and innovations we are most excited about in governance, risk and compliance. Bringing together the hundreds of senior women professionals already connected with a new emerging group of leading women and men. I’m Kimberley Cole, your Chief Risky Woman.

Kimberley Cole 0:39
Welcome to Risky Women Radio. Today’s risky woman is Saadia Mujeeb. I’m pleased to be here at NatWest Markets in London speaking with Saadia, so welcome.

Saadia Mujeeb 0:50
Thank you very much Kimberley.

Kimberley Cole 0:52
So Saadia is the Global Head of Credit Risk – Hedge Funds, Mutual Funds, Prime Brokerage & Central Clearing Houses. She was also a finalist in the 2018 Women in Finance Awards as Banker of the Year and she is a tutor at the Henley Hedge Fund Program. So we’ve got lots to talk about today, I think so let’s start by you telling us a bit more about your career. What’s been your journey to date? So what have been some of the highlights?

Saadia Mujeeb 1:20
Sure, absolutely. So welcome. So I currently, as you said, I’m the Global Head of Credit Risk – Hedge Funds, Mutual Funds, Prime Brokerage & Central Counterparty Clearing Houses. It’s a mouthful so CCP now going forward! At NatWest Markets, but prior to that, my career I really started from the Barclays graduate scheme. I was one of the fortunate ones that was, had two international assignments during my graduate scheme.

Kimberley Cole 1:49

Saadia Mujeeb 1:50
They don’t do that anymore. So I was in Dubai, in FX sales, implementing our e-commerce solutions for our corporate clients in the Gulf, responsible for budgets – 21 year old with money and people at her disposal. And then after that, I was back in London, working for Accenture, Barclays did a joint venture with Oracle, Accenture. This was a e-commerce b2b initiative. And I worked for the strategy partner there. And then finally, I went to New York to work in hedge fund credit. So I worked for both the global heads of hedge fund credit and hedge fund analytics. So this was the quants side. And that was my calling. It was fantastic.

Kimberley Cole 2:37
Excellent. That’s great. Actually, I think as you said, the the graduate schemes have certainly changed a lot because they were, you know, very costly, I guess, to do those global assignments, but also just an amazing experience in terms of you to be able to get a taste of so many different, not only countries but functions to then think about what was your next step.

Saadia Mujeeb 3:00
Exactly, exactly. And then after that, I came back to London, and the bank actually sponsored me to do my MBA. So these are the times where they were actually investing which was brilliant.

Kimberley Cole 3:09
Brilliant! And so you did your MBA at

Saadia Mujeeb 3:13
London Business School.

Kimberley Cole 3:14

Saadia Mujeeb 3:15
And I did that whilst I was working. So I recommend to anyone who’s thinking of studying, do it whilst you’re working. It’s like having that practical experience. It’s fantastic whilst you’re learning all the models, and you get to meet different people as well.

Kimberley Cole 3:30
So what do you think’s been the biggest risk then that you’ve taken professionally?

Saadia Mujeeb 3:34
So as I became senior, I had to manage teams. And as you’re recruiting, there’s always a thinking of, you should get the same type of person with the experience in your team so they can hit the ground running, I’d like to try and mix it up. So the biggest risk I took was taking someone who didn’t have the same background, who didn’t come from a tier one university. But he was fantastic in terms of enthusiasm, capability and drive. And he was and is one of my best hires. He’s done very well.

Kimberley Cole 4:06
Yeah. And that’s really interesting, I think in terms of how do you build teams that, you know, we want to talk about diversity in the broader sense of getting diversity of thinking, but yes, obviously, sometimes it feels a bit uncomfortable getting people with totally different backgrounds.

Saadia Mujeeb 4:22
Especially when, of course, I wasn’t the only person who interviewed him and lots of others interview as well. And they were of a different mind. So you have to convince, and you have to take a chance and that’s a professional judgment you make, and it worked out very well.

Kimberley Cole 4:37
I think that’s very interesting. And so, you know, you’ve obviously done so much in your career, and you’ve managed to have a very global career as well, if you’re going to pick three achievements that you’re sort of most proud of what would they be?

Saadia Mujeeb 4:53
In terms of achievements, I would say, leading teams, and actually having good people who are now managing their own teams in other banks. That, to me is something that I’m very proud of. And in terms of the credit crisis, if we talk about that, you know, remaining still in on professional terms with those clients where you’ve had to have difficult conversations. So during the credit crisis, I worked at US organizations, so Bank of America, Citigroup, and we were in the midst of sort of a lot of headwinds. I had to make difficult calls with clients that had been relationships with the bank for a while. It worked out really well, because I was consistent, I was fair, and those clients have moved on to have other hedge funds. And we still keep in touch. Some of them we still trade with.

Kimberley Cole 5:52
So I think then we’ll get into more of that, because I think that’s a very interesting area. And was there a third one?

Saadia Mujeeb 5:58
Third one is the nominations, of course, I’m very, I’m very happy that I’ve been nominated for the Women in Finance Awards, again this year, and in the Women in Banking and Finance Awards, as well.

Kimberley Cole 6:10
Fantastic. And we love celebrating risky women. So we’ll definitely add a link to those nominations, so people can see more. And if you were thinking about the career journey, and the lessons that you have learned, I mean, what’s been most important for your success?

Saadia Mujeeb 6:27
I would say technical ability, in terms of you have to be credible, there has to be a reason why people are going to speak to you and come to you.

Kimberley Cole 6:37
And both internally and from a customer perspective?

Saadia Mujeeb 6:39
Correct. So a trusted advisor status is is where you want to be. And that does require hard work, and it served me well. That’s something that I encourage everyone in my teams to do as well. Continuous learning. Also, I would say, having a personal boardroom of advisors, that’s been really key, helping me look forward a couple of steps, not get too bogged down in the here and now and really equip myself for the future. So we’re looking at things like crypto funds, you know, we don’t trade them here. However, that’s a change that’s happening in the market. It may take off, it may not. But it’s something to at least be researching about, speaking to the right people, understanding.

Kimberley Cole 7:26
I think that’s excellent. I too think having that sort of board of advisors, personal board of advisors to help you is very important. And people talk a lot about mentors and sponsors, but I tend to think of it a bit more like that, and that you need certain people for certain times. And as you say, maybe some of them are helping you with that future proofing yourself.

Saadia Mujeeb 7:48
Absolutely. Absolutely.

Kimberley Cole 7:50
And so what are you passionate about beyond your current role? Because I know you chair the Women’s Network and so I assume that’s a passion. But you know what else?

Saadia Mujeeb 7:58
Absolutely. So definitely I believe in giving back. So, as you said, I’m Chair of 100 Women in Finance their risk advisory group. So this is the peer to peer group in London. I believe, you know, we should all be helping and supporting each other. And this is a very good way across all risk stripes to get to know, your counterparts other firms, not only banks, this is hedge funds, asset managers, insurance companies, from credit risk, market risk, operational risk, investment risk, so across all stripes, so that I’m certainly a passionate believer of that. I also am the Global Chair of PRMIA, which is the Professional Risk Managers International Association. This is not sort of male or female, it’s mixed. It’s and it’s fantastic, because it’s a committee built up of Chief Risk Officers of banks primarily. And we’re building out to asset managers and hedge funds as well. Talking about in the future, what about risks that we should be aware of having breakfast sessions talk about what are people doing in the respective firms under Chatham House Rules? So it’s again, sharing best practice.

Kimberley Cole 9:11
So as we move on to your sort of expert opinion area, even just on the risk advisory group, what are the hot topics at the moment?

Saadia Mujeeb 9:22
Absolutely. So we did we did crypto currencies, couple of weeks ago, we had EY come and present from Switzerland, and London to talk about some legal framework accounting, talk about what’s happening in the market, what the key concerns are that the chief risk officer should be aware of. Of course, it was a very energetic debate, because some people believe it, some people don’t. We did that. We’ve also done climate risk. How would you price climate risk in the future? As a risk officer? How would you incorporate it into your loan underwriting? So that’s we had Imperial University come and speak on that.

Kimberley Cole 10:02
And yes, I’d like to do more on that. I mean, it’s interesting, because the Australian or certainly the Australian Institute of Company Directors and even now, the Reserve Bank is highlighting this as a key risk that people and certainly for boards need to be thinking about. So I think it’s a really interesting area.

Saadia Mujeeb 10:20
Exactly. And then the final one we’ve done is looking at diversity. So the Parker Review in the UK, recommends that there should be one ethnic minority person on the board by 2021. Then it also encourages people and firms to start looking at their succession planning within their executive teams. So it was just sharing ideas what other firms are doing for their diversity planning in the risk function.

Kimberley Cole 10:49
Obviously, you’ve talked about your career really, you know, focused around hedge fund credit risk, as well as obviously other things. But I think hedge funds are an interesting area, can you share a bit more detail on your current function and the focus of that team?

Saadia Mujeeb 11:05
Absolutely. So currently, at NatWest Markets, I have four teams, the hedge fund team, they are based in London and New York, and we’re growing out in Asia, in terms of the focus it’s really looking at bilateral and prime brokerage clients. The team will meet with the hedge fund, conduct the onsite due diligence, make recommendations on initial margin and documentation. And then we’ll trade and then they’ll manage the ongoing monitoring that you’d expect from a counterparty credit team, looking at ATEs should they be breached? And when I say ATEs, I mean, additional termination events. For example, if the fund loses X percent of NAV, they will get around the table with the client to understand what’s happened, what should they do? Are we comfortable with the risk, if not, what’s the next step? And also understand what’s happening in the market. For example, Brexit, we saw volatility in the market. Does that mean there’s larger margin calls that we should be aware of, what are we going to do with that? So it’s really good, holistic role – you have to understand markets, you have to understand counterparty credit risk, you have to also be a relationship manager, because you’re speaking to clients directly, both internally – sales, trading, and externally – the clients themselves.

Kimberley Cole 12:27
Sounds very interesting. And yeah, really kind of 360 degrees sort of view in terms of what you need to have skills and knowledge of as well as then your interactions internally and externally. Now hedge funds have often been portrayed as a fairly high risk, and obviously also high return. Can you give us an overview of, you know, what a hedge fund is, and then where it fits into the sort of overall investment industry?

Saadia Mujeeb 12:54
Absolutely. So hedge funds, misleading when it says “hedge” – they don’t hedge – they are leveraged vehicles looking to make return no matter what market direction. So they’re looking for absolute return. They use that by leverage. Therefore, they rely on counterparties such as banks to provide that leverage. That’s where the credit risk assessment of the firm’s infrastructure so the credit officers will go and meet the hedge fund, they’ll look at the strategy they’re implementing, understand how they’re going to implement it, what the risk controls are, what the back office of that hedge fund is, how they manage their liquidity. That’s all important, because these are risky vehicles, they have small amounts of capital, but they take outside exposure.

Kimberley Cole 13:41
As an aside, I guess, but are you seeing more women leading hedge funds? Because obviously, that’s where 100 Women in Hedge Funds sort of came about. Are you seeing more on the rise? Or not really?

Saadia Mujeeb 13:52
There, are there well known hedge fund managers who are female? Not currently it from my experience. I haven’t seen more fund managers that are women, it’s primarily been men.

Kimberley Cole 14:06
Interesting area isn’t it terms of why why not.

Saadia Mujeeb 14:10
But there are very good fund managers, I, the CEO, maybe a man but underneath them, they will have portfolio managers that are female.

Kimberley Cole 14:18

Saadia Mujeeb 14:19
And the 100 Women in Hedge Funds is actually doing a showcase of all these portfolio managers who are female.

Kimberley Cole 14:26
Excellent, I mean, back to your role, can you can you give some sort of a day in the life of the Global Head of Credit Risk? What’s it look like?

Saadia Mujeeb 14:35
It’s very busy. I mean, a typical day really starts in the morning, making sure I read the paper on the way in. So this will be on the web, looking on online, on the way on the tube, understanding what market movements have occurred, looking at emails over overnight from our New York colleagues, and Asia colleagues, if there’s anything that requires my input or approval, or anything I should be aware of. And then in the office, I’m looking at, we have a dashboard to understand any major market movements that will impact our clients. So we have a daily stress test of our portfolio, and anything that’s outside, the credit officer should be reviewing and then highlighting up to me, and I overview across the portfolio. So that’s what the hedge fund…

Kimberley Cole 15:24
Sounds really easy!

Saadia Mujeeb 15:27
If only! Absolutely. And then normally, I’m going to see either clients, or there’ll be internal meetings. With a client it will be the large clients where we doing not only an annual due diligence, but it could be a fund update, because we want to understand what their thinking is, what their views are on the current market events. It’s really keeping close. And then after that, it’s a lot of internal meetings at the bank as we have a lot of projects, meetings, of committees. And then I try and spend an hour at least a day, either speaking to one of my mentors, or mentees. So trying to get an outside view other than the day to day.

Kimberley Cole 16:08
Good. Oh, that’s very interesting. that’s a that’s a good tip, I think, for people to sort of think about other things that can add to their to their day. Now you mentioned before you were talking about the the credit crisis or or the global financial crisis, and what some of the your experience during that time. And so I’d really like to sort of dig into that a bit more, you know, what was key for your role, I guess, the sort of before, during, after the credit crisis.

Saadia Mujeeb 16:37
Sure. So the credit crisis really started, at least in EMEA in 2007. So early on 2007, there was a large hedge fund, trading ABS that blew up, that was one of the first ones that I had experienced in my career. And it was a very good lesson learned. Because the client, I had built a good enough relationship with the client that I got the call saying, you know, please don’t default us. But it’s not a call you want on a Wednesday night six o’clock, but it happened. And when you look back, you sort of see the early warning triggers. And that’s a lesson learned is don’t ignore those warning triggers when clients are disputing margin calls, simple things like that, where they could be arguing about valuations. Yeah, I’m not a valuations expert, I rely on other teams to do that. But it’s to make sure that you follow up, you keep on top of other people who you’re relying on. So that was one of my first experiences in the credit crisis, I also worked with the traders to close those positions out. And this is where, where you have that relationship, it’s so simple, because the trader had an excellent relationship at the bank I worked in with the hedge fund, I had a very good relationship with our traders. So we did that very quickly, we returned money back to the clients as well. And we did our duties there. The follow ups were all the reports that the individual weren’t getting, but too much, you know, no, no individual person can go through 40 reports every day in the emails. So one of those lessons learned is dashboards are important with the key information. And I think everyone’s learned that lesson since the credit crisis.

Kimberley Cole 18:21
Yeah, that whole kind of information overload, which I think, you know, many of us suffer from in in different ways. But that’s interesting. So sort of teamwork, looking for early warning signals, and then better information that’s really actionable rather than just a wave of, you know, data.

Saadia Mujeeb 18:41
Right, exactly, exactly.

Kimberley Cole 18:43
Oh, that’s very interesting. And, and what do you think that the future looks like, the future landscape, but also just, you know, what sort of changed?

Saadia Mujeeb 18:52
Well, we’ve seen the emergence of CCP. So these are clearing counterparty clearing houses. The advantage of that initiative is that you have transparency on the trades, because the CCP, then is your counterparty. However, I think we shouldn’t lose sight of the fact that hedge funds, asset managers, clients can’t access the CCP directly, they have to come through a bank, therefore, someone in credit risk has to do a credit risk assessment on the counterparty to permit those trades to be executed. So I that’s my my concern is that people have a false, they think that we’ve mitigated risk by having CCPs in place. We haven’t, we’ve just shortened the time horizon.

Kimberley Cole 19:40
Yeah, yeah. That’s very interesting. And I mean, still, we had a good session on ethics in compliance. And that was a similar conversation of where people almost think that there’s so many rules put in place, that it removes the responsibility of, you know, the correct behavior and actions almost. So it’s a very interesting balance between how you ensure that you’ve got people doing the right things at the right time.

Saadia Mujeeb 20:13
Yes, yes. And also, remember, we’ve got, banks have got a cost challenge. So there is a lot of focus now on robotics, and AI.

Kimberley Cole 20:24
I was going to say, what is the you know, what else is going on? What do you see as the big changes?

Saadia Mujeeb 20:29
I think robotics for me makes sense, because it’s automating tasks that, yes, you shouldn’t have individuals typing in data into a spreadsheet for it to then go into another spreadsheet, you know, you can have robotics do that. AI is a bit different. I think AI is quite good in terms of compliance for surveillance. Do I think it’s good for risk management? No, because risk management is not a science. It’s an art. It uses scientific data. However, ultimately, it is a decision made by an individual based on their experience, and what’s happening in the market. I don’t think current AI models can do that. Maybe in the future they can. I don’t think we’re there yet.

Kimberley Cole 21:17
I think that’s another very interesting topic is, you know, the risks of AI. Because I think, you know, we’re seeing a lot of things about bias and other problems with AI. But obviously, there’s definitely some great applications. But then, yeah, that whole difference between what you can automate, and then what’s the human element that still needs to add that value is very, very…

Saadia Mujeeb 21:42
And then you have governance issues. So if an AI model is making a decision, who’s going to ultimately be accountable if it’s the wrong one?

Kimberley Cole 21:50
That is fantastic, very interesting. And obviously, your role is fantastically varied across so many different areas. And also great to hear all of the the work that you’re doing for the different associations that you’re working on as well. So thank you very much for that. On to one of my favorite sessions, which is the rants and revelations, Risky Women rants and revelations. So what’s your revelation? So your top piece of advice for emerging women but also men in risk, regulation and compliance?

Saadia Mujeeb 22:28
Absolutely. I would say, treat people the way you want to be treated. Is that a revelation? I don’t think so. I think it’s just a guide to live by. And, you know, integrity is important. Without it, you won’t have a career. Not on in risk but anywhere.

Kimberley Cole 22:50
And I also think that that builds trust and trust is so incredibly important.

Saadia Mujeeb 22:54
Building reputation.

Kimberley Cole 22:55
Yes. So on to the other side, what’s your rant? So if you were the, you know, queen of the world of the day, what would be that thing that you would change?

Saadia Mujeeb 23:06
I would say risk should stop being considered as a back office function. It’s not a back office function. It is a decision making division. And yes, we do make unpopular decisions. But you’ve got to remember, someone has to apply the brakes. Or we’re all going to go off a cliff together.

Kimberley Cole 23:26
And our last round our rapid fire round. So what is your one word to sum up the world of risk and compliance?

Saadia Mujeeb 23:35

Kimberley Cole 23:36
Whoo, nice. And your top risk for the year ahead.

Saadia Mujeeb 23:41

Kimberley Cole 23:42
Yes. It’s very interesting times in which we live. And the cure for the cost of compliance?

Saadia Mujeeb 23:51

Kimberley Cole 23:52
Mm hmm. And your outlook for the year ahead. Are you optimistic, pessimistic or neutral?

Saadia Mujeeb 23:57
I’m optimistic, but that’s just my personality.

Kimberley Cole 24:01
And then we’d like a few recommendations, which is just for you know, a bit more fun. So what’s the book that everyone should read?

Saadia Mujeeb 24:09
Liar’s Poker, a classic, but it’s fantastic.

Kimberley Cole 24:13
And something for us to watch?

Saadia Mujeeb 24:15

Kimberley Cole 24:19
Excellent. And what’s your favorite podcast?

Saadia Mujeeb 24:23
I have two, so I would say The Guilty Feminist is, of course, very good. And Simon Sinek. So he’s excellent for leadership, and especially as we change, focus with millennials, different career trajectory than everyone else did.

Kimberley Cole 24:42
I love a podcaster as everyone knows so I’m always adding to the list. So thank you very much, Saadia. It’s been a pleasure talking to you. And we’ve got lots of great information there. So thanks for joining us on Risky Women Radio.

Saadia Mujeeb 24:55
Thank you very much, Kimberley.

Kimberley Cole 24:57
This episode is brought to you by our founding sponsor Refinitiv. Refinitiv serves more than 40,000 institutions in over 190 countries. Refinitiv provides information insights and technology that drive innovation and performance in global financial markets. Refinitiv enables the financial community to trade smarter and faster, overcome regulatory challenges and scale intelligently.

Kimberley Cole 25:22
Thank you for listening to this exciting episode of Risky Women Radio to connect, champion and celebrate women in risk, regulation and compliance. I’m Kimberley Cole, based in Hong Kong. For more information on the Risky Women global network, head to our website in the episode notes and please be part of the ongoing conversation by subscribing to this podcast, connecting with us @RiskyWomen on Twitter or even reaching out to me directly by email.

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