Khalid Al Kayed, CEO of Bank Nizwa, talks about the bank’s performance, expansion strategy, future outlook and the Islamic banking industry in Oman

Bank Nizwa is celebrating its fifth anniversary this year. Can you give us a brief overview of the bank’s performance?
It has been a remarkable journey so far. We are proud of five years filled with achievements across all levels of operations and services. We have recorded an increase of 3,343 per cent in net profit after tax to RO3.8mn for the financial year that ended December 31, 2017, achieving the highest growth rate in the Sultanate’s banking industry for the financial year. In addition, we achieved a year-on-year (YOY) 35 per cent rise in total assets, a 50 per cent rise in customer deposits, a 43 per cent surge in financing portfolio, and a 29 per cent rise in operating income from December 2016 to December 2017. We have effectively demonstrated strong resilience and performance across all departments and units.

What were the major milestones during the year 2017?
2017 started on a high note at Bank Nizwa, as we marked a number of milestones. We were successful in expanding our reach across Oman ending the year with opening our 12th branch in Al Ma’abela. Added to that, committed to raising awareness of Islamic finance, we successfully co-launched Oman’s first roadshow to showcase the great advantages in Shari’a-compliant banking, insurance, and investment tools and services to empower students, entrepreneurs, and public and private sector employees. Reflecting our effective product portfolios and services, we have been honored with a number of prestigious awards this year. Our long-list of awards includes, ‘Excellence in CSR in Islamic Finance’, ‘Best Islamic Services and Products in Oman’, ‘Strongest Islamic Retail Bank in Oman 2017’ and ‘Pioneer Islamic Bank in Oman’ to mention but a few.

What about your ATM and branch expansion strategy?
Since inception, we have been dedicated to follow our strategy of bringing Islamic banking closer to customers’ doorsteps and fingertips. Firstly, we have been consistently introducing forward-thinking products and services such as our online and mobile banking solutions to appeal to a greater audience. We have been focused on expanding our reach across the Sultanate and raising awareness on the benefits of Islamic finance through our network of 12 branches and our branch-on-wheels, which visits cities across the country. Our expansion strategy, therefore, is to be accessible and to cater to a wide range of audiences with an unmatchable banking experience, by effectively combining the most advanced Shari’a-compliant tools online and offline with today’s dynamic financial needs.

What are the new products and services? Do you have plans to further expand/ diversify your product portfolio?
We are committed to deliver a convenient, seamless and hassle-free banking experience for our growing customer base. That is why we offer a tailored suite of financing, savings and investment products for individual customers, corporations and industries across our branches around the Sultanate. We are continuously working towards redefining the banking experience in Oman by providing customers with innovative solutions.

Our drive towards offering customized services for different areas of industry opens up new areas for growth for both the financial sector and the national economy; by further increasing the level of competitiveness in the market and by harnessing new revenue opportunities through our alternative financing tools.

How is Islamic finance industry shaping up in Oman and what are the major challenges?
The business environment in 2017 continued to be challenging for the finance industry, given slower growth rates in some key economic sectors, more restrained liquidity and greater competition in the market. Despite these challenges, Islamic finance has proven its sustainability and resilience in the market as customers opted to utilise Islamic finance in Oman in such a short period of time. In order to ensure this continued growth in the industry, it is essential to carefully assess the opportunities presented to us.

We have successfully executed our visionary 2020 strategy and are effectively operating on a solid regulatory framework with the Central Bank of Oman that is working in tandem with other conventional banking entities to overcome the challenges impacting the industry’s performance and customer expectations.

In relation to our growth strategy, and our ability to adapt to the economic shifts, we see great opportunities in the future as we focus on delivering exceptional services and direct our efforts to raise even more awareness on the benefits of Islamic finance in Oman.

How was the impact of falling oil prices on the banking sector?
With the challenges that the banking sector faced with the oil crisis, we have managed to excel under those economic conditions by working hard towards strengthening our position as Oman pioneer Islamic financial institution. Since opening our doors five years ago, we have been inspired by our values of offering the best for our customers, which is transparency, trustworthiness and service excellence. In addition to this, the Central Bank of Oman’s regulation and supervision has made the banking sector resilient to economic shocks. While navigating a challenging year for liquidity, we remained focused on executing our strategy of being a Shari’a-compliant financial services provider with a strong balance sheet due to excellent asset quality and robust capital ratios. We continue to operate responsibly and sustainably in the interests of our shareholders.

What is your outlook for 2018?
Our main objective is to continue to elevate our performance by following our strategic roadmap, which is built on five pillars of development including financial performance, technological advancement, market share, team and culture, in addition to progressive organization. We have already seen strong results that reflected our strong business model and commitment to delivering service excellence. In the coming months and years, our customers can expect to receive more personalized solutions and services as we introduce more innovative Shari’a-compliant instruments and maximize shareholder value.

We will continue to work closely with the Central Bank of Oman and our stakeholders to take the Islamic banking sector to new heights with great focus on providing benefits and giving back to the communities we serve. We are highly committed to continue to spearhead the growth and development of Islamic finance and banking in Oman by cooperating and partnering with our communities and a number of private and public institutions.