Amin Al Husseini, CEO, Oman Arab Bank talks about the measures being taken by the bank to enhance its customer service.
Financial performance in 2014
Oman Arab Bank (OAB) clocked a heartening financial performance in financial year 2014. Some of the highlights of the performance are as follows:
OAB has recorded a net profit of RO28.4mn for the financial year 2014 as compared to RO25mn for 2013. The YoY increase in the net profit of 13.5 per cent has been the result of a healthy growth of business volumes and increased non-interest income.
OAB continues to provide consistently high returns on equity and assets. The return on equity is 13.8 per cent and return on Assets is 1.7 per cent for 2014.
Capital adequacy as at December 31, 2014 is 15.14 per cent, which is well above the minimum level of 12.625 per cent required by CBO.
OAB has maintained a high level of liquidity with the loans to deposits ratio at 86 per cent and liquid assets at 23 per cent of the total assets.
Total assets of the bank increased by 25 per cent to RO1.82bn as on December 2014 from RO1.46bn as on December 2013. The gross loan portfolio grew by 17 per cent reaching RO 1.3bn as on December 2014 from RO1.11bn as on December 2013 while the customer deposits increased by 28 per cent from RO1.15bn as on December 2013 to RO1.47bn as on December 2014.
Branch, ATM and CDM network OAB is taking the following measures to enhance its retailing network to delight its customers :
Rolling out a number of initiatives aimed at enhancing our retail customer experience such as instant debit issuance at branches, streamlining loan origination and approval process to dramatically decrease turnaround time, achievement of ISO certification in Total Quality Management at our call centre and our retail sales unit, further enhancing our retail banking proposition
Launching a number of value added features to enhance our retail banking proposition such as airport lounge access for our credit card holders; launching a discount promotion through a number of merchants; expanding our acquiring business to include a number of government ministries and private merchants; tying up for end user real estate financing with a number of high-profile real estate projects and integrated tourism complexes.
Further strengthening our ATM and CDM network with a number of new locations bringing the total to 120 plus machines strategically located throughout the Sultanate.
Embarking on a branch upgrading project aimed at improving the look and feel to improve on the customer experience and journey.
Retail and corporate lending
The following measures were taken by OAB to strengthen its retail and corporate lending:
Increasing the work force by hiring high skilled staff to enhance corporate and project financing market share.
Targeting new businesses while maintaining the quality of credit.
Focus on cash and trade business to enhance the trade business which would enhance the bank’s non-funded income.
Supporting SMEs
OAB believes that Small and Medium Enterprises play a vital role in developing the national economy through providing employment opportunities and encouraging self-employment. Towards meeting this objective, we have introduced “Tomouhy” to provide the necessary financial solutions for SMEs. At Oman Arab Bank, we have many innovative financial products that can make all the difference to the business success. Our financing covers working capital finance, terms loans for capital expenditure, contract & equipment finance, import and export finance and other finances.
Any well managed, profit making business that has a valid commercial registration and business operations in the Sultanate is eligible to apply for SME finance.
In addition to the above, OAB is the pilot member of a government programme that guarantees 50 per cent of a loan to small and medium enterprises (SMEs), a joint programme between the Ministry of Commerce & Industry and Oman Development Bank to promote entrepreneurship among Omanis who have viable business ideas, but lack capital for the start up or expansion of an existing business.
As at the end of 2014 OAB has exceeded the minimum lending to SME required by CBO.
Islamic finance
In 2014, OAB launched an independent Islamic banking window under the brand name ‘Al Yusr’ to promote the ideals of a prosperous society and stable economy, through its wide range of innovative products and services based on Islamic principles. Al Yusr started its operation in July 2013 with the opening of its flagship branch in Wattayya, Muscat. Considering the fact that Al Yusr started its operation after the launch of other banking windows, it took us a while to build our business. We are steadily growing our books with sizable increase in financing as well as deposits.
HR initiatives
As part of our efforts to become the employer of choice in Oman, we continue to invest heavily in our human capital. In this regard, OAB has launched a performance management system that is based on SMART staff objectives to ensure strategic alignment with the bank’s vision and core values.
The bank has also launched several initiatives and programmes that focus on enhancing employee engagement across the institution. For instance, a new Human Resource function, namely, Employee Relations and Workplace Development (ERWD) has been introduced to further boost the communication between management, supervisors and employees, and to encourage employees’ participation in activities within employee engagement objectives. This function goes beyond the traditional ER function which focuses on managing grievances. ERWD aims to create a positive work environment that ensures our employees are valued, encouraged to learn, and supported to achieve outstanding professional and personal growth. Moreover, our HR Division is dedicated to keep pace with the latest HR technologies and solutions that further improve our HR processes. In this regard, a bilingual employee/ manager self-services web-based solution was established to enable employees and managers to efficiently manage their HR-related information online.
Future plans
We will continue our efforts to enhance operational efficiency. There will be major investments in front-end systems and applications that will take the customer experience to another level. These improvements will be felt by retail as well as corporate clients across all delivery channels. Having said that, the most important transformation that will occur in the bank will revolve around the human capital where several initiatives have already started with the objective to further develop key staff and provide a work environment where they can excel and flourish. These steps are part of the bank’s core mission to become the employer of choice for talented Omanis.