Abdul Hakeem Omar al Ojaili, Acting CEO, BankDhofar, sees the promotion of small and medium enterprises as an important part of the Sultanate’s economic development.
Supporting SMEs
We strongly believe in our role and the weight of BankDhofar as a key player in the Omani private sector development and the growth of the national economy. In fact, BankDhofar was one of the first banks to introduce SME-related solutions, products and services. Despite the fact that the SME term was relatively new to the Omani market, we have been working for years to nurture and promote good business ideas generated in this sector, providing financial solutions and strategic guidance to entrepreneurs under our corporate banking umbrella.
We recently introduced a specially designed account (Entrepreneur Account) to provide the best banking and financial solutions to SMEs. It is developed to offer a vast range of options that are tailor-made to suit the diverse needs and requirements of SME customers and ambitious entrepreneurs in all business areas. Additionally, we have dedicated entrepreneur business centres to offer easy access to SME owners and we have adapted several strategic initiatives to further cement our stronghold in the market and cater to all businesses from large corporates to SMEs. This includes a full array of import-export products and services such as centralised trade finance facilities, competitive foreign exchange rates, faster payments, quick turn-around time, improved cash management, competitive service charges, import letters of credit and collection bill services, arranging buyer’s credit, export LC advising and confirmation, export collections, export bill purchase and discounting, bid and tender bonds, receipts of remittance from overseas (inward remittance) services and overseas payment services (outward payments). We are expanding our outreach to SME customers nationwide through BankDhofar branches and specialised corporate and business centres in select locations.
Financial performance in 2014
BankDhofar continued to grow in all key areas in the year 2014 and crossed RO3bn in total assets and RO2bn in net loans, advances and financing to customers, showing a growth of 18.42 per cent from RO1.90bn at the end of December 2013. The customer deposits mobilised by the bank achieved a growth of 22.17 per cent from RO2.03bn at the end of 2013 to reach RO2.48bn at the end of 2014.
The key profitability indicators have also recorded positive growth, as net interest and financing income recording a strong growth of 15.46 per cent reaching RO76.79mn for the year 2014 compared to RO66.51mn in 2013. Non-interest and non-financing income such as fees and commission, foreign exchange profit, investment and other income have reached RO22.06mn in 2014 as compared to RO23.04mn achieved in the previous year.
The cost to income ratio during the year 2014 improved to 46.70 per cent as compared to 50.60 per cent in 2013. The provisions for loan impairment, net of recovery (excluding legal case recovery), during the year 2014 amounted to RO6.93mn, as against the RO4.23mn during 2013 in line with loan growth.
The net profit for the year 2014 achieved by the bank is RO40.45mn as against RO35.41mn, showing an increase of 14.23 per cent year-on-year, excluding the effect of legal case write back of RO26.1mn (before taxes), in 2013. Net profit for 2013 including one-off legal case recovery is RO58.51mn.
Retail and corporate lending
The bank pursued its focus on key sub-segments within retail banking segment, leveraging our nation-wide distribution network, combined with well-organised marketing efforts and our dedicated sales force that offers products and services meeting and exceeding client expectations. We were also able to continue our strength in retail lending. In respect of corporate finance/project lending, through our strong team of relationship managers, and combined with our distribution network strength, we continue our journey with good growth. Focus on customer experience and service delivery is underlying key requirement for ensuring continued growth and the bank does not spare any efforts to improve and enhance service delivery.
Islamic finance performance
Maisarah achieved outstanding results during 2014 in its second year of operations after its launch in March 2013. The Islamic banking window’s financial performance reflected strong growth as the total assets increased to RO191.79mn at the end of December 2014 from RO50.02mn at the end of 2013, a growth of 3.83 times. The gross financing has grown remarkably well from RO28.27mn at the end 2013 to reach RO133.03mn in December 2014. Customer deposits raised by Maisarah has recorded an impressive growth and increased from RO3.68mn at the end of 2013 to RO97.01mn at the end of 2014.
Maisarah Islamic banking services became profitable in its first full year of operations in 2014; so we are more than satisfied with Maisarah’s performance at this early stage of its development cycle.
The year 2015 is expected to be a challenging as the competition in Islamic banking sector will continue to increase. Maisarah plans to distinguish itself from competition by focusing on providing outstanding customer service, developing and launching new products and investing in technology to provide the best customer service experience in a timely and convenient manner.
Branch, ATM and CDM network
We have a strong presence in corporate banking, consumer banking, treasury and project finance, as well as an extensive network of branches across the Sultanate. Today we have 64 branches that are strategically located in different parts of the country, and we are planning to further extend our outreach. We are looking forward to opening a new branch in Khasab this year. In order to add to the convenience of our banking channels, we have also expanded our ATM/CDM network. Today we have 142 ATMs and 52 CDM facilities located in various parts of Oman. We have a plan to expand our ATM/CDM network to cater to the needs and requirements of BankDhofar customers across Oman.
HR initiatives
At BankDhofar we believe that our strength as an organisation comes from our commitment to follow highest international standards and best HR practices in the banking sector. We strive to see BankDhofar taking the lead in terms of organisational culture, work environment and HR practices. Our HR division provides the overall strategic direction of the human capital management functions with the mission to serve the business in attracting, recruiting, developing, and retaining the best and the brightest talents in the market, in addition to nurturing a competent and engaged workforce to effectively deliver the bank’s business strategy. We are committed to implement highest levels of HR functions and practices in areas of recruitment and selection, learning and development, performance and compensation, employee engagement, staff benefit services.
Currently, the bank employs more than 1,300 staff, achieving 92 per cent Omanisation, which is above the specified regulatory requirement of the Central Bank of Oman. This requires both commitment and continued investments to effectively maintain our Omanisation programme and due to our commitment, a robust management team leads the way to ensure long term stability and continuity, resulting in sustained business performance. The HR division works to align the HR strategy with the overall corporate business strategy to ensure that the bank continues to deliver a strong performance in a sustainable manner, aimed at creating a lasting performance culture in an environment that gets the best out of human potential by creating a positive environment in which there is no room for complacency. We are very proud of what has been achieved in the past few years and we look forward to achieve more.
Future plans
While looking closer at the Omani national economy, we see continuous growth and no signs of slowing down of the developmental projects despite the change in oil prices. This results in stronger confidence and encourages all sectors to continue to contribute to the growth and diversification of the national economy. We at BankDhofar have set our growth strategy to fortify our role as a leading financial institution. In addition to the unique products and services we offer in the market, we also pledge to continue providing financial solutions to cater to the needs and requirements of our customers’ and to meet their aspirations. We have done well, and we will continue to add much value to the banking sector in the Sultanate by providing the best banking experience for our retail and corporate customers.
Supporting SMEs is one of the key pillars of our operational strategy, in addition to supporting larger corporates and government institutions through customised project financing solutions. We have also set plans to provide more job opportunities for Omanis and participate in the knowledge transfer and exchange of expertise in the business sector. We are committed to apply best international banking practices and to follow highest standards in the banking sector, employing state-of-the-art technology and opening doors for creativity and innovation. BankDhofar believes in its role as an integral part of the community, and our operational strategy includes various social initiatives that aim to support the community across the Sultanate, focusing on the environment, social development and staff engagement.