Khalid Al Kayed, CEO explains the initiatives that enabled Bank Nizwa record the strongest growth in Oman’s banking sector in 2018

How was Bank Nizwa’s financial performance in FY2018?

Wrapping up a successful 2018, Bank Nizwa has set a goal to become the benchmark in the Islamic finance sector for operational excellence. Focused on enhancing our products and service portfolio, systems and building a stronger human capital, we are taking the step forward towards achieving our 2020 strategy for growth and development.

During 2018, we led the segment’s market share, successfully demonstrating strong resilience and performance across all departments. We recorded the highest growth rate in the Sultanate’s banking industry with RO7.5mn in net profit representing a 98 per cent growth after tax for the period ended December 31, 2018. In addition, our total assets grew by 25 per cent to reach RO873mn compared to RO697mn in 2017, while total customer deposit portfolio reached RO712mn achieving a growth of 35 per cent year-on-year.

Despite the economic challenges in 2018 in general, we have been able to sustain our growth trajectory, not only in numbers but also in quality, experience, strength and integrity. The milestones we achieved to date are just the beginning of a brighter future and will open new avenues of opportunities for us. As we start 2019, I am proud of the foundation we have built as an Islamic bank and a contributor to Oman. I am confident that together with our stakeholders, we will be able to nurture the Islamic banking sector and deliver even greater benefits to the communities we serve.

How was your retail and corporate lending during the year?

Bank Nizwa’s unwavering focus on all aspects of the banking operation and also internally is why we continue to produce results. We have positive results in our earnings, expense management, Islamic finance quality and above all, customer satisfaction. At the heart of our customers’ satisfaction is the trust factor. We pride ourselves for our transparency when it comes to all transactions and processes. We always do our homework first on the market, changes, challenges and prospects. Key aspects poised for change or considered challenging in the marketplace include economic growth, corporate governance, and availability of talent. In addition, technology and keeping pace with it is paramount. We are always working towards delivering sustainable returns to our customers. This is where we come in as Bank Nizwa to provide retail customers with unique banking solutions crafted for them based on their financial requirements.

As for Bank Nizwa’s wholesale banking group, it provides a full suite of Shari’a-compliant products and services to meet the modern banking needs of government institutions, large corporates, project financing and small and medium-sized enterprises (SMEs). We also offer dedicated treasury, investment, international banking and trade finance services making it the business partner-of-choice for small to large enterprises across the Sultanate. The bank also offers a wholesale banking support division, which is a customer-centric function mandated to provide excellent customer service and quick turnaround.

What were the major milestones during the year?

We managed to thrive and take major steps towards consolidating our position as the Sultanate’s “go-to reference” in Shari’a-compliant banking. Our growth was fuelled by strict adherence to the values of Islamic finance to meet the needs of our growing customer base. In addition to offering a comprehensive range of alternative banking products and services, we have also taken steps to introduce innovative and new solutions that cater to the customer of today.

We realise the importance of fostering and nurturing mutually beneficial business relationships with corporates from all sizes, as well as small and medium enterprises. This is a key enabler for Oman’s economy to continue growing. We are playing our part by offering a corporate finance value proposition through the various tools available in our sector to help our customers grow their businesses. We are honoured to be the bank of choice for a diverse portfolio of clients looking to tap into investment opportunities. Therefore, last year saw us invest in products and services specifically tailored for corporate and wholesale clientele. In parallel, our retail and wealth management businesses and have been growing from strength to strength.

Rewarding our performance on all fronts is a longlist of awards including over 25 local, regional and international awards over the years. They include the ‘Strongest Islamic Retail Bank’ in the Sultanate at the Islamic Retail Banking Awards (IRBA) 2018 for the fourth consecutive year, and ‘Islamic Bank of the Year’ by the leading Corporate Livewire Finance Awards, and ‘Excellence in CSR in Islamic Finance’ award at the regional Corporate Social, to name but a few.

Can you talk about the measures to enhance retailing, ATM and CDM networks of the bank?

Bank Nizwa has also been committed to lead the segment’s market share towards new heights, starting with growing our network to reaching 13 branches. We implement a balanced strategy when it comes to brick-and-mortar expansion compared to digital footprint. We believe in the importance of personalised customer service while offering the latest innovative tools available.

Our retail banking division has been continuously working towards redefining the banking experience in the Sultanate by providing customers with innovative products and services that are true to the principles of Islamic finance. The division overseas a wide variety of personal banking solutions in addition to all branches, ATMs, and CCDMs operated by Bank Nizwa to date, it has experienced remarkable year-on-year growth by continuing to provide exceptional, tailored services that meet the needs of each individual customer.

Our expansion strategy has continued full-force throughout the last three six years and today, as a fully-fledge Islamic Banking institution, we hold the largest number of branches across Oman. In regard to ATMs, our MasterCard® ATM/debit cards are issued with a validity of five years and more for the convenience of our customers, the card can be used for cash withdrawal for free only over ATMs through the OmanNet. This same card can be used as a convenient tool for our customers through GCCNet and MasterCard network with access to over 2.5 million ATMs worldwide. In addition, we also offer the MasterCard credit cards, which are accepted at 35.9 million locations worldwide.

What about the measures taken to support SMEs?

Bank Nizwa has been at the forefront of contributing to the economic diversification efforts led by the Omani government by catering to various market segments and introducing specialised banking units and solutions. As a result, the introduction of Bank Nizwa’s SME & Commercial Banking demonstrates the bank’s proactive role in encouraging the expansion of the Sultanate’s entrepreneurial activities. We are always on the lookout to partner with SMEs, understand their financial requirements to help them lead sustainable businesses.

What are the future plans to enhance operational efficiency and technological deployment?

Bank Nizwa believes in the power of innovation as a catalyst for greater convenience and accessibility and have continued to utilise technology to create more seamless experiences for customers. These services have successfully put Islamic banking at their fingertips, allowing them to leverage the bank’s highly efficient products and services to better manage their funds with ease. The bank’s efforts to converge Islamic finance and technology have continued to garner critical acclaim from international institutions.

At Bank Nizwa, we consider all strategic choices to grow our operations and service offerings to meet the requirements of our customers across the Sultanate. The future holds a myriad of opportunities and we are at the heart of it, devising next steps to raise awareness over the benefits of Islamic banking and capturing market share. Our strategy is simple, innovation and technology for a sustainable growth of our operations

What’s are the bank’s priority areas and outlook for 2019?

Building on our success to date, Bank Nizwa’s roadmap for 2019 is centered on delivering an unparalleled customer experience, driving core business efficiency, fostering a high-performing working environment and enhancing our agility to adapt to rising trends. We are also keeping our unwavering commitment to raising awareness over the benefits of adopting Islamic banking and finance by all. We are an Islamic bank at heart, but, our service offerings and products that possess that competitive edge to cater and appeal to all segments whether retail, corporate, wealth, or other. Very simply put, we are a progressive yet deeply rooted in tradition and values bank, but most importantly, we are a bank for all.

What were the major HR initiatives taken by the bank?

We believe that people are the driving force behind any organisation’s success. In line with our strategy, we have invested time and effort to attract the best young Omani talent and implement an effective succession plan to provide a pipeline of future leaders for us and the industry in general. As a result, our talent management system remains a vital component of our long-term growth strategies. In today’s rapidly evolving Islamic finance sector, training and development plays the biggest role in determining our success, which is why we provide comprehensive learning experiences to anyone keen to pursue a career in banking. We are continuously investing in our people by helping them achieve their full potential and career goals. We were founded with the ultimate goal of fostering economic development and social progress, the success of our endeavours is apparent in a 90 per cent Omanisation rate conducted annually by our human resources department which is in line with our vision of developing local talent.