Sheikh Waleed K. Al Hashar, CEO, Bank Muscat shares the initiatives that have enabled the bank to emerge as the No. 1 bank in the Sultanate

How was Bank Muscat’s financial performance in FY2018?
Supporting the objective of economic diversification, Bank Muscat focused on opportunities in the potential sectors identified by the government. The year 2018 was better for the economy and the banking sector given the higher level of oil prices most part of the year and the government’s continued efforts to manage the fiscal situation prudently. The bank’s financial results have been strong and stable in the last few years. The momentum continued in 2018 with good credit growth and stable profitability.

The bank posted a net profit of RO179.63mn for the period ending 31 December 2018 compared to RO176.82mn reported during the same period in 2017, an increase of 1.6 per cent. Continuing the bank’s strong dividend payment track record, 40 per cent cash and stock dividend was proposed for 2018 compared to 35 per cent dividend in 2017. During the year, the bank focused on its dynamic vision ‘To Serve You Better, Everyday’ to make a difference in banking excellence.

How were your retail and corporate lending during the year?
Bank Muscat has consistently maintained a stable loan book growth with a conservative lending approach focused on high quality assets. The bank is the leading retail bank platform in Oman with approximately 2 million retail customers and the largest distribution network. At RO3.29bn, the retail banking division accounted for 26.8 per cent of the bank’s total assets in 2018.

With about 6,500 corporate customers, Bank Muscat is also the leading corporate bank franchise in Oman. The bank has strong project finance capabilities and a diversified loan portfolio across sectors. At RO4.46bn, the corporate banking division accounted for 36.3 per cent of the bank’s total assets in 2018.

The bank’s net loans and advances, including Islamic financing receivables, increased by 7.3 per cent to RO8.93bn as against RO8.33bn as at 31 December 2017.

What were the major milestones during the year? Can you talk about the measures to enhance retailing, ATM and CDM networks of the bank?
With almost 50 per cent of the network of self-service machines and kiosks in Oman, the bank’s e-channel network is growing steadily and includes 426 ATMs, 113 CDMs, 134 full function machines (FFMs) and 10 business cash deposit machines (BCDMs) for bulk deposits by corporates. The largest network of innovative e-channels unleash convenience and secure banking services across the Sultanate, including remote and far-flung areas.

In keeping with technological developments, the bank’s digital channels are witnessing consistent growth. In ongoing upgrades in 2018, the bank installed 60 new ATMs and CDMs. The bank maintains high uptime exceeding 95 per cent throughout its ATM/CDM network across Oman.

The self-serve ATM/CDM network forms a pillar of benchmark customer service and Bank Muscat can proudly claim that its network spread across the country is the preferred choice. Meeting the banking requirements of citizens and residents in all regions, the bank’s digital channel network is notable in remote areas.

The bank joined hands with MetLife, one of the world’s leading financial services companies, and signed a 10-year agreement to offer a bouquet of innovative insurance solutions. Aimed at providing a distinct banking experience, the bank launched Tablet banking to offer a convenient door-step service for clients. Enhancing convenience, cashless payment solution was introduced for the first time for parking meters at Muscat International Airport. With this, payment at the airport parking kiosks can now be made with debit and credit cards. As part of initiatives to improve customer experience, asalah Priority Banking expanded its reach across Oman by opening 5 new centers.

What about the measures taken to support SMEs?
Bank Muscat has launched various initiatives to support the country’s youth in the development of successful SMEs. During the year, the bank took strategic steps to strengthen the SME sector in Oman. The unique al Wathbah Academy programme widened its reach to benefit entrepreneurs in Sharqiyah governorate following successful programmes in Muscat, Sohar, Salalah and Nizwa. The programme reflects the bank’s commitment to sustainable development, strengthening the role of SMEs in the economic development of Oman. Al Wathbah Academy programmes across Oman impart the required skills and guidance for entrepreneurs drawn from diverse fields to embark on successful SME business ventures. The programme leads to accredited international certification by Project Management Institute (PMI). The bank’s experience in partnering with SMEs enabled it to develop non-traditional techniques for assessing credit risk and providing appropriate solutions relevant to their needs.

How was the performance of the bank’s Islamic banking window during 2018?
Meethaq Islamic Banking consolidated its leadership position, contributing to the growth and development of the Sultanate’s economy. Encouraging a strong savings culture, Meethaq launched Hibati savings prize scheme offering the largest number of prizes in the Islamic banking segment worth over RO1mn.

Aimed at promoting renewable Green energy in the Sultanate, Meethaq inaugurated Oman’s first solar-powered bank branch. The rooftop solar panel installation at the Al Khoud branch has the capacity to produce 50 kW electricity and reduces carbon dioxide emissions by 52.56 tonnes per year.

Empowering the community from a young age, the Little Investor programme launched in partnership with the Ministry of Education and Injaz Oman focused on developing children’s knowledge of finance to equip them with skills to become future entrepreneurs. Over 10,500 students were trained during the year in financial literacy as part of the Little Investor programme.

What were the major HR initiatives taken by the bank?
Reflecting a dynamic customer-centric strategy, the bank announced a new Organisation Structure, approved by the Central Bank of Oman (CBO), effective 1 January 2019. The new Organisation Structure is geared towards realisation of the bank’s future strategy, reinforcing its leadership position and empowering Omanis to hold positions of greater responsibility at all levels in the bank.

The bank’s Jadara Academy was awarded accreditation as an established Corporate Academy by the Global Association for Corporate Universities & Academies (G-ACUA). The accreditation endorsed Jadara Academy’s world-class professional standards in learning and development programmes.

With outstanding stable leadership, the bank achieved 94.67 per cent Omanisation, giving priority for Omanis in key positions. The bank’s human resources strategy is notable in gender diversity as 48 per cent of employees are women holding various positions, including senior Management positions. Of the total 3,779 employees, the number of women employees presently stands at 1,784.

What are the future plans to enhance operational efficiency and technological deployment?
Following a comprehensive IT infrastructure review in association with a leading international consultant and due consideration of optimisation and technological convergence, the bank launched a programme to implement the recommendations to make the IT infrastructure future ready.

To stay ahead of the ever changing cyber threats, the Bank has taken extensive efforts to ensure the effectiveness of its cyber security programs and upgraded to latest sophisticated tools and technologies to enhance its cyber security defence capabilities. Successful completion of the disaster recovery drill and business continuity exercise affirmed the bank’s highest business continuity standards.

During the year the bank worked on more than 45+ technology projects and around 30 of them are fully delivered. To manage and oversee the IT function and the large project portfolio, a well-defined Project and IT Governance framework is in place.

What are the bank’s priority areas and outlook for 2019?
Enhancing Customer Experience remains our key focus as envisaged in the Vision statement ‘To Serve You Better, Everyday’. We shall remain focused on this fundamental objective in all our operations. In line with the new Organisation Structure, the bank will continue to focus on developing competent human resources and adopting cutting edge technology to provide the ‘best in class’ service. We will mark our differentiation with innovative digital channels and products catering to all segments. The bank will be geared towards strong asset growth and innovation to improve operational efficiency, augment revenue, reduce risk and enhance customer experience, all in sync with fulfilling the social responsibility.