The OER-GBCM Best Banks in Oman survey 2018 reflects a steady performance despite a challenging business environment.

The banking industry is going through a process of rapid change and transformation. This is being driven by a multiplicity of factors like myriad  regulations, disruptive models and technologies, enhanced competition and customers with heightened expectations.

According to a report by Deloitte titled, ‘2018 Banking Industry Outlook’ – “For banks globally, 2018 could be a pivotal year in accelerating the transformation into more strategically focused, technologically modern and operationally agile institutions, so that they may remain dominant in a rapidly evolving ecosystem.”

The report identifies six macro themes that should be critical for long-term growth – Customer centricity, regulatory recalibration, technology management, mitigating cyber risk, Fintechs and big techs and reimagining the workforce. Banks in Oman face or are likely to confront similar challenges in varying degrees. The good news is that they are aware and working on these issues.

Promising results
Despite a challenging business environment, most banks in Oman ended the year 2017 on a positive note. The total assets of commercial banks grew by 4.3 per cent to RO26,057.4mn in 2017. Commercial banks recorded an increase in their capital by RO 82.5mn at the end of last December to RO 1,272.5mn. The six commercial banks listed on the Muscat Securities Market achieved a combined net profit of RO338.3mn compared to RO 345.7mn in 2016.

In addition, banks are playing an important role in supporting the economy by financing projects in the public and private sectors, supporting small and medium enterprises (SMEs) and skilling Omanis and promoting Omanisation.

Says Abdul Razak Ali Issa, chief executive, Bank Muscat, “The key business lines of the bank recorded healthy performance during 2017. The bank witnessed further strategic progress, focusing on steps for future development and expansion. During the year, the bank was a major lender to projects in the oil and gas, petrochemical and power sectors.”

“The bank continued exercising its core business of lending with special attention to volume growth and focused on enhancing quality and returns during year 2017,” according to Abdul Hakeem Al Ojaili, CEO, BankDhofar. Sasi Kumar, acting CEO, Bank Sohar avers, “In support of the national agenda across all operations, Bank Sohar is actively furthering its support with a focus on the nation’s economic backbone – the SME sector. By monitoring the business landscape and implementing greater market segmentation strategies, new opportunities for SMEs and the local business landscape are becoming apparent. Our focus with the SME sector rests on providing knowledge.”

Social contribution
Talking about SME funding, Ahlibank’s CEO, Lloyd Maddock says “Banks are working or are lending around four per cent of their lending book to SMEs, which suggests that around $2bn is being put out to SMEs, based on a back of the envelope calculation. We are working towards it and have had a good experience with SMEs.”

In a similar vein, Sayyid Wasfi Jamshid Al Said, acting CEO, National Bank of Oman adds, “Attracting and developing local talent continues to be a priority for us as we look to support Oman’s wider socioeconomic objectives and promote national talents. It is key that we become an extension to the development of the country through enriching the talent pool of the Sultanate through training our employees, host open talks led by top thought leaders through the NBO Academy of Excellence, and provide a working environment that is educational and technologically advanced.” On the usage of technology, Andrew Long, CEO, HSBC Bank Oman thinks, “Technology is so critical to everything that banks and HSBC in particular are looking to utilize it.”

Overall, the prospects of 2018 look promising as the recovery in oil prices, efforts to diversify the economy and an improved investment climate are expected to help the national economy.