Lloyd Maddock, CEO, Ahlibank Oman gives an insight into the bank’s remarkable performance and future plans. An OER interview
How was Ahlibank Oman’s performance in the financial year 2015?
The year 2015 proved to be a ‘high watermark’ year for Ahlibank, with the highest net profit after tax of RO27mn being recorded. Our other key targets were also achieved, with return on equity of 13 per cent, cost efficiency ratio of 35 per cent and NPLs ratio of one per cent. Progress on SME business development continued, with the SME lending portfolio crossing three per cent of total loans.
What were the measures taken by the bank to strengthen its retail lending and corporate finance/project lending in 2015?
To better serve our retail customers, the bank opened a new conventional flagship branch at Avenues Mall Muscat and relocated two branches to Mabella (conventional) and Mawaleh (Islamic). We also opened new customer service kiosks in shopping malls to bring the total to five, which serve customers throughout the day and evening. Further, we rolled out full service ATM/Cash Deposit machines, which proved popular, by attracting high transaction volumes. Automated processes were implemented to facilitate account opening and loan applications, to speed up response times. Further developments were implemented in mobile, internet and B2B channels.
Ahlibank remained very active in project finance, both in advisory and funding, by supporting a number of high-profile transactions. For example, Ahlibank and Ahli United Bank, our strategic partner, were sole underwriters of Orpic’s Muscat to Sohar pipeline project.
In what ways is your bank supporting small and medium enterprises in Oman?
In 2014, we established a dedicated team of SME relationship managers and have since introduced a full suite of conventional and Islamic products. Our services naturally extend to the personal banking requirements of entrepreneurs. In line with other Omani banks, we participate and support numerous SME development forums and training initiatives. The SME business has exceeded our expectations, and we are investing to grow this business further.
How did the bank’s Islamic finance window- Al-Hilal- perform during the last year?
The bank’s Al-Hilal Islamic business has made steady progress, and contributed 25 per cent of the bank’s bottom line in 2015, with assets crossing RO250mn. Currently, we see a funding gap between loans and deposits, which is reflective of the Islamic banking sector in Oman. We have therefore designed and launched a Mudaraba-based transactional savings account, called Al Namaa, which pays attractive expected profit rates. This has received an encouraging response from new and existing customers. We also have seen strong appetite for our Signature Islamic credit cards, which pay a percentage of transaction fees to charities in Oman. Looking forward, we expect to see sovereign and corporate sukuk issuances, which will provide alternate funding sources and investment opportunities within Oman.
Can you share details about your branch and ATM network and are there any plans for upgrading your presence in the year ahead?
We have a footprint of 20 branches across Oman, of which seven are Islamic. As mentioned, the branches are supplemented by five customer service kiosks in shopping malls which incorporate ATMs. In total, we have 33 ATM and CDMs. We continue to invest significantly in all channels.
What are the measures taken by the bank to improve its HR practices?
There have been material changes necessitated in terms of HR practices. We did however introduce a senior management mentoring programme to support our annual intake of graduate recruits.
Can you tell us about your plans for FY2016?
Notwithstanding the more challenging economic landscape, it is business as usual for Ahlibank. Our strategic partner Ahli United Bank has launched wholesale and private banking services in Dubai DIFC, with CB Ganesh as the CEO. Ganesh was previously deputy CEO business at Ahlibank, and we are already working closely with him and his team, to support our customers in Oman, the UAE and beyond through our enhanced geographical coverage at DIFC.