Tony Mahoney, CEO, BankDhofar shares his thoughts on the bank’s performance and its future initiatives in an interview with Mayank Singh .
How was BankDhofar’s performance in the first six months of 2013? 
It’s been a very strong first six months for BankDhofar, with much progress in the way the bank is run for the benefit of our customers and faster service; and a lot of efforts have been put into the development and training of our staff and improving our technology. We have reengineered many processes. For example if you apply for a housing loan to BankDhofar today, you can get a house within five days. There are few banks which can achieve this around the world. So we are not just best in market but best in class. In consumer loans we are going to take it to a 24-hour clearing process and in the wholesale banking market we continue to strengthen the team by hiring some top-quality people. What people want in today’s fast moving world is a fast moving bank and that’s the aim of BankDhofar.
How have you gone about upgrading the skills of your staff, particularly those of the Omani staff?
We do this by carefully selecting the right people while recruiting them. When they join us they go through a very forward looking induction programme, which allows them to get off to a good start. We have launched an academy which helps aspiring young staff to management positions and there are specific programmes for women and these have been very successful and hugely well received. Our communication is good as every employee receives a letter every week from me as the CEO regarding what is happening in the bank and some of the key issues that I expect from them as a part of a winning team. It is important that we consider ourselves as one family though we are spread across 63 branches plus a certain number of kiosks. So it is important that we are close to our people. Every Sunday morning all the teams get together and the CEO’s message is given to them by their respective branch managers, who also add their local touch to it in terms of what it means for them in their branch. Even when a customer travels to another branch he gets exactly the same treatment as his home and this is unusual in the market.
You spoke about upgrading your technology backend. What kind of a platform do you use and what are its advantages?
We use Infosys’ core banking platform Finacle and it works well, but it all comes down to how we use it and what we get out of it. Our ATMs and CDMs work over 99.5 per cent of the time. We are in the course of introducing mobile banking in the course of the next few weeks and it is going to be a very good application with great features. Our call centres are available 24/7, with very good technology that allows us various options. For example, if we find that the call volumes are very heavy then it allows for a call back facility and as a result customers never have to wait to be answered. International transfers and foreign exchange transactions are also possible through Internet and we are the first bank in Oman to offer this facility.
What are the initiatives being taken by BankDhofar to strengthen its retail banking presence?
Our branch network is being upgraded as we speak. We began the process some 12 months ago, with a complete redesign of the look and feel of the branches. In the past, 90 per cent of the space in a branch was given to the staff and 10 per cent to customers. Now we have reversed that, with 90 per cent of the space being given to customers and 10 per cent to our staff. We have also segmented our branches into the VIP area, business banking area and the general banking area and that works very well and has been well received. The first branch that had the new look is the branch at the Grand Mall. It also has very convenient opening hours; so for example it closes at 8.00pm at night and this will be extended further during the month of Ramadan. We expect to have more and more branches in key centres, which are open in the evenings as well as the day time because that is what customers want, especially since the aligning of the working days. We also provide our customers with the best technology to deal with us online, but we also ensure that our branches are available for them. We have 63 branches which are up and running plus new branches opening in Salalah Grand Mall, Sohar, Adam and Ghala. In addition, we have kiosks in two shopping malls and we have plans for several additional new branches. We have two Islamic finance branches one in Muscat and another one in Salalah and they are being very well received.
A number of bankers and analysts aver Islamic finance has not taken off as expected. What has BankDhofar’s experience been with Islamic finance till now?
Our experience has been different and it all depends on your expectations. We expected it to be a fairly slow start, but we have been pleasantly surprised by the number of new customers that we have attracted. Moreover 80 per cent of these customers are not BankDhofar customers, but they are coming from other banks. The demand from businesses is very strong and we expect to see a continued growth of the business through corporate facilities as well through personal deposits and facilities.
How is business banking shaping up for BankDhofar?
This is a very important market for us and even before the government directive we were acutely aware of the need to grow our business banking presence. We have opened seven business centres across Oman in places like Salalah, Sohar and Sur and each of these is designed to cater to small-to-medium sized businesses, who want a local business service and they are proving to be very popular. For larger corporates we have introduced an advisory service, and have won some very big mandates recently. We have strengthened the team on the large corporates side, by bringing in some strong people as clients to see a strong management and to get personal service.
The Central Bank of Oman (CBO) has changed the ratio of personal loans portfolio of commercial banks from 40 per cent to 35 per cent while increasing the home loan limit to 15 per cent from 10 per cent. Will this affect the profitability of the banks?
I don’t expect it to affect profitability, though the competition in the market is very strong. But most of the competition tends to revolve around price and what we are aiming to do is to focus very much on service, so that when customers hear BankDhofar they know what to expect and they get it fast. This means that we are always competitive, and are able to preserve our margins. The CBO rules have curbed some of the personal lending but frankly it was a welcome move because it avoids excessive indebtedness which is not good for the bank or for clients.
There is also a feeling that Oman is getting overbanked, with two new banks entering the fray. Do you feel the same?
You could easily argue that with 19 banks and seven Islamic finance windows, Oman has too many banks for a population of three million people. It also has one very strong player and a clutch of smaller players who are roughly of the same size. So we are overbanked but banks are in good shape and there is room for consolidation in the sector for sure, but that may or may not happen.