Abdul Hakeem Omar Al-Ojaili, Acting CEO, BankDhofar talks about various initiatives that has enabled the bank to emerge as the numero uno. Mayank Singh reports
Can you give us a brief overview of BankDhofar’s performance in 2016?
The bank continued to grow in all key areas in the year 2016 despite the current economic and financial situation driven by volatile oil prices in 2016. The net loans, advances and financing to customers reached RO2.99bn at the end of December 2016, showing a significant growth of 9.52 per cent from RO2.73bn at the end of 2015. The customer deposits mobilised by the bank achieved a growth of 11.58 per cent from RO2.59bn at the end of 2015 to reach RO2.89bn at the end of 2016. The total assets reached RO3.95bn in December 2016 as compared to RO3.59bn at the end of 2015, a growth of 10.02 per cent.
The key profitability indicators also showed positive growth with net interest and financing income achieving a growth of 8.26 per cent to reach RO97.66mn for the year 2016 as compared to RO90.2mn achieved in 2015. Non-interest and non-financing income such as fees and commission, foreign exchange profit, investment and other income have grown 18.67 per cent to reach RO29.69mn in 2016 as compared to RO25.02mn achieved in the previous year. This strong growth in the current market condition reinforces the trust and confidence of customers towards BankDhofar’s products and services.
What were the major initiatives taken by the bank in retail banking and enhancing its ATM and CDM network?
We at BankDhofar are continuously analyse market requirements and come up with products that suit the requirements of the market as well as our esteemed customers. We recently launched several retail products which include but are not limited to interest bearing products to enhance savings plan, where customers can earn interest on their deposit. We also introduced BankDhofar rewards programme for our credit card customers where they can earn reward points on their spending and redeem them across airlines, hotel and local merchants instantly. In addition to our current retail products such as housing loans, personal loans, car finance, high yield savings, we also have prize savings schemes which include prizes for all regions across Oman. These products attract many of our customers and benefit them to manage their financials and make their banking journey more enjoyable.
Our ATM & CDM network has expanded by adding new services like updating mobile numbers and instant money transfer to all local banks through our ATMs. Now all our credit card customers can change their card PINs through the ATM network, in addition we have added a new mobile top-up service provider (Renna Mobile) in our mobile top up collection on CDMs as we make sure that all our ATMs & CDMs are maintained before every holiday and weekend to avoid downtime and giving the best customer experience using our network. Cash services are available 24/7 and we make sure that our uptime stays above 99 per cent during the day by having a team to monitor our network and channels 24/7.
How was BankDhofar’s retail and corporate lending during the year 2016?
2016 was a good year for retail lending. Strong asset growth was central to our development during the year. The growth in personal loan was attributed to the tendency of more and more customers taking loans to generate additional income to meet their high-value purchases.
The industry is tightly regulated and widely regarded as stable, though an economic slowdown on the back of low oil prices could see lending growth slow in the coming years. Profitability is expected to decline marginally in 2017. Factors expected to pressure the profitability will be a lending rates erosion, higher borrowing costs, rising expenses and marginally higher loan provisioning.
What about the measures taken to support SMEs?
At BankDhofar, we look at SME as one of our national responsibilities, not merely limited to maintain regulatory ratios only. Over the past few years, sizable number of measures taken in SME support, especially in funding and spreading awareness in form of sponsorships. Despite the current economic challenges, our focus in SME segment remained high. We have dedicated centers to serve SMEs. BankDhofar is the first bank in Oman to introduce a dedicated SME Credit card.
How was the performance of your Islamic finance window during the year?
Since its inception, Maisarah Islamic Banking Services has been able to outperform the market in all key areas. Maisarah’s achievements are not only related to financial numbers but also in other key areas such as availability of wide range of financing and deposit products for customers, increase in branch network and customer satisfaction. With its diversified product portfolio and large customer base, Maisarah has become a key player in the Islamic banking industry. Based on exceptional performance in 2016, Maisarah Islamic Banking Services was awarded the “Best Islamic Bank in Oman” by the internationally renowned organisation ‘Europe, Middle East, and Africa (EMEA) Finance Limited.’
Maisarah started with a seed capital base of RO10mn in March 2013 and now stands at RO 55mn at the end of December 2016. Total assets have grown almost nine times to RO450.71mn at the end of December 2016 from RO50.02mn in December 2013. The capital base and customer deposit have grown from RO3.68mn at the end of December 2013 to RO285.67mn in December 2016. Maisarah’s earning assets have also grown at a tremendous pace. The total financing portfolio has grown from RO28.27mn at the end of December 2013 to RO311.59mn in December 2016 (i.e. growth of almost 11 times).
This outstanding performance has enabled Maisarah to recover its initial investment cost of RO2.20mn within two years’ time. Maisarah posted a net profit before tax of RO2.57mn at the end of December 2015. Year 2016 has also been very productive and we were able to post a profit before tax of RO3.18mn as on December 31, 2016.
What were the major HR initiatives taken by the bank?
The major HR initiatives taken by the bank were as follows:
Consolidating and automating all HR transactions
Focusing on talent management- aligning HR with business strategy, for implementing an integrated talent management processes and programme, creating a performance driven culture, and as a result creating the best employee experience.
We have developed and implemented the MAWAHIB Talent Development Programme to identify, assess and develop talent by implementing world-class development programmes which will be based on both structured learning delivered by the best in class learning and development partners and participation in real time projects which will enable our talent to improve their functional competencies. MAWAHIB Talent Development Programme was inaugurated in December 2016. The programme has two components one for leadership development and the other for management development to meet the development needs of two different critical talent pools.
‘Let’s talk’ is an initiative which reflects our commitment to transparency and continuous efforts being made towards BankDhofar’s vision to be the best bank in the Gulf and to make BankDhofar the best place to work. The Change Management team visited all regions to meet staff who volunteered to take part in the Let’s Talk discussions. This open invitation was received positively and the team met with over 200 staff in groups and individually over a period of two months. It resulted in a good representation of the overall staff.
What are your future plans to enhance operational efficiency?
Achieving excellence in banking practices is a journey for BankDhofar. It will involve changes in our current operating model, streamlining processes, considering control enhancements and leveraging the
Continuous improvement (CI) is a quality philosophy we adopted with an objective of enhancing customer experience by improving quality of banking services and reducing waste. We constantly measure the effectiveness of business processes and strive to meet more challenging objectives to satisfy our customers.
BankDhofar is transforming its processes to better satisfy its clients and employees’ experience. Lean Six Sigma is a methodology that we are implementing across our business processes to improve performance by systematically removing waste and improving business efficiency. It is our management approach to
focus on business performance improvement which will result in enhancing speed, efficiency and taking waste out of a business process leading to customer delight.
Our key emphasis while seeking to achieve operational efficiencies are
1) Instilling a culture that values efficiency
2) Aligning our operating model with the overall bank’s strategy
3) Leveraging technology tools to automate and manage operational capacity
4) Aiming for strategic cost optimisation rather than tactical cost reduction