Diversifying revenue streams

Sasi Kumar, Acting CEO, Bank Sohar says the focus on fundamentals and best practices helped the bank deliver on customer expectations. An OER report

Bank Sohar

How was Bank Sohar’s financial performance in 2017?

Bank Sohar’s 2017 performance was catalysed by rapid progress on all business fronts, despite a range of economic challenges posed by a sub-optimal business environment. The bank has managed to minimise the impact of economic fluctuation whilst bolstering its position in the Omani market. By maintaining a keen focus on the fundamentals of best practice, including the continued review and enhancement of existing policies and procedures, the bank has continued to deliver excellence in customer service whilst gaining market trust, as noted by measurable KPIs and growth across multiple verticals, revenues channels, and work streams. These efforts were supplemented by an intensive drive by the management to improve the overall quality of assets, enhance yield growth and reduce operational expense.

Net profits for the year ending December 31, 2017 amounted to RO25.33mn, representing an increase of 32.54 per cent compared to the previous year while net interest income during 2017 increased by 5.91 per cent to RO47.72mn from RO45.05mn in 2016. The net operating income for the year was RO41.61mn compared to RO37.83mn in 2016, an increase of 9.99 per cent, and all these figures are a testament to the strength of the bank’s business model and the collective effort of its workforce.

What were the major milestones during the year? Can you also share the measures taken to enhance the bank’s retail business?

Having completed a decade of operations, the bank has secured itself as a prominent financial institution in multiple market segments. Its strategy remains on track given its ever expanding customer base, strategic enhancements to products and services, its focus on a digital culture in the front and back offices, and most importantly customer centricity, in addition to a growing Islamic finance portfolio and accompanying services.

The bank maintained a sterling year of local, regional, and international awards, and claimed a further tranche of accolades including the: Excellence in Corporate Leadership Award from Alam Al-Iktisaad Wal A’Mal (AIWA), which highlights Oman’s best performing companies;

Oman Economic Review’s Top 20 Award

Insights Driven Banking Award in Emerging Technologies Led Innovation category and; (at the 2017 edition of the Infosys Finacle Client Innovation Awards)

Core Banking led Digital Banking Transformation award at the Innovation in Project Management for Mid-Size Banks, (at the 2017 edition of the Infosys Finacle Client Innovation Awards)

Golden Order of Merit for CSR from the Arab Organisation for Social Responsibility

And as a key contributor to the bank’s consistent growth in business, the retail division continues to offer one of the most comprehensive ranges of products and services in the market, reflecting our commitment to providing banking excellence, innovation, convenience, and prudent financial solutions. Stemming from this belief and fulfilling customer needs, the bank progressed further in its branch network which has now reached to 30 branches spread across the Sultanate. ATM channels also follow up on an ambitious expansion strategy that envisages providing reliable and convenient banking solutions in addition to the rapidly growing CDM facilities.

Al Mumayaz Savings Scheme has been revamped and introduced to deliver more than 1,400 winners for 2018, an increase from last year owing to the sheer diversity of prizes that result from exclusive, branch, children, general, and female Draws. Our calibrated prize structure guarantees the maximum number of wins per draw compared with any other product of the same category in the industry.

Amongst the milestones achieved in retailing, Bank Sohar launched the Excel Signature Credit Card. Strategically positioned within the bank’s power line-up of the Excel Platinum Credit Card and Excel Diamond Infinite Credit Card. Customers can also benefit from a number of similar customer-driven value add-ons such as the E-channels, encompassing SMS Banking, Internet Banking services and a specialised Mobile Banking Application for Android and iPhones, which allow customers to access their bank anytime and from anywhere. Furthermore, Bank Sohar has implemented the Mobile Payment Clearing and Switching System (MpClear), where customers will be able to conduct funds transfers on the Bank Sohar Mobile Banking App, using their phone numbers instead of their account numbers, which allows transfers 24×7.

What about the measures taken in support of SMEs?

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. The bank’s SME Unit has played a vital role to nascent industrial clusters in Oman and has emerged as a trusted guide, continuing to focus its vision to follow the government’s directives in deviating from oil revenue streams economy and towards the potential of SMEs. In 2017, the SME Unit aimed to become a knowledge partner, providing total business solutions to budding entrepreneurs, as well as introducing SMEs to entry-level risk management.

How was the performance of Sohar Islamic during 2017?

Islamic Banking in the Sultanate has grown by leaps and bounds over the past few years, gaining momentum on the back of continuous product innovation and improved customer service. Net Income from Islamic financing and investing activities for Bank Sohar amounted to RO3.77mn compared to RO2.68mn in 2016. This reflects a healthy growth of over 40 per cent when compared to the previous year. With such results, Sohar Islamic is continuing to contribute positively to the overall portfolio of activities of Bank Sohar.

What were the major HR and Omanisation initiatives taken by Bank Sohar?

The Human Resources Division continues to enhance the competencies of employees and therein contribute to the national agenda, specifically the growing competitiveness of Oman’s workforce. Skill development has remained at the forefront of the bank’s strategic operational planning and integral with its overall growth and performance. The bank’s focus remains strong in the areas of service excellence and expense management.

The bank continues to train new employees through its successful ‘Branch Banking Programme’, ensuring they have the right skill sets and all relevant knowledge to better serve the Bank’s customers and stakeholders. At a senior level, the bank continued addressing training requirements enrolling those with high potential to courses delivered by Harvard Business School to develop and refine Omani skill sets to the international standard.

Omanisation rate and the employment of Omanis remain of chief importance to the bank. Consequently in 2017 the bank achieved the required Omanisation ratio in both conventional and Islamic banking. At the end of 2017, the Bank has reported an Omanisation rate of 92 per cent. Underlining the bank’s commitment towards providing job and training opportunities to young Omanis, new recruits saw a strong intake of young Omani graduates, in addition to various promotions of Omani nationals.

Please share your views on the outlook for FY 2018?

In 2018 we aim to further leverage our engagement with all primary non-oil sectors as a core driver of growth. This will subsequently benefit retail and corporate business with improved performance, whilst helping to identify new opportunities within each segment. In consideration of the growing challenges across the banking sector as a whole, notably the increase in competition, the bank has reinforced its focus on diversifying revenue streams in order to achieve a greater market share, both in the mid and long-term.


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