Sayyid Wasfi Jamshid Al Said, Acting CEO, National Bank of Oman says the bank’s unwavering performance has enabled it to continue delivering innovation and excellence in addition to playing a leading role in supporting Oman’s socio-economic progress
How was National Bank of Oman’s overall performance in 2017?
2017 has been a challenging year, given global uncertainties specifically in the banking industry. Despite the operating environment, our core business remained strong and thanks to the growth strategy we put in place, we made good progress in diversifying our revenue streams and in maintaining a strong balance sheet. We achieved a healthy loan growth, have the best spreads in the market, recorded strong fee income growth of RO39.2 million, a 13.5 per cent increase. The bank’s robust capital position was demonstrated when NBO’s core ratio was at a stable 12.6 per cent against the regulatory requirement of 8.81 per cent. We will continue to deliver the internal lean management program ‘Al Jawda’ that introduced continuous processes’ improvements through the elimination of waste process management with a greater focus on quality. Also, NBO made substantial enhancements to the bank’s trade finance operations to deliver a superior banking experience by restructuring our existing processes, enhance the employees’ skills, and re-aligning our business model to match our customers’ needs.
As the only Omani bank operating in the UAE, we created a business environment which best suits our customers in the UAE and in Oman by making banking more seamless, productive and efficient. We introduced a value proposition that is designed to simplify cross-border banking transactions between the UAE and Oman. We also implemented various initiatives to de-risk the UAE book and to ensure we maintain quality assets.
In addition, we have also focused on empowering our people, enhancing our processes and technology. We strengthened our leadership team in the UAE with key roles to ensure we have effective operational controls in place. We completed a comprehensive due diligence exercise across all accounts and enhanced our existing policies and procedures.
By adopting a prudent risk management approach that includes ongoing monitoring and early warning indicators to mitigate potential risks. This is a key focus area for NBO.
What were the major milestones during the year?
In 2017, we continued to make headway in our transformation process, a process we began some years ago. Our aim is to provide convenience, easy and innovative solutions that will improve the quality of our customer’s lives. I am very proud to say that we have been able to achieve what we set out and are ahead of the industry due to our multi-dimensional vision with a three-pronged approach that addresses ‘providing compelling solutions, superior customer experience and a first-class workforce’.
We provided our customers with compelling solutions that best fit their lifestyle. We demonstrated our commitment and dedication to them through helping them grow their businesses, cash management, providing strategic advisory on key merger and acquisition deals or wealth management for high net worth clients. Our Islamic banking window, Muzn was voted as the ‘Best Islamic Banking Service Provider’ in Oman because customers appreciated the value of the new private banking offering. To expand our reach to other GCC markets, we invested in improving our operations in the UAE market. As the only Omani bank present in the UAE, NBO designed an exclusive service to simplify cross-border banking transactions between Oman and the UAE. Through a seamless banking approach, it allowed companies in both countries to safely and securely make instant fund transfers from their NBO accounts to any bank account in either country.
We have taken a step further when it comes to our customers, we embedded ourselves in their journey. This has helped us better respond to their needs and wants. We also knew that digital transformation was an important component of the customer’s journey and decided that investing in it will make their lives easier. The number of customers using our digital banking rose by more than 90 per cent, our mobile and online banking solutions now account for more than 60 per cent of all customer transactions. We also launched wearable banking, cards marketplace, and a Twitter enquiry services. The mobile app became the center of our efforts in the digital banking; we are planning to utilize the app further to provide customers with value-added services to enhance their experiences. The latter includes ensuring complete digitalisation, establishing a solid data infrastructure and integrating the usage of AI technology. We listened to our customers and used their feedback to build a system that fit their lifestyle.
The Bank was the first in Oman to have successfully completed the international remittances pilot project using block-chain technology. Furthermore, our efforts in the digital sector was recognized when we received the Asian Banker Technology Innovation Award for our customer relationship management.
At the center of the most forward-thinking, dynamic and successful workplaces is people. We are transforming our organization to nurture a high performance team who are empowered and are equipped with the right skillsets. We invested heavily in upping their skills, in running talent development programs and in building a headquarters that will act as an incubation hub for talent generation and a place where they can solve our customers’ problem. Our customers and employees make up the very fabric of the community we operate in. We have worked hard to build relationships with public and private entities to support the Sultanate’s long-term economic diversification agenda. We have done so through supporting numerous initiatives, events, and sponsorships such as the NBO Golf Classic Championship, Ahmad Al Harthy and most recently the NBO Golf Open. Through these joined efforts, we have promoted the Sultanate to a global audience and put Oman on the world sporting map. We were also the first to host the Sultanate’s biggest hackathon where over 300 students, startups and entrepreneurs competed against each other to produce the next big tech driven idea that will shape the future of banking.
One major milestone is the new headquarters office in Azaiba which is considered a construction marvel. The building incorporates the Omani culture and spirit in its design as it was built with special limestone blocks that are popular in Oman. It is equipped with the latest technologies to accommodate the market need for an advanced, healthy, beautiful, and efficient working environment which will reflect on our employees’ performance and the quality of service provided by NBO.
The Bank was also acknowledged by receiving several accolades. These included being recognized by Citibank for US dollar (USD) fund transfer services and Barclays Bank for Great British Pound remittance services.
How was your retail and corporate lending during the year?
The bank took several measures including re-pricing existing loans and increasing on-boarding yields for corporate customers. As a result, the Bank’s interest margins are the best in the industry. We maintained strict vigil over asset quality and de-risking our overall portfolio, this included the integration of a monitoring and early warning system for key sectors.
We have set bold aspirations to build new sustainable revenue lines and achieve solid and sustainable growth. Achieving these targets, requires continuing our fundamental shift in our business model away from traditional loan income to a sustainable fee generating business across retails, corporate and investment banking. Our future banking business model is centered on being a lifestyle partner to our clients and providing innovative solutions that will make NBO ‘future ready’
What about the measures taken to support SMEs?
We were the first bank to set-up an independent department to cater to their requirements in early 2012 and become the partner of choice to over 17,000 of Oman’s promising entrepreneurs, providing them with both financial support and guidance. We helped several entrepreneurs develop from micro to medium and large sized enterprises, unlocking their potential through the conducting mentorship seminars and providing them with the Tijarati Banking solution, an exclusive SME only product that is carefully tailored and relationship-driven to give young business leaders the means to pursue their dreams. NBO also established its very own ‘Innovation in SME’ Award, offering RO 10,000 to the next great business idea. In early 2018, our efforts in supporting SMEs was recognized as we received the “Best Financial Support” award at the third edition of the Riyada Entrepreneurship Awards.
How was the performance of the bank’s Islamic banking window during the year?
NBO allocated RO13.50mn of capital towards the Islamic banking window: Muzn Islamic Banking. Muzn Islamic Banking enhanced their product and service offerings by launching the new private banking division (Privileged Banking) which provides a variety of customized services and Islamic banking products. With dedicated relationship managers, an exclusive access to over 500 airport lounges, and more than 900 offers provided by various retailers globally, Muzn Islamic Banking was able to win the IFN award for the “Best Islamic Bank” in the Sultanate in 2017.
What were the major HR and Omanisation initiatives taken by the Bank?
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 a technologically advanced.
Critical to our success is the need to foster a high performance and a value-based culture and we demonstrated our commitment by creating an environment in which our employees feel motivated and engaged to reach their full potential. To support this objective, we introduced internal talent management programs which would not only attract talent to the Bank, but also retain them. We heavily invested in providing our employees with skillsets and knowledge to feel empowered. We were also the first Bank launch ‘Ibtikar’ in 2014, a platform to engage employees to create prototype mobile apps that address business owners problems and test these innovative approaches with customers before they are rolled out nationally. Thus, our staff engagement survey results showed a significant increase in engagement levels across the bank. We were successful in being a desirable working environment which is reflected in our current Omanisation ratio at 92.55 per cent.
Please share your views on your outlook for 2018?
I am optimistic for the year 2018 and we are prepared. We set our five-year growth strategy in place in 2014 which I was part of. We put together a forward looking plan that centered on delivering a superior customer experience with the objective of becoming the ‘Bank of Choice’ for all our stakeholders. To date, we made good progress on our strategic agenda, and will continue to build on our strong foundation to deliver innovative products and services that meet and exceed our target customers’ banking needs. NBO core business will remain stable, with increased interest rates, active risk management, unlocking cost efficiency through our investments in the digital sector, as well as building a new diversified fee generating solutions across all of our business lines.
Our retail banking is growing strong and will even be stronger in 2018. NBO’s Sadara Wealth Management Team are providing sound advice and producing strong yields for customers through tailor made investment opportunities, insurance products and brokerage services and we will see more in the coming year. Our 20 years old Al Kanz Scheme, will have the largest number of winners; from 373 customers in 2017 to over 15,000 in 2018, with a total of RO3,251,000 prize money. We are helping customers realize the importance of saving by utilising the right incentives.
We have worked extensively to achieve our vision; to become the ‘Bank of Choice’. We anticipate hurdles ahead but I am confident that we can overcome them. We have a strong leadership team in place anchored by employees who are driven, robust systems and procedures, loyal customers and strong values. At NBO, our core competency and our drive is attributed to the strength of our brand, our well-funded and diversified balance sheet, our polished track record of innovation and most importantly our customer-centric business model. Our clients are at the center of all our activities and we promise to provide them with the best financial solutions.