BankMuscat reclaims the No. 1 position on the survey this year, that too in style. It is ahead of Bank Dhofar, the runner up, by 34 points. Its dominance on individual parameters is absolute �it is the best bank on EPS, return on capital, efficiency (NPLs to gross loans), growth in loans, deposit growth, net profit growth and total assets. Says Abdulrazak Ali Issa, chief executive, BankMuscat, “The factors that directly cont-ributed to our performance last year include the bank’s ability to achieve significant asset growth across all key business segments, its success in mobilising low cost funds, increased fee income and all round operational efficiencies.�br>
A major contributor to the bank’s operational efficiencies was a management restructuring process in late 2005. The bank brought about a number of changes in the senior management as per the recommendations made by global consultancy firm, Booz Allen Hamilton. “The restructuring process has helped the bank focus greater synergies on key and emerging customer segments in Oman and across the region. It has also helped in ensuring that the right people are heading the right business lines,�says Issa.
The bank is confident about its prospects. In terms of specifics, it plans to emphasise on fee-based and commission based value added services. It also seems to be well prepared for enhanced competition. “BankMuscat has been preparing for this for over a decade. We are also in the process of taking competition to foreign shores with the increasing internationalisation of BankMuscat.�
Logo story
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The bank’s logo portrays pride in its Omani roots. Three khanjars are arranged to represent the synergy between the customer, bank and its services. The logo was designed by Dominic Healey, creative director, Apex Press and Publishing.
Snapshot
Total assets
RO2,954.85mn
Non-performing loans
RO93.45
Number of branches
99
Number of Employees
1,945
Number of ATMs
228
Net Profit
RO60.43 mn
Profitability per employee
RO31,070
Omanisation
92.2 per cent
The man at the helm
With over 35 years of banking experience, Abdulrazak Ali Issa was appointed chief executive of BankMuscat in 1994. A firm believer in the importance of human capital, his management style is participative in nature. “It is empowerment that helps you build a strong mana-gement team.�His people-centric approach has helped BankMuscat win a number of accolades like the People Development Award at the Oman Awards for Excellence three times running and as an Investor in People by LiP, UK.
A year of reckoning
Ahmed Ali al Shanfari, chief executive officer, Bank Dhofar walks around his office with a spring in his step and it is not difficult to see why. The bank has had a rollicking 2006 �profits are up by over 40 per cent and its return on equity and net profit per employee is the best amongst all banks. Its gross loan balance sheet is the third largest in the sultanate. Says Shanfari, “The biggest challenge for us this year is to maintain our current growth rate in a market that is becoming more competitive.�With a ten per cent growth in Q1 2007, the bank seems to be in a good position to continue so.
The significance of FY2006 goes beyond numbers. It was a year of introspection and rethinking �a year when the bank finally acknowledged certain home truths and chalked out a strategy in line with the changing dynamics of the market. The bank is keen to scale up. “We will grow our savings account like BankMuscat, NBO and OIB as it will help reduce our cost of funds.�The bank plans to raise US$100mn from the market this year and has sounded CBO about this.
It hired Booz Allen Hamilton to redesign its organisational matrix. The bank has since seen an influx of talent and overcome the reputation of being a conservative paymaster. Mudit Saxena joined the bank as head of consumer banking, Sami Zadjali, marketing manager, OIB, came on board in a similar capacity. Shanfari strikes an upbeat note. “In a small market there will always be challenges, but we can now compete with the biggest.�br>
Logo story
Bank Dhofar designed a new logo after its merger with Majan Bank in March 2003. The brief was to keep it simple and direct. The logo uses its name in English and in Arabic.
Snapshot
Total assets
RO694.79mn
Non-performing loans
RO41.62mn
Number of Branches
48
Number of Employees
636
Number of ATMs
86
Net profit
RO20.13mn
Profitability per Employee
RO31,650
Omanisation
91.8 per cent
The man at the helm
Ahmed Ali al Shanfari joined Bank Dhofar in October 1994. Since November 1995, he has been the man in charge of the bank, first as the general manager and then as the chief executive. “I am reasonably deman-ding and take quick decisions. I set proper targets for my team and monitor their performance against those. I try to be fair to my people though there are times when others may not see things from a CEO’s perspective.�
Promising returns
"It is important to recognise that NBO is still a bank in transition," says Andrew Duff, the CEO. Coming from the man at the helm of a bank that made a net profit of RO30.4mn in 2006, the word transition sounds like understatement. During 2000-04 the bank went through a rough patch, when its investment in processes, technology and HR came to a standstill. These processes started again only in 2005. In 2006, the bank focused on its core strengths. "We have a fantastic brand; our customers did not desert us even during our bad years which shows that they think about us very highly."
The bank is working on a number of strategies at the same time. It is implementing 130 projects to bring about improvements and has trained its sights on long-term growth that is insulated from economic cycles. This entails diversifying its revenue streams so that it is not dependent on interest income alone. The aim is to have fee-based income to be 40 per cent of the bank’s net interest margins.
The bank will expand its product portfolio by introducing investment banking, transaction banking and a new cash management system for corporates. "The full impact of these will be felt only in 2008," says Duff. The bank also plans to expand its branch network and ATMs. NBO will install at least 30 ATMs in 2007. The bank will soon open a branch in Dubai, targeting the top 50 companies. NBO is also keen to refresh its brand identity, which may involve going in for a new logo and refurbishising its branches, among other things.
Logo story
NBO's logo was designed in 1997 by Asha Advertising. It comprises a globe which depicts growth and broadening horizons. The red background stands for dynamism and strength, while the blue on which NBO appears signifies professionalism.
Snapshot
Total assets
RO1,082mn
Non performing loans
RO 88.80mn
Number of Branches
52
Number of Employees
1,065
Number of ATMs
83
Net Profit
RO 30.42mn
Profitability Per employee
RO 28,570
Omanisation
93 per cent
The man at
the helm
Starting off as a lawyer, Andrew Duff moved into banking by accident. He says his mana-gerial style has changed drastically over the years. "I started off as a person who thought he knew everything, told people what to do, even bullying them at times and got things done." Having realised that this approach does not work, Duff has become a person who firmly believes in empowering his teammates. "The only thing that I insist on is that power comes with responsibility. I am tolerant and encourage people to make mistakes because if they are too frightened they will shy away from taking initiative."
Getting tech savvy
Oman Arab Bank (OAB), the No 1 bank in 2005 slips to No 4 position in 2006. The bank’s operating efficiency (operating expenses to operating income) which was the best amongst all banks in 2005 has a taken a nosedive with competing banks faring much better. OAB’s return on assets and deposit growth too has been slow compared to others.
While the numbers may have their own story to tell, it will be erroneous to assume that the bank made little headway in 2006. On the contrary, OAB did have quite a few remarkable achievements to its credit in 2006. It has been working overtime on upgrading its IT prowess and has put in place an efficient e-banking service. “We are concentrating on developing our technology,�says Abdul Kader Askalan, CEO.
OAB introduced a B2B (business-to-business) system offering instant bill collection
services to telecom service providers like Omantel, Oman Mobile and Nawras. It has
also installed a B2G (business-to-government)
system which helps ministries and government establishments collect their dues. SMS banking service enables customers to avail banking services including the payment of utility bills electronically. Says Askalan, “We are upgrading our ATMs so that they can accept utility bills.�CBO named OAB as the best bank for usage of the electronic payment system (RTGS/ACH) implemented in 2006.
Initiatives on the retail side include a home loan product, Al Dar. The bank also opened two branches at Al Khabourah and KOM, in Muscat.
Logo story

OAB’s logo is a replication of the Arab Bank’s logo which was designed in 1930. The logo has a map of the sultanate along with a camel and a horse. The camel symbolises patience while the horse stands for loyalty and faithfulness.
Snapshot
Total assets
RO540.39mn
Non-performing loans
RO17.13mn
Number of Branches
39
Number of Employees
635
Number of ATMs
64
Net profit
RO15.11mn
Profitability per Employee
RO23,800
Omanisation
93.11 per cent
The man at
the helm
Abdul Kader Askalan started his career with Arab Bank in 1957. He came to Oman as an officer with Arab Bank in 1973. In 1984 when Arab Bank converted to OAB, he took over as its CEO. “I want my staff to deal with customers politely. Customers should not be angry or upset. Our responsibilitty as a bank is to give customers the correct advice and not just make money.�br>
Time for a rethink
Oman International Bank (OIB) falls three places since 2005 to land at the bottom of the chart. The bank has lost ground on a number of parameters like earnings per share, return on capital, NPLs to gross loans, growth in loans and growth in deposits. Yet, the bank’s efficiency (operating expenses by operating income) is the best amongst all banks. Its interest spreads are good and return on equity is still amongst the top three. So there are a few silver linings that the bank can derive comfort from.
Mohamed Badra, who took over the reins as its general manager nine months ago, is working on a two-pronged strategy �building upon the bank’s strengths like its branch network and bringing in changes wherever needed. The bank has restructured Mandoos �its prize winning scheme. “We changed the mechanism of Mandoos so that it includes all our branches and a larger number of customers,�says Badra.
Project finance has been identified as a thrust area. It wants to be a part of infrastructure
projects being initiated by the government and tourism related initiatives. “Tourism is important for the economy, it also works as a feeder to 76 other industries,�says Badra. OIB is providing financing to a number of power projects in the sultanate.
The bank is clear that it will not compromise on its asset quality for quick growth. “We have never had a big default for the last 20 years and would like to maintain that record. If a bank’s asset quality is not good, it is bound to incur heavy loses after a few years.�
Logo story
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Oman International Bank uses red and green, the colours of Oman’s flag in its logo. The effort is to keep it simple with the logo depicting the initials of the bank. The bank’s motto is to be a ‘friend and partner�to its customers.
Snapshot
Total assets
RO919.50mn
Non-performing loans
RO75.10mn
Number of Branches
82
Number of Employees
913
Number of ATMs
104
Net profit
RO26.19mn
Profitability per Employee
RO28,690
Omanisation
93.3 per cent
The man at the helm
Mohamed Badra, general manager, OIB is a career banker with over 30 years of experience. A democratic and open manager, he says, “I try to understand a problem by consultation and then take corrective action. There are two approaches to decision making �top down or bottom up. The latter method is better as it gives everyone involved a sense of ownership. If one takes a top down approach that feeling of ownership is not there.�
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