16 April 2012
MUSCAT -- In a short span of five years, Bank Sohar has emerged as one of the leading banking institutions in the Omani market setting benchmarks in the banking sector. Dr Mohammed Abdulaziz Kalmoor, CEO of Bank Sohar, provides insights into the success story.
Bank Sohar has done extremely well during the past five years of its operations in the Sultanate. It was keen to make a mark since inception. And today, the bank is proud of its achievements mainly due to its vision and strategy.
As the bank looks back, it was neither easy to come this far nor was it due to sheer luck. Prior to starting the banking operations, members of the Founding Committee had very carefully studied the fate of all the nascent banks in the country at the last 20 years and they found that the banks could not survive for long and were eaten up by the big players.
Bank Sohar, right from its inception was keen to chalk out the right strategy and ensure that it was executed properly. To make it effective, it needed the right people, state-of-the-art technology and the appropriate culture. Within this culture what was required was alertness and being constantly vigilant to the outside world and to take appropriate actions thereof.
Therefore, in Phase 1, one of the decisions taken was to attain a minimum critical mass; ie, Bank Sohar must acquire a given market share within a short period of time. This was necessary for the bank to be considered by its stakeholders that it is strong enough to survive.
At the same time, the bank looked into the needs of the market and came up with the products and services to meet them. The BBB+ rating by renowned global rating agency Fitch in 2010 highlighting Bank Sohar's rising market share was a creditable achievement for Bank Sohar. In three years, it brought the bank on a par with other leading players in the country that were in Oman for 20 years.
Phase-3 begins
The year 2011 was an extraordinary year for Bank Sohar in terms of performance, because it posted a hefty net profit growth of nearly 42 per cent. This was on the back of continuous growth in profits in the previous two years.
To summarise, these first two years -- phase one of bank strategy, was to gain market share. Phase 2, which began with third year, was to gain profit share. Phase 2 was characterised by breaking down the business ideas and operations of the bank in its various building blocks, and thereby endeavouring to optimise each one of them.
In particular the bank concentrated on building quality assets, with greater focus on corporate financing. Bank Sohar kept a very keen eye on its asset quality and ensured that the delinquencies are curtailed as much as possible.
It worked on the cost of funds and tried to get the best rates on the sources of these funds. The bank also tried to maintain attractive yields, in addition to managing its cash in the most optimum manner.
Bank Sohar takes keen interest in HR development. Throughout its five years, it took utmost care in handling the human elements involved with belief that satisfied internal customers will deliver the best services to the external customers.
Bank Sohar has established a state-of-the-art training centre for in-house training and also sends people overseas for additional training needs. An important ongoing initiative is the high-level training being given to its senior management team. As a part of it, nearly 8 per cent of Bank Sohar Omani staff are getting trained on advanced management techniques as well as leadership principles for up to five days every month.
Many other initiatives have been taken to strengthen the bonds among employees and create a better working atmosphere such as annual Bank Sohar family gatherings. In addition, it has instituted the star performer awards to recognise, appreciate and extend incentives to employees.
In retail lending, the bank has accorded more importance to quality rather than quantity. Bank Sohar has re-examined its retail policy and the entire activities associated with it. The bank looks at it from the perspective of its customers, considering their ability to repay the loan, taking into account their education, age, work place and other important elements.
The bank aims to consider customers' constraints when it comes to repayment of loans. Bank Sohar understands that not everybody is alike when it comes to the ability to repay. The bank does not want to make it a burden on them, because it considers the customers' problems are its problems too.
It's against this backdrop that Bank Sohar reduced the interest rates on personal loans and now offers one of the lowest interest rates for housing loans across all segments. This initiative has been taken to compete more in terms of pricing in order to give customers rather than simply take from them.
Bank Sohar has been very active across all segments in corporate financing. This is one of its strong areas as it aims to contribute to the development of the country by supporting education, infrastructure, manufacturing, hospitality and many other sectors.
Bank Sohar currently has 25 branches and 44 ATMs (on site and off site). The bank plans on setting up 5 more branches and 15 ATMs this year to improve its reach and facilitate customers' access to banks touch points. Bank Sohar customers continue to enjoy the privilege of free-of-charge access to over 650 ATMs under the "Oman Net" platform.
Islamic banking window
A number of steps have been taken in Islamic banking. The bank has appointed a Dubai-based sharia consultant for this initiative and will start with an RO 10m capital which will be raised through rights issue. Bank Sohar has also identified the person who will be heading this operation.
The emergence of Islamic banking, which will see arrival of two new banks with larger capital and the existing players opening windows with fresh capitals, will herald a new era of intensive competition in the banking industry. This will mark a transition and transformational period for Bank Sohar as well as the competitor banks.
Bank Sohar 2012 Outlook:
Currently, Bank Sohar is moving to phase 3 and 4 of its strategies. In phase 3, the bank is looking forward to accomplishing its vision of becoming a one-stop shop for all its customers by introducing additional business lines by reinventing existing services and using advanced technologies and introducing automated services to increase efficiency and convenience.
Phase 4 will witness the introduction of strategies to serve the ecosystem rather than being served by it. It is poised to transform the banking industry in the country significantly by ushering in a paradigm shift.
Employees are assets
HR continued to play a pivotal role in the bank's performance. The main focus in 2011 was on enhancing performance and productivity and on providing employment and career opportunities to current and potential staff. Bank Sohar's constant efforts in developing, motivating and engaging its team have paid off by addressing the organisational objectives in the challenging business environment. From the start, the bank's approach has been to embrace international best practices customised to its needs for the long-term benefit of the bank.
Meanwhile, the development of skills and competencies continued in 2011 with 3,281 participants attending 370 training and development programmes during the year.
In a major accomplishment in just five short years, the bank reached the milestone of achieving the 90 per cent Omanisation target set for the banking industry thus keeping its word to its shareholders, Central Bank of Oman and the Omani Society.
The challenge in 2011 was to enhance Omanisation at the senior level as well as in the core business and in specialised functions such as Corporate Banking, IT, Audit, Risk Management, Product Development and Training which was achieved with much efforts and with support of respective functions.
The bank believes that external customer satisfaction depends on internal employee satisfaction.
Therefore, the Human Resource Department conducted an employee opinion survey to assess and understand the level of engagement employees have within Bank Sohar. Action plans were then prepared to address the identified needs for enhancement of employee engagement.
A "STAR" programme (Staff Appreciation and Recognition programme) has been initiated to appreciate and recognise efforts made by staff to achieve organisational goals and objectives as well as participate in community service. In addition to this, Team Briefing (an organisational communication process) was introduced to communicate organisational goals set by the CEO and Executive Management across the bank and to receive feedback from staff.
Increasing number of staff and supervisors in the bank were engaged in the past year in constructive discussions on ways to enhance performance and improve results.
To further improve external customer satisfaction and enhance internal processes and the way the bank's various departments serve each other, an "External Customer Service Index" and an "Internal Customer Service Index" were made and aligned to the goals and objectives set for all the employees of the bank through the Performance Management System. The findings of these surveys are being used to enhance our internal and external customer satisfaction processes.
As a long-term strategy to address the future needs of the bank in order to develop future leaders and hone their skills, the bank introduced a Talent Management and Leadership Development Programme. Approximately 10 per cent of the workforce went through a structured competence assessment process (through the development centre) to identify the developmental needs. Based on the finding, a 12-month, 7-module Leadership Excellence Programme has been developed and is being attended by 44 of the senior management.
Meanwhile, the initiative to enhance the productivity of people and processes was partnered with CEDAR consultants. Based on the analysis of organisation chart, workflow, and volumes handled, comparisons were made to local/regional benchmarks. The final recommendations are being implemented in stages to ensure minimum interruption to the business.
Retail Banking
As we celebrate our 5 years of proud existence, we promise to stand committed towards 'Relentless Excellence' and serve every member of Bank Sohar family beyond expectations. Over the period, the Retail Banking Division has come a long way with a vision to excel in every aspect of customer care and service by offering a wide spectrum of products and services across various segments. Our values being integrity, customer focus, team work, respect, passion and speed since inception have yielded significant benefits in a short term.
The Retail Division commenced its operations with a huge determination to enhance business and exploit the market potential to the maximum. Despite the market credit crunch during the global crisis, the bank successfully employed deliberate caution to prevent bad loans.
From only 5 branches in the initial year, the bank now owns a network of 25 branches in prime locations of the Sultanate. Offering much convenience to her customers, Bank Sohar boasts of total 44 (on-and off-site) ATM machines across the country. In addition, our customers continue to enjoy the privilege of free-of-charge access to over 650 ATMs under the "Oman Net" platform.
The ATMs at Buraimi and Wajajah borders being activated with the "Dirhams Dispensing" facility keep on adding to customer convenience in galore. Apart from being most beneficial to businessmen who travel and transact business across the border on a regular basis, this advantage is availed by numerous customers who visit the United Arab Emirates. The Cash Deposit facility at all branch ATMs has also become a cakewalk for the cash dealings of our customers with the machines performing a dual function of dispensing as well as withdrawals.
At the close of 2011, Savings Deposits registered an increase of 36 per cent (RO 158.8 million at 2011 year-end against RO 116.64 million at 2010 year-end) which was a remarkable growth considering severe competition in the market.
We take pride in our expanded network, customer service and the customised attractive Savings Scheme that have yielded the desired results in the savings portfolio. Deposits of retail customers have increased from RO 155 million at the close of 2010 to RO 190 million at the close of 2011, an increase of 22.58 per cent.
Bank Sohar's 'Time to Win' Al Mumayaz savings scheme continues to be the best and preferred investment among our customers since it comprises of a daily prize draw of RO 5,000. This offer is cascaded with the quarterly bonanzas in March, June and September. Besides the daily prizes of RO 5,000 in year 2011, the March jackpot of RO 150,000 went to a single winner, there were two winners for the June jackpot prizes -- RO 150,000 to one, plus an exclusive prize of RO 100,000 to the second.
The September prize consisted of 30 winners winning RO 5,000 each with a guaranteed winner from each branch. The mega prize draw of RO 600,000 was held in December which again had two lucky winners -- RO 450,000 to one and an exclusive prize of RO 150,000 to the second.
This scheme was extremely well received by customers prompting us to continue it with extended benefits during the year 2012.
Over the past years, the bank continued to launch various promotions hosting several benefits, the recent being "You Spend We Pay" that covered the Classic, Gold and Platinum Credit Cards as well as Internet Cards. There were total 15 lucky winners during this promotion period for 3 months with five winners winning RO 1,000 each.
Exclusive holiday packages were also unveiled for Excel Credit and Debit Card holders with a focus on "More Savings and More Fun". The bank's offer of attractive discount on holiday packages included air travel to an enormous choice of destinations. Yet another recent summer promotion conducted jointly by Bank Sohar and Muscat Duty Free was offered to Debit and Credit Card holders for a period of two months.
The promotion was raffle-based and was linked to the amount that passengers spent at the Duty Free outlets. The winner of the Summer Promotional Campaign received a power packed Bank Sohar Excel Diamond Card of $25,000.
With the consistent efforts in executing the strategies, the credit card customer base has seen an impressive growth of 40 per cent during the year.
Bank Sohar is the third bank in the Sultanate to join the world's leader in global payment services and branches -- Western Union global network, since 2011. With this arrangement, Bank Sohar now offers all inbound, outbound and domestic transfer services, as well as the Western Union QuickPay and QuickCash services at most of its branches.
Besides business, the bank continues to host its exclusive social gatherings for its customers in different regions of the country. Such gatherings are highly valued as an opportunity to informally meet up and build an unique bond with our customers.
Since the start of operations, Bank Sohar has consistently excelled in team building culture and is believed to be the core of our success. The management has regularly brought the branch managers together to discuss, share, consult, brain storm as well as reward the deserving performance. The entire team pledges to strive ahead and continue to excel in its journey.
Wholesale Banking
Wholesale Banking remained a key contributor to the overall stupendous performance of the bank since inception. The division witnessed consistent growth all along in terms of assets, fee income and mobilisation of deposits from a diverse corporate clientele base across the Sultanate of Oman and from prominent clients in GCC locations.
The specific achievements of the six divisions under the ambit of Wholesale Banking are as follows:
1) Large Corporate Banking (LCB):
LCB caters to the complete banking requirements of large corporates with healthy turnovers who are situated in the Sultanate of Oman. The department continues to build on these relations and strives to provide quality products and services in addition to Corporate Banking products that aim to delight such corporate clients' requirements in respect of Trade Finance, Retail Products, Corporate Credit cards and Forex lines.
The various divisions within the Large Corporate Banking Unit has talented sector-specific Senior Relationship Managers to cater to the specific banking requirements of key players in Oil and Gas, Non-Banking Financial Services, Project Finance, Mining and Quarrying, Real Estate and Construction, and Manufacturing sectors.
Large corporates concluded a number of major syndication deals with the support of local, as well as leading GCC banks, to address the requirements of large projects in the Sultanate.
2) Emerging Corporate Banking (ECB):
The business focus of this unit is to address the banking requirements of SMEs, Omani entrepreneurs and the businesses of other Omani individuals. This unit is aptly located near the industrial area in Muscat affording easy accessibility to the client and enabling senior-level interaction by the Relationship Managers at the clients' locations.
ECB is growing steadily in terms of business. In an effort to enhance coverage and visibility, ECB also interacts with other local bodies and Government organisations dedicated to promoting SME and Omani entrepreneurial potential. This unit sponsored seminars designed to help Omani Women Entrepreneurs and SME initiatives of the local bodies to acquire the necessary skills to run SME units which is a reflection to the importance given to the clientele of this particular unit.
This unit also caters to the product requirements of SME clients in terms of trade and foreign exchange. To the unit's distinctive advantage, the bank has employed talented local Relationship Managers, who are in a position to feel the pulse of the client's requirements and thereby extend tailor-made solutions in the quickest possible time. The ECB Unit has tapped large corporate clients in the Wholesale Banking Division in sourcing opportunities and in extending banking facilities to sub-contractors.
3) Government Institutions & Public Sector Unit:
Among the local banks, only a few like ours have a dedicated team to address the requirements of prestigious Government and Quasi Government Entities. In fact, the large majority of local Public Sector Units engaged in commercial operations, as well as all the key Government departments, currently avail themselves of a range of facilities offered by this unit.
Our bank has been successful in addressing the large requirements of nationally important Public Sector Units in helping them to meet their expansion objectives by making available long-term loans through strategic tie-ups with other Omani banks.
Services such as remittances, trade and other retail products continue to be greatly sought after by the clients of this segment to the mutual benefit of both; customers and the bank.
4) Financial Institutional Group (FIG):
The main focus of this group is to network our bank globally through extensive correspondent banks. This is to facilitate the free flow of trade transactions across the border to help Omani corporates facilitate their business and access superior facilities across the globe thereby enhance their trade volumes.
FIG also studies "Country and Bank" risks across the world and sets prudential exposure levels in tune with our risk appetite for such exposures. FIG successfully identified a number of emerging growth markets with the potential to provide new business opportunities for the bank and thus enhance return on placement of surplus funds. We are proud to have hosted a meeting with a visiting delegation from the Central Bank and five top banks of a prominent emerging country with leading local banks of Oman, with the aim of advancing mutual banking interests and to further the partnership business model with them.
The partnership with fundamentally strong banks will not only benefit the banking community here but also enable us to address the growing funding requirements linked to the implementation of important projects within the Sultanate.
FIG also plays a significant role in being the main co-ordinator for the bank's rating appraisal by Fitch. The rating agency once again reaffirmed the superior rating assigned to the bank last year as well, based on the sustainable growth business model of the bank.
This enabled the bank to secure substantial committed lines from reputed global banks at competitive terms. FIG played a vital role in mobilising 7-year subordinate loan for the bank at well below the then prevailing market interest rates.
5) Trade Finance (TF):
This is one of the key product units within Wholesale Banking handled by a team of skilled Omani staff, who cater to the trade finance requirements of the Retail and Wholesale segment of the bank.
Over the past two years, the non-funded business volume has grown exponentially, demonstrating the bank's strong ability in handling such volumes from our corporate clients and from banks worldwide.
The Trade Finance Department also participated in various events hosted by the Public Authority for Investment Promotion and Export Development (PAIPED), Export Credit Guarantee Agency (ECGA) and Oman Chamber of Commerce and Industry (OCCI) to enhance the visibility of, as well as disseminate the bank's technical knowledge to the business community across the Sultanate.
TF Unit continuously organised seminars in prominent locations across the Sultanate for the benefit of all the leading corporates situated there. These events were well attended and appreciated by the local corporates.
Similarly, the bank organised corporate-specific training sessions for Government, Public Sector and Large Corporates at their business locations. These sessions helped throw light on a variety of technical issues and also provide valuable information on global requirements in cross-border trade.
Trade Finance has successfully conducted in-house workshops on UCP 600 for its corporate clients.
Further, on public demand, the bank's Trade Finance team of experts plans to organise much larger events during 2012, focusing on UCP, Incoterms, Demand Guarantees and ISPB.
One of the forthcoming event the Trade Finance Unit is planning to conduct a Conference/Seminar jointly with one of the largest banks whose core business is Trade Finance to address latest development in the world's economy and changes happening around the Uniform Rules (UCP) and how our correspondent bank will support both importer and exporter in terms of risk mitigation and explore new and emerging markets.
6) Treasury:
Treasury's key focus is to ensure the profitable management of the residual funds, oversee regulatory ratio management, and provide advisory services to top corporate clients on structured products and derivatives.
This division caters to the requirement of remittances of retail and corporate clients across the bank.
They also liaise with important Government Units in tapping surplus funds for the bank's requirements.
During past years, Treasury has concentrated on product upgrade, besides enhanced subscriptions to globally reputable Foreign Exchange service providers that enabled the bank to structure innovative solutions in line with the requirements of key clientele.
The Treasury division functions as the nerve centre of the bank and contributes significantly to the bank's operations with a special emphasis on the management of regulatory ratios, liquidity and profitability, besides addressing various risks associated with money, FX and interest rate markets.
Overall, Wholesale Banking has achieved the desired levels of synergy from the combined operations of all the six units within, as well as from the retail division of the bank, in extending superior services to corporate clients. In doing so, it clearly demonstrated its ability to enrich the relationship through enhanced product sales to diverse top-end clients in this market.
In short, the wholesale banking business model demonstrated our mission statement of the bank as a "One-stop financial super-mall offering boutique products and services across various segments, each with a unique set of propositions".
MUSCAT -- In a short span of five years, Bank Sohar has emerged as one of the leading banking institutions in the Omani market setting benchmarks in the banking sector. Dr Mohammed Abdulaziz Kalmoor, CEO of Bank Sohar, provides insights into the success story.
Bank Sohar has done extremely well during the past five years of its operations in the Sultanate. It was keen to make a mark since inception. And today, the bank is proud of its achievements mainly due to its vision and strategy.
As the bank looks back, it was neither easy to come this far nor was it due to sheer luck. Prior to starting the banking operations, members of the Founding Committee had very carefully studied the fate of all the nascent banks in the country at the last 20 years and they found that the banks could not survive for long and were eaten up by the big players.
Bank Sohar, right from its inception was keen to chalk out the right strategy and ensure that it was executed properly. To make it effective, it needed the right people, state-of-the-art technology and the appropriate culture. Within this culture what was required was alertness and being constantly vigilant to the outside world and to take appropriate actions thereof.
Therefore, in Phase 1, one of the decisions taken was to attain a minimum critical mass; ie, Bank Sohar must acquire a given market share within a short period of time. This was necessary for the bank to be considered by its stakeholders that it is strong enough to survive.
At the same time, the bank looked into the needs of the market and came up with the products and services to meet them. The BBB+ rating by renowned global rating agency Fitch in 2010 highlighting Bank Sohar's rising market share was a creditable achievement for Bank Sohar. In three years, it brought the bank on a par with other leading players in the country that were in Oman for 20 years.
Phase-3 begins
The year 2011 was an extraordinary year for Bank Sohar in terms of performance, because it posted a hefty net profit growth of nearly 42 per cent. This was on the back of continuous growth in profits in the previous two years.
To summarise, these first two years -- phase one of bank strategy, was to gain market share. Phase 2, which began with third year, was to gain profit share. Phase 2 was characterised by breaking down the business ideas and operations of the bank in its various building blocks, and thereby endeavouring to optimise each one of them.
In particular the bank concentrated on building quality assets, with greater focus on corporate financing. Bank Sohar kept a very keen eye on its asset quality and ensured that the delinquencies are curtailed as much as possible.
It worked on the cost of funds and tried to get the best rates on the sources of these funds. The bank also tried to maintain attractive yields, in addition to managing its cash in the most optimum manner.
Bank Sohar takes keen interest in HR development. Throughout its five years, it took utmost care in handling the human elements involved with belief that satisfied internal customers will deliver the best services to the external customers.
Bank Sohar has established a state-of-the-art training centre for in-house training and also sends people overseas for additional training needs. An important ongoing initiative is the high-level training being given to its senior management team. As a part of it, nearly 8 per cent of Bank Sohar Omani staff are getting trained on advanced management techniques as well as leadership principles for up to five days every month.
Many other initiatives have been taken to strengthen the bonds among employees and create a better working atmosphere such as annual Bank Sohar family gatherings. In addition, it has instituted the star performer awards to recognise, appreciate and extend incentives to employees.
In retail lending, the bank has accorded more importance to quality rather than quantity. Bank Sohar has re-examined its retail policy and the entire activities associated with it. The bank looks at it from the perspective of its customers, considering their ability to repay the loan, taking into account their education, age, work place and other important elements.
The bank aims to consider customers' constraints when it comes to repayment of loans. Bank Sohar understands that not everybody is alike when it comes to the ability to repay. The bank does not want to make it a burden on them, because it considers the customers' problems are its problems too.
It's against this backdrop that Bank Sohar reduced the interest rates on personal loans and now offers one of the lowest interest rates for housing loans across all segments. This initiative has been taken to compete more in terms of pricing in order to give customers rather than simply take from them.
Bank Sohar has been very active across all segments in corporate financing. This is one of its strong areas as it aims to contribute to the development of the country by supporting education, infrastructure, manufacturing, hospitality and many other sectors.
Bank Sohar currently has 25 branches and 44 ATMs (on site and off site). The bank plans on setting up 5 more branches and 15 ATMs this year to improve its reach and facilitate customers' access to banks touch points. Bank Sohar customers continue to enjoy the privilege of free-of-charge access to over 650 ATMs under the "Oman Net" platform.
Islamic banking window
A number of steps have been taken in Islamic banking. The bank has appointed a Dubai-based sharia consultant for this initiative and will start with an RO 10m capital which will be raised through rights issue. Bank Sohar has also identified the person who will be heading this operation.
The emergence of Islamic banking, which will see arrival of two new banks with larger capital and the existing players opening windows with fresh capitals, will herald a new era of intensive competition in the banking industry. This will mark a transition and transformational period for Bank Sohar as well as the competitor banks.
Bank Sohar 2012 Outlook:
Currently, Bank Sohar is moving to phase 3 and 4 of its strategies. In phase 3, the bank is looking forward to accomplishing its vision of becoming a one-stop shop for all its customers by introducing additional business lines by reinventing existing services and using advanced technologies and introducing automated services to increase efficiency and convenience.
Phase 4 will witness the introduction of strategies to serve the ecosystem rather than being served by it. It is poised to transform the banking industry in the country significantly by ushering in a paradigm shift.
Employees are assets
HR continued to play a pivotal role in the bank's performance. The main focus in 2011 was on enhancing performance and productivity and on providing employment and career opportunities to current and potential staff. Bank Sohar's constant efforts in developing, motivating and engaging its team have paid off by addressing the organisational objectives in the challenging business environment. From the start, the bank's approach has been to embrace international best practices customised to its needs for the long-term benefit of the bank.
Meanwhile, the development of skills and competencies continued in 2011 with 3,281 participants attending 370 training and development programmes during the year.
In a major accomplishment in just five short years, the bank reached the milestone of achieving the 90 per cent Omanisation target set for the banking industry thus keeping its word to its shareholders, Central Bank of Oman and the Omani Society.
The challenge in 2011 was to enhance Omanisation at the senior level as well as in the core business and in specialised functions such as Corporate Banking, IT, Audit, Risk Management, Product Development and Training which was achieved with much efforts and with support of respective functions.
The bank believes that external customer satisfaction depends on internal employee satisfaction.
Therefore, the Human Resource Department conducted an employee opinion survey to assess and understand the level of engagement employees have within Bank Sohar. Action plans were then prepared to address the identified needs for enhancement of employee engagement.
A "STAR" programme (Staff Appreciation and Recognition programme) has been initiated to appreciate and recognise efforts made by staff to achieve organisational goals and objectives as well as participate in community service. In addition to this, Team Briefing (an organisational communication process) was introduced to communicate organisational goals set by the CEO and Executive Management across the bank and to receive feedback from staff.
Increasing number of staff and supervisors in the bank were engaged in the past year in constructive discussions on ways to enhance performance and improve results.
To further improve external customer satisfaction and enhance internal processes and the way the bank's various departments serve each other, an "External Customer Service Index" and an "Internal Customer Service Index" were made and aligned to the goals and objectives set for all the employees of the bank through the Performance Management System. The findings of these surveys are being used to enhance our internal and external customer satisfaction processes.
As a long-term strategy to address the future needs of the bank in order to develop future leaders and hone their skills, the bank introduced a Talent Management and Leadership Development Programme. Approximately 10 per cent of the workforce went through a structured competence assessment process (through the development centre) to identify the developmental needs. Based on the finding, a 12-month, 7-module Leadership Excellence Programme has been developed and is being attended by 44 of the senior management.
Meanwhile, the initiative to enhance the productivity of people and processes was partnered with CEDAR consultants. Based on the analysis of organisation chart, workflow, and volumes handled, comparisons were made to local/regional benchmarks. The final recommendations are being implemented in stages to ensure minimum interruption to the business.
Retail Banking
As we celebrate our 5 years of proud existence, we promise to stand committed towards 'Relentless Excellence' and serve every member of Bank Sohar family beyond expectations. Over the period, the Retail Banking Division has come a long way with a vision to excel in every aspect of customer care and service by offering a wide spectrum of products and services across various segments. Our values being integrity, customer focus, team work, respect, passion and speed since inception have yielded significant benefits in a short term.
The Retail Division commenced its operations with a huge determination to enhance business and exploit the market potential to the maximum. Despite the market credit crunch during the global crisis, the bank successfully employed deliberate caution to prevent bad loans.
From only 5 branches in the initial year, the bank now owns a network of 25 branches in prime locations of the Sultanate. Offering much convenience to her customers, Bank Sohar boasts of total 44 (on-and off-site) ATM machines across the country. In addition, our customers continue to enjoy the privilege of free-of-charge access to over 650 ATMs under the "Oman Net" platform.
The ATMs at Buraimi and Wajajah borders being activated with the "Dirhams Dispensing" facility keep on adding to customer convenience in galore. Apart from being most beneficial to businessmen who travel and transact business across the border on a regular basis, this advantage is availed by numerous customers who visit the United Arab Emirates. The Cash Deposit facility at all branch ATMs has also become a cakewalk for the cash dealings of our customers with the machines performing a dual function of dispensing as well as withdrawals.
At the close of 2011, Savings Deposits registered an increase of 36 per cent (RO 158.8 million at 2011 year-end against RO 116.64 million at 2010 year-end) which was a remarkable growth considering severe competition in the market.
We take pride in our expanded network, customer service and the customised attractive Savings Scheme that have yielded the desired results in the savings portfolio. Deposits of retail customers have increased from RO 155 million at the close of 2010 to RO 190 million at the close of 2011, an increase of 22.58 per cent.
Bank Sohar's 'Time to Win' Al Mumayaz savings scheme continues to be the best and preferred investment among our customers since it comprises of a daily prize draw of RO 5,000. This offer is cascaded with the quarterly bonanzas in March, June and September. Besides the daily prizes of RO 5,000 in year 2011, the March jackpot of RO 150,000 went to a single winner, there were two winners for the June jackpot prizes -- RO 150,000 to one, plus an exclusive prize of RO 100,000 to the second.
The September prize consisted of 30 winners winning RO 5,000 each with a guaranteed winner from each branch. The mega prize draw of RO 600,000 was held in December which again had two lucky winners -- RO 450,000 to one and an exclusive prize of RO 150,000 to the second.
This scheme was extremely well received by customers prompting us to continue it with extended benefits during the year 2012.
Over the past years, the bank continued to launch various promotions hosting several benefits, the recent being "You Spend We Pay" that covered the Classic, Gold and Platinum Credit Cards as well as Internet Cards. There were total 15 lucky winners during this promotion period for 3 months with five winners winning RO 1,000 each.
Exclusive holiday packages were also unveiled for Excel Credit and Debit Card holders with a focus on "More Savings and More Fun". The bank's offer of attractive discount on holiday packages included air travel to an enormous choice of destinations. Yet another recent summer promotion conducted jointly by Bank Sohar and Muscat Duty Free was offered to Debit and Credit Card holders for a period of two months.
The promotion was raffle-based and was linked to the amount that passengers spent at the Duty Free outlets. The winner of the Summer Promotional Campaign received a power packed Bank Sohar Excel Diamond Card of $25,000.
With the consistent efforts in executing the strategies, the credit card customer base has seen an impressive growth of 40 per cent during the year.
Bank Sohar is the third bank in the Sultanate to join the world's leader in global payment services and branches -- Western Union global network, since 2011. With this arrangement, Bank Sohar now offers all inbound, outbound and domestic transfer services, as well as the Western Union QuickPay and QuickCash services at most of its branches.
Besides business, the bank continues to host its exclusive social gatherings for its customers in different regions of the country. Such gatherings are highly valued as an opportunity to informally meet up and build an unique bond with our customers.
Since the start of operations, Bank Sohar has consistently excelled in team building culture and is believed to be the core of our success. The management has regularly brought the branch managers together to discuss, share, consult, brain storm as well as reward the deserving performance. The entire team pledges to strive ahead and continue to excel in its journey.
Wholesale Banking
Wholesale Banking remained a key contributor to the overall stupendous performance of the bank since inception. The division witnessed consistent growth all along in terms of assets, fee income and mobilisation of deposits from a diverse corporate clientele base across the Sultanate of Oman and from prominent clients in GCC locations.
The specific achievements of the six divisions under the ambit of Wholesale Banking are as follows:
1) Large Corporate Banking (LCB):
LCB caters to the complete banking requirements of large corporates with healthy turnovers who are situated in the Sultanate of Oman. The department continues to build on these relations and strives to provide quality products and services in addition to Corporate Banking products that aim to delight such corporate clients' requirements in respect of Trade Finance, Retail Products, Corporate Credit cards and Forex lines.
The various divisions within the Large Corporate Banking Unit has talented sector-specific Senior Relationship Managers to cater to the specific banking requirements of key players in Oil and Gas, Non-Banking Financial Services, Project Finance, Mining and Quarrying, Real Estate and Construction, and Manufacturing sectors.
Large corporates concluded a number of major syndication deals with the support of local, as well as leading GCC banks, to address the requirements of large projects in the Sultanate.
2) Emerging Corporate Banking (ECB):
The business focus of this unit is to address the banking requirements of SMEs, Omani entrepreneurs and the businesses of other Omani individuals. This unit is aptly located near the industrial area in Muscat affording easy accessibility to the client and enabling senior-level interaction by the Relationship Managers at the clients' locations.
ECB is growing steadily in terms of business. In an effort to enhance coverage and visibility, ECB also interacts with other local bodies and Government organisations dedicated to promoting SME and Omani entrepreneurial potential. This unit sponsored seminars designed to help Omani Women Entrepreneurs and SME initiatives of the local bodies to acquire the necessary skills to run SME units which is a reflection to the importance given to the clientele of this particular unit.
This unit also caters to the product requirements of SME clients in terms of trade and foreign exchange. To the unit's distinctive advantage, the bank has employed talented local Relationship Managers, who are in a position to feel the pulse of the client's requirements and thereby extend tailor-made solutions in the quickest possible time. The ECB Unit has tapped large corporate clients in the Wholesale Banking Division in sourcing opportunities and in extending banking facilities to sub-contractors.
3) Government Institutions & Public Sector Unit:
Among the local banks, only a few like ours have a dedicated team to address the requirements of prestigious Government and Quasi Government Entities. In fact, the large majority of local Public Sector Units engaged in commercial operations, as well as all the key Government departments, currently avail themselves of a range of facilities offered by this unit.
Our bank has been successful in addressing the large requirements of nationally important Public Sector Units in helping them to meet their expansion objectives by making available long-term loans through strategic tie-ups with other Omani banks.
Services such as remittances, trade and other retail products continue to be greatly sought after by the clients of this segment to the mutual benefit of both; customers and the bank.
4) Financial Institutional Group (FIG):
The main focus of this group is to network our bank globally through extensive correspondent banks. This is to facilitate the free flow of trade transactions across the border to help Omani corporates facilitate their business and access superior facilities across the globe thereby enhance their trade volumes.
FIG also studies "Country and Bank" risks across the world and sets prudential exposure levels in tune with our risk appetite for such exposures. FIG successfully identified a number of emerging growth markets with the potential to provide new business opportunities for the bank and thus enhance return on placement of surplus funds. We are proud to have hosted a meeting with a visiting delegation from the Central Bank and five top banks of a prominent emerging country with leading local banks of Oman, with the aim of advancing mutual banking interests and to further the partnership business model with them.
The partnership with fundamentally strong banks will not only benefit the banking community here but also enable us to address the growing funding requirements linked to the implementation of important projects within the Sultanate.
FIG also plays a significant role in being the main co-ordinator for the bank's rating appraisal by Fitch. The rating agency once again reaffirmed the superior rating assigned to the bank last year as well, based on the sustainable growth business model of the bank.
This enabled the bank to secure substantial committed lines from reputed global banks at competitive terms. FIG played a vital role in mobilising 7-year subordinate loan for the bank at well below the then prevailing market interest rates.
5) Trade Finance (TF):
This is one of the key product units within Wholesale Banking handled by a team of skilled Omani staff, who cater to the trade finance requirements of the Retail and Wholesale segment of the bank.
Over the past two years, the non-funded business volume has grown exponentially, demonstrating the bank's strong ability in handling such volumes from our corporate clients and from banks worldwide.
The Trade Finance Department also participated in various events hosted by the Public Authority for Investment Promotion and Export Development (PAIPED), Export Credit Guarantee Agency (ECGA) and Oman Chamber of Commerce and Industry (OCCI) to enhance the visibility of, as well as disseminate the bank's technical knowledge to the business community across the Sultanate.
TF Unit continuously organised seminars in prominent locations across the Sultanate for the benefit of all the leading corporates situated there. These events were well attended and appreciated by the local corporates.
Similarly, the bank organised corporate-specific training sessions for Government, Public Sector and Large Corporates at their business locations. These sessions helped throw light on a variety of technical issues and also provide valuable information on global requirements in cross-border trade.
Trade Finance has successfully conducted in-house workshops on UCP 600 for its corporate clients.
Further, on public demand, the bank's Trade Finance team of experts plans to organise much larger events during 2012, focusing on UCP, Incoterms, Demand Guarantees and ISPB.
One of the forthcoming event the Trade Finance Unit is planning to conduct a Conference/Seminar jointly with one of the largest banks whose core business is Trade Finance to address latest development in the world's economy and changes happening around the Uniform Rules (UCP) and how our correspondent bank will support both importer and exporter in terms of risk mitigation and explore new and emerging markets.
6) Treasury:
Treasury's key focus is to ensure the profitable management of the residual funds, oversee regulatory ratio management, and provide advisory services to top corporate clients on structured products and derivatives.
This division caters to the requirement of remittances of retail and corporate clients across the bank.
They also liaise with important Government Units in tapping surplus funds for the bank's requirements.
During past years, Treasury has concentrated on product upgrade, besides enhanced subscriptions to globally reputable Foreign Exchange service providers that enabled the bank to structure innovative solutions in line with the requirements of key clientele.
The Treasury division functions as the nerve centre of the bank and contributes significantly to the bank's operations with a special emphasis on the management of regulatory ratios, liquidity and profitability, besides addressing various risks associated with money, FX and interest rate markets.
Overall, Wholesale Banking has achieved the desired levels of synergy from the combined operations of all the six units within, as well as from the retail division of the bank, in extending superior services to corporate clients. In doing so, it clearly demonstrated its ability to enrich the relationship through enhanced product sales to diverse top-end clients in this market.
In short, the wholesale banking business model demonstrated our mission statement of the bank as a "One-stop financial super-mall offering boutique products and services across various segments, each with a unique set of propositions".
© Oman Daily Observer 2012
