While the economy witnessed a positive turnaround in 2018 as a result of the recovery of the oil price, prudent fiscal management continues to be a priority as Oman seeks to keep the budgeted deficit below 10 per cent of GDP. Following the spike in the actual deficit in 2016 at around OMR 5.3 billion (initially budgeted at OMR 3.3 billion), the deficit appears to be managed and is showing recovery. Indeed The estimated deficit in 2019 is lower than the deficit of 2017 by approximately 18 per cent and lower than 2018 by nearly 4 per cent. This positive trend is now allowing Oman to cautiously invest in projects that are key to sustain the country’s future.
Similarly, Oman’s revenues have also seen a steady increase. Growing from OMR 7.6 billion in 2016 to OMR 9.2 billion in 2017, and OMR 9.5 billion in 2018. Revenue is expected to increase further and reach OMR 10.1 billion this year. While these estimates were based on a relatively conservative average oil price of USD 58 per barrel for 2019, it is believed that the oil price could be significantly higher for the year.
Capitalising on this economic stimulus, Oman Arab Bank has laid down significant groundwork in 2018 to build on our existing capabilities and support our growth aspirations. This includes critical enhancements to our IT infrastructure, risk management framework, up-scaling and refurbishing our branch network and transforming our channels. Furthermore, it has achieved this while enhancing its asset quality, strengthening its financial position and increasing productivity for the years ahead.
The Bank has also continued to work towards developing its staff, attracting local competencies, and enhancing the skills of its teams in each of its various branches, through programmes specifically designed for Oman Arab Bank. In fact, last year alone, over 850 employees participated in various training courses designed to match their area of expertise.
Furthermore, we have optimised our portfolio, by identifying in which high-potential lines of business to invest and the right target segments to focus. This included strengthening the Trade and Elite value proposition, deepening relationships with Government and Semi-Government entities, and growing our Al Yusr portfolio with a strong focus on SMEs.
Overview on the Bank’s achievements for 2018
In 2018, both the bank and its Islamic offering Al Yusr outperformed its targets, with a net profit of OMR 30 M and OMR 1 M respectively.
Al Yusr signed an agreement to finance the 4-star Movenpick hotel – Bowsher, a step that will boost Islamic banking finance for local projects within the tourism sector.
We continue to improve asset quality and manage our exposure to risk, maintaining a robust risk management model, while retaining a strong focus on growing our share of wallet in key target segments.
We successfully closed an unsecured perpetual subordinated bonds value of OMR 42,553,000 as additional Tier 1 capital with an issue price of OMR 1.000 per bond noteat an interest rate of 7.5% per annum.
OAB and Thawani Technologies entered into a partnership agreement under which OAB will function as the banking partner of the Thawani platform, an innovative e-payment solution.
A new system called ‘Mersal’ was implemented. This system was designed to follow-up on internally sent orders from all departments and track the time required for completing them. With Mersal in place, OAB’s executive management now has, at their disposal, accurate figures about the number and kind of orders exchanged between departments and the time taken to complete them. With this information in hand, the Bank is working towards reducing the completion time of orders and take yet another step forward towards offering the very best customer service in the Sultanate.
We continue to revamp our branch network and digital channels to create an omnichannel experience that will set us apart from the competition. This includes the launch of our Mobile Banking App, Internet Banking, the NFC Tap and Go payments and OAB Rewards redemptions on POS machines. With many more launches in the pipeline the Bank will continue to enhance our customers’ banking experience in 2019.
We launched a new Instant Issuance service for debit cards in our branches across the Sultanate. The new Instant Issuance service is capable of personalising and issuing EMV/NFC chip-equipped cards and is the first of its kind in Oman.
We have established a “first-to-market” innovation lab in the Sultanate to provide an agile testing environment for innovative open banking solutions to be developed and implemented thereby encouraging entrepreneurship and creativity..
We introduced our remote account opening service, which enables us to offer services at a location convenient to the customer. The experience is digital and is completely paperless and instant. The service is deployed on fully secured tablets with digital KYC documents and signature.
We have launched various talent management initiatives to accelerate this cultural transformation. This includes the newly launched LEAD 3 programme for high potential employees, the Mutamayizoon award for outstanding performance and the ‘Insights’ Workshops to promote a culture of ongoing learning Aa comprehensive calendar suite has already been determined for 2019 and will be announced in due course.
We have launched a new integrated customer care campaign aimed at enriching customers’ experience at each of our 58 branches across the Sultanate. This was achieved by appointing a customer care manager in each branch whose responsibility it is to ensure that each OAB branch visit is a unique banking experience.
As part of our ongoing transformation strategy, we updated three of our branches in 2018. These branches feature an enhanced brand identity with a refreshed look and feel, augmented by a number of new features and systems.