Bank Dhofar: Stepping up the game

Abdul Omar Al Ojaili, Acting CEO, BankDhofar

BankDhofar continued to grow in all key areas despite the current economic and financial situation driven by volatile oil prices. 

Despite the economic issues due to low oil prices in 2016, Bank Dhofar has been able increase customer deposits and gross loans. How did the bank achieve these results?

BankDhofar continued to grow in all key areas despite the current economic and financial situation driven by volatile oil prices. The customer deposits mobilised by the bank achieved a growth of 11.58 per cent at the end of 2016 compared to 2015.

Raising funds at the correct pricing and managing the quality of lending to keep the NPAs to the minimum would be the major challenges in light of the current economic conditions. Staying focused on the core Principles of Banking: Quality and Prudent lending, Optimization of Performance efficiency and NIM, Management of Costs to achieve the optimal Cost to income ratio, reducing NPAs to minimize the effects of the economic crises.

What are the new innovations and developments introduced by the bank?

BankDhofar has introduced a number of innovations and developments.

  • We were the first bank to offer cardless cash service which enables cash withdrawals at ATMs without the use of a physical card.
  • BankDhofar was the first bank to provide and enable the international blocking feature on cards.
  • Instant transfer is a service only provided by BankDhofar that enables instant transfer of funds to any account within the country at any bank.
  • BankDhofar was the first in region to automate the corporate credit proposal process through a business process management system. n BankDhofar introduced new corporate services and facilities which include a payment & cash management (PCM) integration with key market players that was designed to improve customer’s toll collection process via integration of several parties’ systems; and a PCM integration made available to corporate customers through the prompt remote desktop capture service intended to overhaul the process of issuing and depositing of checks for corporate customers.
  • SME pre-packaged products are first to market innovation that are designed to enable SMEs through the effective standardization of products and services that are most relevant to this sector. The pre-packaged products significantly reduces the processing time and consolidates several processes into a single efficient process.
  • Business Banking (SME) credit cards targeted to the sector providing alternative financing options for SMEs.
  • Credit cards rewards programmes have put BankDhofar on the map for banks to recognize the loyalty of their customers.
  • Auto-disbursement of personal loans automates and completes the personal LOS process reducing the overall time from initiation to disbursement.

What factors will drive growth this year? What are the challenges?

In light of the highly competitive environment, as well as the continued low oil prices, BankDhofar initiated several initiatives that focus on improved efficiency, better pricing and customer experience for our valued customers. This will give us an edge over our competitors and bring in more customers and also increase customer retention.

BankDhofar improved upon its performance in 2015 by gaining the third rank in the 2016 BusinessToday- EY Best Banks and NBFCs survey. The bank added 30 points more to its tally to take its overall score to 307 this year compared to 277 in the previous survey. The bank scored high in the customer deposit category and performed well in parameters like efficiency, earnings per share (EPS), return on capital, growth in gross loans and interest spread.

 The bank's net profit increased 1.8 per cent to RO47.62mn in 2016 compared to 15.6 per cent growth in 2015. The bank retained its asset quality ranking this year too. The Total assets reached RO3.95bn as of December 2016 as compared to RO3.59bn at 2015 end, a growth of 10.02 per cent.

According to the bank's annual report, “The growth outlook for 2017 is cautiously optimistic, as the key risk would be the probability of a prolonged dip in oil price.

The government has estimated 2017 revenue at RO8.7bn, based on conservative oil price assumption of US$45 per barrel. Oil and gas sector is estimated to contribute revenues of RO6.1bn, accounting for 70 per cent of total revenues with non-oil revenues forecasted at RO2.6bn. The total expenditure is likely to come down marginally in 2017, thereby resulting in lower budget deficit estimates than 2016 figures.”

Bank Dhofar: Stepping up the game
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