(MENAFN - Muscat Daily) National Bank of Oman, the sultanate's second largest bank by assets, has won several international accolades for excellence in various spheres of banking, especially retail. In 2011, the Singapore-based magazine, The Asian Banker, named NBO the 'Best Retail Bank in Oman.' Recently NBO was conferred the 'Oman's Bank of the Year 2012' award by UK-based The Banker magazine.
Harshdeep Singh Munjal, GM of retail and private banking, was recently featured in Lafferty's survey of top global leaders in retail banking, becoming the first retail banker from Oman to make it to the prestigious list. Munjal speaks to Muscat Daily about the performance and achievements of NBOs retail banking division and the outlook for the segment.
NBO has been recognised with many prestigious awards, especially in retail banking. What is contributing to this success?
The success of our retail banking division can be attributed to many factors. And the bank continues to leverage its customer-centric strategy of introducing new and innovative products and services to respond to dynamic market needs.
NBO designs innovative products and services because it is a research-driven organisation that is focused on responding to customer requirements in light of new market realities.
Al Kanz Millionaire is a pioneer in its category as the first product in the sultanate to entice customers to save and offer them great rewards in return. We see such a product continuing to succeed in the foreseeable future.
You were recently featured in Lafferty's 'Best Retail Banking Leaders' survey. What does this achievement mean to you and what do you think makes a successful retail banker?
Lafferty studied the profiles of global retail bankers who have made the most difference to profitability, culture, and work environment of banks, and came up with a list of around 100-150 top retail banking leaders.
When I joined NBO, I found business performance affected by staff members who seemed somewhat disengaged. We created a sense of achievement and appreciation amongst them very quickly by setting smaller targets, the achievement of which we celebrated in a big way. I believe that within an organisation people are hungry for positive reinforcement through an appropriate reward-and-recognition mechanism.
All these efforts have enhanced our services substantially and the retail operating profits have doubled since 2010.
How has NBO's retail business fared in the last couple of years?
The bank almost doubled its operating profit in 2011 and crossed this milestone in 2012. There was substantial growth in 2011, and despite the stringent regulatory controls introduced last year, 2012 was another impressive year of growth.
NBO is on course to be the No 1 bank in Oman. It continues to strive to improve its services, procedures, systems and turnaround times. The bank has been able to reduce the turnaround time for housing loans to three days and personal loans to one day of receiving an application. The motivation, unrivalled commitment and innovative ideas of our staff are the secrets to our success in retail banking.
What about the performance of the housing-loan segment?
The segment posted an impressive growth of more than 62 per cent last year. Several key changes were initiated to position Al Manzel as the leading home-loan product in the market with the fastest turnaround times and lowest interest rates. Al Manzel is undisputedly the No 1 home-loan product in Oman.
Last year, CBO issued new guidelines on capping personal lending. Do you believe there is still room for growth in the retail banking space?
I believe there will be growth, but it will be impacted by the cap on personal lending. Personally, I think that capping borrowing at the individual customer level was apt and a very important decision. It could, however, have been implemented more gradually.
The new regulations put a cap on borrowing from banks alone; as a result customers are turning to credit-card companies and private-financing institutions. I believe these regulations will need to be applied across the board in order to meet their objectives.
Have these regulations impacted NBO's retail performance? What are your expectations from the retail segment this year?
The growth rate in retail lending has slowed down as with every other bank. New business bookings have dropped but the loan portfolio is steady and is not declining. Housing loans were barely affected as the regulations were less restrictive on this segment. I believe the growth in 2013 and 2014 will not be as significant as before, but it is going to come by capturing more market share by focusing on price and service levels.
What changes do you anticipate in retail banking in the coming few years?
Consumers will benefit more from the competitive environment. Banks will need to be better and more efficient. There is going to be a lot more technological improvement and enhancement in services that provide more facilities to customers. We are to soon launch our improved and more secure chip debit cards for customers.
What about the strategy to compete for and acquire low-cost deposits?
We have been doing very well in acquiring low-cost deposits by capturing more than three per cent of the market share in 2012. I think we have been doing exceedingly well and we are going to do more of the same with constant tweaking and improvements. We will continue to market the retail-banking segment through our souks and carnivals, which have become extremely popular.