In a region fraught with turmoil, Oman Arab Bank SAOC stands out as an oasis of stability and growth deeply rooted in its traditional standing and historical values. Remaining true to its traditions, Oman Arab Bank SAOC has embraced up to date global banking trends in management and infrastructure. This focus on development, while maintaining traditional core, is what defines us. For nearly three decades we have partnered with the nation in infrastructural development, industrialisation and community service. The bank’s focus on its core values, despite the global financial crisis, and sound conservative policies, has helped us to grow while maintaining asset quality and profitability.
Oman Arab Bank SAOC has been offering comprehensive banking solutions in the Sultanate of Oman since October 1984. The bank began its operations after acquiring the branches of Arab Bank Plc, which had been operating in Oman since 1973. Then in 1992, operations in the Sultanate were further expanded by the acquisition of all the retail branches of Omani European Bank, with which OAB then merged in 1994. Oman Arab Bank has currently more than 60 offices and branches spread across the Sultanate.
Oman Arab Bank offers a wide range of products and services to meet the needs of a broad range of financial services to individual, corporate, and institutional customers, government agencies and other international financial institutions. These services include retail banking, investment banking, trade financing, merchant banking, commercial banking and real estate lending.
Our competitive advantage revolves around four pillars:
- Diversified customer base;
- Conservative yet developmental approach;
- Synergies developed through Arab Bank;
- Experienced and loyal senior management.
Our staff numbers more than 1000 employees. OAB believes in continuous development and quality improvement of all its assets, including human assets. The overall Omanization is currently more than 93 per cent and the bank believes that for the effective management of a post-crisis situation, local talent will play its vital part.
Moody’s Investors Service has given OAB a long-term and short-term foreign currency deposit rating of Oman Arab Bank to A2/Prime-1. The outlook on these ratings is stable, reflecting upon the strength of Oman Arab Bank. Capital Intelligence, the international credit rating agency, has given OAB foreign currency ratings of BBB+ for long-term and A2 for short-term, independently reinforcing its credit worthiness.
Oman Arab Bank has an active retail banking and marketing department continuously striving for better customer solutions and products to match their needs. Initiatives in e-banking and mobile banking, being the pioneer in Oman, has contributed positively in increasing the customer base of the bank and provided customers benefits with the latest use of technology. From conventional banking products to bancassurance products, they provide customers with a wide variety to choose from; all according to their specific needs, ranging from savings plans, retirement plans and educational plans. Oman Arab Bank SAOC also introduced online and mobile bill payment systems, and enhanced the systems to perform additional banking services such as payment, cashing and paying utility bills. Oman Arab Bank has invested in building a sophisticated infrastructure and this infrastructure is a refined IT backbone that can be aligned quickly and effectively with evolving business needs.
Oman Arab Bank and Investment Management Group accolades
Some of the awards and recognition received by the
Oman Arab Bank and IMG:
- OAB-IMG has been awarded the “Best Investment Bank in Oman” by World Finance.
- Oman Al Arabi Fund was awarded “Best Regional Investment Fund” at the Banker Middle East Product Awards 2013.
- OAB was awarded the “Platinum Technology Award for Quality and Best Trade Name” and also accredited with the “TQM – Total Quality Management Aptitude Seal for High Quality Performance & Best Customer Satisfaction” from France’s Association Otherways Management & Consulting.
- OAB has been awarded “BIZZ Award” for excellence in business practices by WORLDCOB.
- OAB’s website (oman-arabbank.com) was awarded by Oman Web Awards 2013 in the “Banking & Finance” category.
- OAB received the “Corporate Governance Excellence Award” from the Capital Market Authority’s – Oman Centre for Corporate Governance
- OAB was awarded the 39th International Trophy for Quality by the Trade Leaders’ Club.
- OAB was awarded the “Best Banking Group” in Oman by World Finance.
- OAB-IMG has been awarded the “Best Investment Bank in Oman” by World Finance for two consecutive years.
- OAB-IMG has been honoured by the MSM as one of the best brokerage houses in Oman in all areas including services offered, organisational structure and volume for six consecutive years.
- OAB-IMG’s website (www.oabinvest.com) was awarded in the “Banking & Finance” category by Oman Web Awards 2009.
- Oman Arab Bank was ranked as the “No 1 Bank” of Oman for the year 2008 by Business Today – Ernst & Young Banking & NBFC Survey.
- Oman Arab Bank has been awarded Superbrand Status after a strict selection process by the Oman Superbrands Council.
- Oman Arab Bank was ranked as the “No. 1 Bank”
in Oman in the Business Today Survey.
The financial crisis had a limited impact on the economy in the Sultanate and on its financial and banking institutions. This is the result of the wise planning, far-sightedness and prudent policies of the government, which continued to carry out the projects, increased expenditure, and ensured that the adequate liquidity needed was always available to the banks. Meanwhile, OAB has remained focused on playing their role in development. The bank is a pioneer in financing projects throughout the Sultanate.
Financial performance: 2012
Net profit after tax (US$65.63m) for the year has increased by 9 per cent from the previous year with the growth in the loans contributing to a healthy growth in net interest income. The return on equity (15.72 per cent) reduced from the previous year due to a lower rate of growth in the net profit after tax combined with increased equity due to the rights issue for the Islamic banking services.
The return on assets at 2.03 per cent for 2012 is still the best among Oman’s banks, despite a 23 per cent growth in total assets. The additional staff costs, with the growth in the bank’s operation, resulted in an increase in cost to income ratio (46.92 per cent) as the growth in income is under pressure due to the higher level competition.
Earnings per share reduced by 4 per cent from the previous year due to the lower rate of growth in net profit, while the share capital increased. Growth in loans at 13 per cent, with a 11 per cent increase in corporate loans and a 13 per cent increase in personal loans, is in line with the average market growth. Deposits growth of 13 per cent, which is at the same level as growth in total deposits of all banks, has supported the growth in loans.
Issue of subordinated bonds contributed to the strong Capital Adequacy Ratio (16.91 per cent) which is well above the minimum requirement of 12 per cent by the Central Bank of Oman (CBO).
Omani banking sector environment & performance Oman’s Banking sector is regulated by the CBO, also bestowed with the task of supervising the nation’s monetary policy. The banking sector locally is comprised of seven commercial banks and two Islamic banks, in addition to 18 foreign banks. There are also two government-owned development banks.
Profitability among Oman’s banks has been healthy, given strong interest spreads that persist between deposit and lending rates despite the recent fall in lending rates invoked by CBO regulations. In 2012, the six listed banks in the country, reported total profits of approximately US$691m, implying a ROaE of 13.4 per cent, despite the impact of a merger that witnessed equity dilution and depressed profitability in 2012.
At the end of Q1’13, provisions (including reserved interest) stood at a healthy 2.4 per cent of total credit. This represents a marked improvement in credit quality over the last 10 years and subsequent to the fallout of the financial crisis. Further, non-performing loans at the end of 2012 equalled just 2.2 per cent of total loans as per the CBO.
Since the beginning of 2012, the six listed commercial banks (representing 90 per cent of total credit at the end of 2012) have raised an estimated US$1bn in equity and subordinated debt issuances. Further, at the end of 2011 and 2012, non cash dividends by way of stock and mandatory convertible bonds for the six listed commercial banks, amounted to US$157m and US$140m respectively.
With the top three banks in Oman accounting for approximately 67 per cent of total credit at the end of 2012, the sector signals further alliances, given the advantage larger banks exercise over smaller ones in scale and consequently, pricing. Earlier this year, officials from the Capital Market Authority (CMA), publicly encouraged consolidation in the country’s crowded financial sector and suggested limiting issuances of new bank licences in the country.
Islamic Banking in Oman, though nascent, warrants a mention given the activity around the financing endeavor over the last two years and the potential it possesses. The CBO licensed Islamic banking services in 2011 with the objective of diversifying banking services and augmenting financial inclusion. Two new local banks have been granted approval to operate as Islamic banks, with almost all local conventional bank’s setting up Islamic banking windows.
Investment Management Group (IMG)
Established in 1998, Investment Management Group (IMG) is the investment banking arm of OAB. IMG is licensed by the Capital Market Authority and Central Bank of Oman to carry out Investment Banking Activities. Being an established player in the market OAB-IMG is the most comprehensive source on investment banking services in the Sultanate. Continuous product development and top-of-the-line advisory services has played its part in supporting equity market stability, public issues advisory and management, and research coverage of all major sectors of economy. Lo’ai B, Bataineh (DGM Investment & Development) heads the IMG since inception and is supported by a qualified and experienced team.
Having licensed in all major aspects of investment banking, OAB-IMG provides the following services:
- Managing Investment Funds
- Issue Management
- Portfolio Management
- Investment Advice & Research
- Marketing non-Omani Securities
- Secured Financing
The Corporate Finance & Advisory division (CF&A) is an active player in issue management and advisory services (such as IPO, rights issuing &amo; private placements, collecting bank) raising more than U$5bn. It plays an active role in developing issue management process in Oman in coordination with the Capital Market Authority.
In 2013, OAB-IMG has managed the initial public offering of Sharqia Desalination Co as the Financial Advisor and Lead Issue Manager. The issue has been among the most successful IPOs in the Sultanate receiving more than 4,700 applications of US$84m i.e. 13.3 times subscription. Oman Arab Bank was also one of the Collecting Bank for the issue. OAB-IMG managed the Bond Issue of Muscat Finance SAOG as its Financial Advisor, Placement Agent and Collecting Bank. The company has decided to broaden its funding sources and issued bonds on private placement basis to fund its general financing needs and expansion. The scope included fund raising and placement management. In 2012, OAB acted as the lead issue manager, lead underwriting arranger and placement collection agent for the Bank Nizwa IPO.
The Asset Management arm currently has assets under management (including custody) in excess of US$700m. Asset Management offers active and distinctive portfolio management services backed with a solid performance track record. Through Asset Management IMG is the first Oman based institution to successfully launch a mutual fund investing in Oman & GCC, post the global financial crisis. Portfolio’s managed by IMG have consistently outperformed their respective benchmarks over the past 10 years.
IMG began brokerage operations in 2002 and is one of the top brokers on the MSM. Covering 10 regional markets including all GCC markets, Lebanon, Palestine, Jordan & Egypt. IMG offers both Broker Assisted and Online Trading Services for the Omani markets. Clients include high-net-worth individuals, Pension Funds, Institutional and Corporate clients, both local and foreign. For five consecutive years OAB-IMG has been awarded as one of best brokerage houses in Oman in all areas including services, organisational structure & volume by the Muscat Securities Market.
IMG’s Research Division provides in-depth analysis of companies, sectors, market, and economy to assist clients with investment decisions. For the preparation of research reports, all information used will be available in the public domain.
All analysis is conducted independently and quality standards are not compromised.
IMG’s Custodial Services is among the very few of its kind in the Sultanate. It provides services to its client by maintaining separate client wise accounts, holding in safe custody client’s financial instruments, arranging settlement of transactions, monitoring of corporate actions, calculating and collecting income from securities, managing transactions by closely monitoring cash positions and perform foreign exchange transactions, if required, and sending detailed account reporting.
IMG offers diverse investment solutions to Institutional and individual clients through Private Banking services. IMG has a tie up with Kotak Securities India Limited. It provides access to Indian financial markets to NRI’s, Omani nationals and other expats. Products offered include Mutual Funds, Online Trading, PMS, IPOs and more.
To find out more please contact: Lo’ai B. Bataineh
(DGM Investment & Development & Head of IMG)
Oman Arab Bank SAOC, Investment Management Group, PO BOX 2010, Ruwi, PC 112, Muscat,
Sultanate of Oman, Ph: +968 24 827 300,
Fax: +968 24 827 367, e: L.firstname.lastname@example.org or visit: www.oabinvest.com