Oman Arab Bank (OAB) was established on 1st October 1984 as a closed joint stock company. The bank began its operations after acquiring the branches of Arab Bank Plc, Jordan, which had been operating in Oman since 1973. 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. Forty nine percent of the bank's share capital is held by Arab Bank Plc and the remaining 51 percent is held by a leading Omani investment company, Oman International Development and Investment Co. SAOG.

OAB has made significant contributions to the development of the sultanate's economy by financing a number of infrastructure construction and development projects such as highways, airports, harbours, power stations, water desalination plants and hospitals.

Recently, OAB was selected as the local banker by the main contractor, who is building the Liquefied Natural Gas plant, near the city of Sur. This contract is by far the largest (US$6 billion) and nationally the most important project in the Sultanate of Oman.

OAB has consistently received excellent credit ratings from international rating agencies such as BankWatch, Capital Intelligence and Moody's. These ratings have always been the highest among Omani banks.

Within the Sultanate of Oman, OAB has 37 branches/offices. The bank has also an extensive international reach through nearly 400 branches and associates of Arab Bank Plc spread over 40 countries.
Oman Vistas spoke to OAB CEO Abdul Kader Askalan who has been with the bank since its inception in Oman.

Excerpts:

With the rise in petroleum prices and the present economic boom in the Gulf, what are the new opportunities for Oman Arab Bank?

The main driver for the market is the level of government spending which is linked to production and price of oil and due to the high oil prices in recent times the economy has flourished. As a consequence, the banking industry has achieved record profits due to the trickle down effect.

One also cannot forget to mention the Port of Sohar and all the mega projects that have sprung up recently around the port and the number of new companies that have set up shop in Oman to provide services to the project one way or another. This has opened new avenues to the banking industry either at the project finance level, providing banking services to the project company and the EPC contractors as well as providing local banking services to the staff. We have been quite successful in tapping into this area where we are currently providing banking services to almost all of the companies currently involved with the project.

Furthermore, the tourism industry has also witnessed significant development which opens up different business opportunities for the bank both in retail and corporate areas.

Almost all local banks seem to be diversifying their product portfolio and now we see banks also selling insurance products. How has been Oman Arab Bank's experience with insurance products?

OAB has launched insurance products after detailed study of market appetite and our customer profile. Our experience so far is quite encouraging; hence we intend to add new products, such as, auto insurance as well as some exciting low cost programs that could add value to our existing customer.

It is believed OAB has a very high ratio of Omanisation. How have you been able to achieve this? What do you think are the factors for sustaining such high levels?

Omanisation and training are two keystones of OAB's employment policies. Ninety three of the workforce in OAB are Omanis, where around 34 percent of Omani staff hold top management positions and more than 68 percent of OAB's management positions are held by Omanis.

OAB encourages Omani students by introducing them to the bank's environment through a summer internship that explains to the college students what banking is, and guides them on how to be part of OAB. And as per the bank’s regulations, each position should be filled with the right background. In order to sustain that, the bank undertakes further development of the bank's staff by designing a training programme to ensure that all staff get the right professional skills.

With the boom in real estate there seems to be many home loan schemes floated by Omani banks. What is OAB's experience in the same?

OAB has always kept customers’ needs at the top before embarking on any new service or product. OAB's Al-Dar Housing loan scheme has received tremendous response from many of our customers as well as non-customers due to its unique features and our quick turn around time.

Is cyclone Gonu likely to affect the bank's performance in 2007?

The key to our success is based on our full belief in three guiding principles: Solid, Stable & Committed, hence our growth graphs of previous years are testimony to this statement. The recent cyclone Gonu has not had any major effect on the bank. However, our Qurum branch was affected for a while and some of our ATMs were also out of service for a short period due to disruption in communication facilities. But, we are pleased to say that all our branches and ATMs are up and running and servicing our customers now.

How long have you been with Oman Arab Bank? What are the important milestones achieved during your tenure with OAB?

I joined the Arab Bank in 1957. And in 1973 Arab Bank established its branch in Oman, subsequently I was appointed as the Regional Executive Manger in charge of Oman operations. In October 1984, I was appointed as the Managing Director of Oman Arab Bank when the Arab Bank branches in Oman were reconstituted as a closed joint stock company. In December 1998, in compliance with CBO regulations, I was appointed as the chief executive officer, the post that I hold till date.

I have led all the developments and expansion in the bank since its inception, back in 1984, of course with a highly talented team, and have driven the conservative policy that OAB currently operates under. The adopted policy has enabled the bank to consistently produce solid results and returns year after year.
“OAB encourages Omani students by introducing them to the bank's environment through a summer internship that explains to the college students what banking is, and guides them on how to be part of OAB.”