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Soren Nikolajsen

CEO, Alawwal Bank

Abdulaziz Al-Onaizan

CEO, Bank Albilad

How do recent reforms influence your business and overall strategy? Soren Nikolajsen Vision 2030 and the National Transformation Plan bring exciting and significant changes to the Saudi economy. The push […]

How do recent reforms influence your business and overall strategy?

Soren Nikolajsen Vision 2030 and the National Transformation Plan bring exciting and significant changes to the Saudi economy. The push away from high dependency on the oil-related sectors will for banks result in an adjustment to our business activity and open up new opportunities in the private and non-oil sectors. The land tax, introduction of VAT, and capital market reforms are other initiatives that will affect the Saudi economy in different ways. On the capital markets side, we welcome the push from the regulators to encourage a more active corporate bond market. On equities, the potential inclusion of the Saudi stock market to the MSCI Emerging Markets Index would be very positive and help improve liquidity in the market.

How have your retail banking operations been performing?

Abdulaziz Al-Onaizan Over the years, our strategy was to expand our branch network. Today, we have the fifth-largest branch network. We have more than 150 branches and more than 175 remittance centers across the Kingdom. We want to optimize the existing branch network in terms of service, customer care and experience, as well as to digitize our operations. This year, we opened five self-service centers that can operate with extended hours to basically cater for self-service needs, like applying for consumer loans or card products.

To what extent do market developments affect your future strategy?

SN Technology and digital services will play a particular important role for the industry in order to meet the needs and demands of our customers. Banking in general, and retail banking in particular, is changing rapidly. 97% of basic transactions like withdrawing money, paying bills, and making transfers are today done via electronic platforms such as online, mobile, or ATMs. That is a significant shift from the past, and demands a lot from us as a financial services provider in terms of what products we offer and how we deliver them. And growth is strong. Last year the usage of our market-leading mobile application grew by 65% and mobile payments by 171%.

Do you expect a boom in the Islamic finance industry in Saudi Arabia now, as interest is heightening?

AAO On the consumer side, it has grown substantially, and we have seen conversion of conventional banking to sharia-compliant banking. Society is conservative by nature, and if we offer both sharia-compliant and non sharia-compliant financial products, people will choose the former. Islamic banking is becoming popular in the international markets as well. After a financial crisis, people will always look for new ways of financing to basically share the risk. Conventional financing is all about transferring the risk. On the other hand, sharia financing is about risk sharing; therefore, we are close to the client throughout the lifecycle of the transaction.

What are your goals and objectives for the next 12 months?

SN We will stay focused on our core business areas and serve our customers well. The overall business mix is roughly where we want it to be, so there are no big strategic deviations. A key focus area remains to be the development of our digital services as we continue to be a leading innovator of financial services products in the Kingdom.

AAO For Saudi Arabia, the worst is behind us. We have had difficult times over the last two years with the drop in oil prices. The government has taken concerted actions to reduce spending and find alternative ways to finance the deficit. Given these efforts by the government to manage the fiscal position of the country, lowering the deficit will be better than expected. We are optimistic about Bank Albilad’s future and confident all these initiatives we are taking to enhance the business will be successful. We are trying to manage the efficiency in the organization that will put us in a better and stronger position. We are focusing on digitizing our services in retail banking and cross-selling as well as SME business supported by the government, which we believe will be the main drivers of growth.



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