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Lloyd Maddock

OMAN - Finance

Loans Performing

CEO, Ahli Bank


Lloyd Maddock became the CEO of Ahli Bank Oman SAOG in February 2014. Before assuming his position at Ahli Bank he was the Deputy Group CEO-Corporate Banking at Ahli United Bank Bahrain. Prior to joining the AUB Group, he was CEO of HSBC in Pakistan and Kuwait. Since graduating in Engineering, he has been a career banker with 23 years of experience in the Middle East, North America, Europe, and the Asia Pacific region.

"Ahli United Bank is a strategic partner with headquarters in Bahrain. "

How would you assess Ahli Bank’s performance over the past year?

Last year Alhi Bank saw consistent growth. We remain the fastest growing bank, increasing our loans by 26% and our bottom line just below 10%. We currently have the lowest cost-income ratio in our cohort. We have the lowest ratio of non-performing loans as well, at 1%. Our target return on equity is above 13% and we were able to maintain this very well. Last year we launched “Al-Hilal” Islamic banking, which has seen good growth and acceptance by corporate and retail customers. We also launched a dedicated SME unit to meet the regulatory guideline to allocate 5% of our loan base to this sector. All in all we have been greatly pleased by the bank’s progress.

Ahli Bank entered into a MoU in order to provide banking services in Duqm. What are the expected outcomes?

Many banks have signed similar MoUs. Basically, the LMU provides assurance that we will be one of the panel banks to be approached by companies investing in Duqm. Despite the oil price decline, the government is committed to the development, and we expect to see billions of dollars in investments.

“Ahli United Bank is a strategic partner with headquarters in Bahrain. “

What other projects are you financing of significance to this?

Ahli United Bank is a strategic partner with headquarters in Bahrain. We work with it on transactions and cross-border financings. This is a partnership that extends our underwriting capacity significantly. Recently, for example, we were mandated to finance the Orpic Muscat to Sohar pipeline project, which is around $250 million in financing. This deal has concluded, and we are currently working on a number of other projects.

Are there other major initiatives on which Ahli Bank is focused?

Some people say branch banking is a bit of a sunset industry. I do not particular think it is, but as we move forward we are investing in different channels like mobile and internet banking. We have developed business-to-business e-banking solutions. We are prioritizing digital solutions in addition to selective additional branch openings. When we launched Islamic banking, we opened six branches on the same day because we were not able to simultaneously launch internet banking. This is now about to be launched. We recently opened six customer service kiosks in shopping malls, which are open 10am to 10pm, with cash deposit/withdrawal machines. With most banks embracing the digital transformation, it is a very broad category, and our challenge will be to differentiate Ahli from other banks in terms of products and pricing. We are focusing on our turnaround times, complaint management handling, and customer service.

How are you able to attract new customers, foreign or domestic?

Increasingly remote (or digital cellular) banking is important because most people have access to mobile phones. We can integrate a full banking model in this manner, to reach customers throughout Oman. I would observe that we attract many new customers through word of mouth. For example, although we have not yet advertised Islamic mortgage pricing, we are struggling to keep up with demand. In terms of new companies coming into Oman, we benefit from our partnership with Ahli United Bank in making introductions through its regional offices in other countries. In particular we are serving incoming investment from Egypt and Kuwait, both directly and through the free zones.

How would you describe the health of the banking sector today?

I have actually worked in five GCC countries, all but Qatar. My observation is that in Oman the banking sector is in good shape. Despite the economic crash, there have been no bank failures here because banks are well regulated and well capitalized. They are consistently profitable and prudently managed. Within the region they have the lowest non-performing loans ratio of about 2%, and among the highest capital adequacy ratios.

Will this confidence in banking fuel more investments throughout the country?

I have no doubt about that because the capital investment project plan is significant, and we are seeing foreign direct investment coming in. When the oil price fell suddenly in December of last year, Oman was one of the countries described as being overly dependent on oil. The local stock market declined substantially, and many foreign investors withdrew money at that time. But interestingly, Oman was able to recover quickly because local investors saw value and put money into the stock market, which rebounded quickly. This shows us that investors have confidence in the securities market and those firms listed on it.

How will this confidence be maintained in the coming years?

Despite the sudden drop in oil prices, the government actually increased its budgeted expenditure by 4% in 2015. It listed expected sources of revenue and showed allocated expenses, so it was clear that the program of government-led investment would continue. The budget at that time was based on an average price of $75. Though this may or may not be the case this year, it is clear that the government has adequate resources from various areas, to bridge the budget deficit forecast. We are seeing the economy diversifying, and there are great opportunities beyond oil and gas

What are some of the serious challenges facing the banking sector?

The biggest challenge might prove to be the liquidity in the banking sector and the market. In the GCC, in respect of their banking sectors, governments tend to be the biggest depositors, borrowers, and owners, whereby banking and government are comparatively more inter-dependent. My concern is replacing any withdrawal of government-linked deposits, and how this potential scenario might reflect to banks’ capacity to lend. There is no indication that such withdrawals will occur, but it is important for banks to diversify their deposits and have standby lines of credit from foreign banks. We are also expecting the US Federal Reserve to increase interest rates later in 2015, which should renew borrowers’ appetite for interest rate hedging.

What are your expectations for the coming year?

Ahli Bank expects similar progress to last year. We expect to see credit growth and increased profitability. I am optimistic it will be another strong year for the bank.

© The Business Year – May 2015



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