The Business Year

Lloyd Maddock

OMAN - Finance

Sector Landmark

CEO, Ahlibank


Lloyd Maddock took charge as the CEO of Ahlibank Oman SAOG in February 2014, joining from Ahli United Bank Bahrain, where he was Deputy Group CEO-Corporate Banking. 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.

"The banking sector as a whole seeks to allocate a minimum of 5% of lending activity to SMEs."

What are some of the strategies that Ahlibank has adopted to deal with the Oman market?

Ahlibank became a fully fledged commercial bank in 2008, prior to which it had been a purely retail housing bank. We have established a footprint of 20 branches, having set up electronic delivery channels for internet banking, both for personal and corporate customers. We also have a fully fledged business-to-business (B2B) internet banking proposition. We are about to launch mobile banking services as well. Ahlibank has been growing our assets and liabilities and retaining capital. Overall, 2013 was quite a landmark year for two reasons. First of all, we opened seven Al-Hilal Islamic branches, and now have the largest number of Islamic branches in the country. We also formalized a dedicated SME unit that provides both Islamic and conventional facilities. Ahlibank provides traditional working capital finance and leasing. Customer interest, particularly in our Islamic window, has been highly encouraging. Because we are growing from a relatively smaller base in the country, we grew our loan base three times faster than the sector over 2013, while deposits grew two times faster. Comparatively within the sector, therefore, we are growing rapidly, although the key consideration has been to maintain credit quality, whereby the ratio of our non-performing loans (NPLs) has remained flat at around 1%. Over and above that, it is evolving. We are constantly exploring new propositions for fresh products, particularly in Islamic banking. The Sultanate has a number of government-sponsored projects in the pipeline, which will require the banking sector’s support. In terms of the banking sector, the stability and opportunities available within Oman compare very favorably to the wider region.

Do you anticipate launching any new projects in Oman over 2014?

We are about to launch mobile banking applications, and also introduce an Islamic credit card. And with the increasing acceptance of Islamic products, we are set to introduce more. We were one of the first banks to launch an Islamic investment fund in 2013, called Al Hilal. It invests in Islamic operations and companies throughout the region. Perhaps one of the biggest gaps in the market right now concerns Islamic banking. We have two dedicated Islamic banks in the country and most of the other banks have set up an Islamic window, which means they conduct both conventional and Islamic business. There is significant deposit generation going on within the Islamic banking sector, but not too many opportunities to invest with Islamic compliance. Many commentators expect that the government will issue a sukuk in 2014, and that we will see some of the companies involved in major projects either issuing sukuks themselves, or else project bonds, because there is considerable liquidity that is being invested overseas that can be tapped within Oman.

What are your competitive advantages?

One of our advantages is that we have a fit-for-purpose branch network. We open branches in those areas where we foresee demand. Thus, our branch network expansion has been prudent and well planned. Some of the upcoming areas of development in the country include Sohar, Duqm, and Salalah, where we have operations. Through our strategic investor, Ahli United Bank, which owns 35% of our shareholding base, our clients have access to the Group’s footprint across seven countries in the region, plus the UK. This gives us the opportunity to support our customers in Oman when they expand abroad, and equally those customers from the region who are looking to move into Oman. We are a local bank, but with a regional presence, which is unique. Over and above that, we are growing quite quickly compared to the market. That gives us the advantage to be aggressive in certain areas and focus on customer service.

“The banking sector as a whole seeks to allocate a minimum of 5% of lending activity to SMEs.”

What is the importance of mobile banking and e-banking in Oman?

We have built in-house a B2B electronic platform that enables customers to perform such tasks as payroll payments, remittances, and reconciliation. This is in addition to our personal internet banking service. We do see increased awareness and interest from both retail and corporate customers in such electronic channels, and we consider the investment in such services to be very important in the years ahead. Mobile banking is a new feature within Oman, and we are about to launch our own mobile banking application. However, it remains important to provide banking services through traditional branch and ATM networks, particularly in terms of savings and investments. For example, in Oman, when individuals seek investment advice, more often than not they take advice from family members.

How do you support SMEs financially, and what are the related challenges?

The banking sector as a whole seeks to allocate a minimum of 5% of lending activity to SMEs. In addition to purely lending money, banks seek to support SMEs through providing sound advice on business fundamentals, through seminars, and workshops. This is both an opportunity and a challenge for banks in the sense that many banks have only recently started to focus upon the SME segment. This said, all banks appreciate the requirement to support SMEs, both for the generation of employment and the benefits that SMEs bring to the broader economy.

What is the main contribution for SMEs in terms of finance?

We see considerable demand from customers on the leasing side of the business regarding equipment—construction equipment, for example. On the one hand, we are focusing specifically on leasing equipment and, on the other we are focusing on more normal working capital provision. We have developed a credit approval policy tailored toward SMEs as most will not have three or four years of audited financials to provide. So, instead of looking at that and analyzing as you would do for a large corporate, we have other criteria to consider and evaluate. We also have a dedicated unit with professionals from within the industry whom we have hired to take this proposition forward.

Is the Ahlibank Group planning to expand its presence more?

While we will continue to expand organically, the bank will continue to look for good acquisition opportunities, both in the countries where we already have a presence and in the countries where we do not. We are a regionally focused group, and consequently this is where our appetite lies for growth.

As the new CEO, what are your personal targets for 2014?

I would say that continued sustainable growth is our aim. We want to grow the balance sheet, but we also want to keep NPLs in check. The metrics we challenge ourselves on are return on equity (ROE), return on assets (ROA), and to be best in class in terms of cost efficiency, which is currently the case. More specifically, we will build out our SME business and continue to develop our Islamic window. Meanwhile, we also want to provide our employees with the best working environment possible, and our new head office serves as a prime example. We strive to ensure that our colleagues enjoy a level playing field for career development, and we promote on merit. We want our colleagues to have meaningful, long careers with the bank and serve as ambassadors. I think our focus on customer service is the overriding consideration, however, this year. I am highly optimistic about the opportunities for the banking sector in Oman as there is a stable, well-regulated economy that is open to foreign investment. There are also many expansion projects—roughly OMR10 billion worth of projects over the next five years, which will require the banking sector’s support. Furthermore, the Sultanate is establishing strategic logistics centers, such as Duqm and Sohar, as well as new airports, ports, and railways. From that perspective, Oman is a country in which banks should continue to perform well.

© The Business Year – May 2014



You may also be interested in...

Raja Bou Fakher Aldeen Country Chief Executive, Oman Bureau Veritas Middle East LLC – Oman

OMAN - Green Economy

Raja Bou Fakher Aldeen


Country Chief Executive, Oman, Bureau Veritas Middle East LLC – Oman

Sana Saad Country Holder Officer, ABB

OMAN - Green Economy

Sana Saad


Country Holder Officer, ABB

Mahmoud El Kordy, Chief Executive Officer of GBM Oman

OMAN - Telecoms & IT

Mahmoud El Kordy


Chief Executive Officer, GBM Oman

View All interviews