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THE MOST BEAUTIFUL CARS IN THE WORLD

Each and every Aston Martin brings to life the culmination of world-class design, cutting edge technology and hand-finished craftwork. From the breathtaking One-77 and Zagato models, to the powerful Vantage range, to the exquisite Virage, DB9, DBS and four-door Rapide. Perfectly proportioned bodywork and luxurious interiors epitomise a marriage of form, function and impeccable finishing. It’s the combination of power and sporting ability coupled with refinement, luxury and exceptional beauty that make each car truly unique – and driving one such a truly outstanding experience. Each one an individual expression of our central values of Power, Beauty and Soul.

Why not let your aspirations off the leash with a test drive?Contact us for more information on our model range.

INTRODUCING THE ASTON MARTIN RANGE

WWW.ASTONMARTINOMAN.COM

Aston Martin Oman As Sarooj

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t: +(968) 24692625 f: +(968) 24692548

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2 April 2012

EDITORIAL

Editor-in-chiefHH Sayyid Tarik Bin Shabib

Group EditorMayank Singh

Assistant EditorVisvas Paul D Karra

DESIGN

Senior Art DirectorSandesh S. Rangnekar

Senior DesignerShameer Moideen

Senior PhotographerRajesh Burman

PhotographerBasim Al Maharbi

Cover conceptChanjeet Singh

Production ManagerGovindaraj Ramesh

MARKETING

Business HeadJacob George

Senior Advertising ManagerAvi Titus

Advertising ManagerArif Abdul Bari

CORPORATE

Chief ExecutiveSandeep Sehgal

Executive Vice PresidentAlpana Roy

Senior Business Support ExecutiveRadha Kumar

DistributionUnited Media Services LLC

OER PRESENTATION

Supplement on Bank Sohar

Published byUnited Press & Publishing LLCPO Box 3305, Ruwi, Postal Code - 112Muscat, Sultanate of OmanTel: (968) 24700896, Fax: (968) 24707939Email: publish@umsoman.comWebsite: www.umsoman.com

All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content.

Copyright © 2012 United Press & Publishing LLCPrinted by Oman Printers

Correspondence should be sent to:Oman Economic ReviewUnited Media ServicesPO Box 3305, Ruwi 112, Sultanate of OmanFax: (968)24707939Email: editor@oeronline.comWebsite: www.oeronline.com

Raise a toast The letter ‘D’ connoting downgrade became the bugbear of banks and bankers around the world in 2011. The big three global rating agencies were on a tear downgrading banks in Europe, US and Asia. Standard & Poor’s (S&P), lowered the ratings of close to a dozen Spanish financial institutions including the country’s two biggest banks – Banco Santander and Banco Bilbao Vizcaya Argentaria. Moody’s downgraded Russia’s banking system from stable to negative and the long term ratings of Bank of America were brought down two notches. Fitch Ratings painted a negative outlook on Italy’s five largest banks. The world’s largest bank in terms of assets, the France based BNP Paribas also saw its ratings being cut by a notch.

Countrys fared no better with the S&P downgrading the US economy from its prized AAA status to AA+. The Italian government’s debt rating was cut from A+/A-1+ to A/A-1. Spain, Ireland, Greece, Portugal and Cyprus were the other countries with a credit rating downgrade.

Compared to this, Oman was an oasis of stability and calm. Driven by higher oil revenue and prudent macro-economic policies adopted by the government, the domestic economic scenario witnessed considerable improvement in 2011. Higher than forecasted oil revenue resulted in a budget surplus for the year despite an increase in government spending. Inflation has remained at acceptable levels and IMF forecasts inflation to moderate to 3.3 per cent in 2012.

The banking industry in the Sultanate rode this crest and came up with a consistent performance. Most of the banks reported positive numbers in 2011 and the OER-GBCM Best Banks survey underscores this point. Our cover story package profiles the seven local banks, foreign banks, Bank Nizwa -- the first Islamic Bank in the country and NBFCs. Read it to get a comprehensive view of the sector along with the winners of this year’s ranking.

To read, click on link at: www.oeronline.com

No 141April 2012

EDITOR’SDESK

Our values are as deep-rooted in Omani tradition as our name. Our every action, at its heart, is guided by the Islamic principles of integrity, transparency, empathy, prudence, and ethical conduct.

But that’s not the only way we will redefine the way you bank…

As a business, we are driven by progressive thinking. We will surprise our customers with new and useful experiences in all aspects of banking. We will discover their expectations, anticipate their needs and offer solutions– even before they realise it.

As an employer, we thrive on mutual respect. Our people will be empowered to bring out the best in themselves as professionals and as individuals. They will be encouraged to become active, productive and valued partners in the business, and in their communities.

As a corporate citizen, our actions will speak louder than words. We will strive to earn the reputation of being a responsible, respectable and engaged member of Omani society.

Soon, we will invite you home.

Don’t justwelcome change.Let’s redefine it.

We are Bank Nizwa,Oman's first Islamic bank.

www.banknizwa.om

4 April 2012

MICE IS RIGHTYour incisive cover story ‘Welcome to an emerging MICE destination’ has brought into sharp focus Oman’s prospects as an exciting Meetings Incentive Conference and Events destination. The Sultanate witnesses strong growth in MICE business with government’s decision to build a 6000+ seat convention and exhibition centre in Muscat, due for completion in 2013. The centre will provide state-of-the-art facilities and make Oman a competitive venue for major global and regional events. The facility will complement the MICE capability of our leading hotels and resorts, and act as a ‘springboard’ for break-out groups and excursions to experience

PUBLICATION

OER has published a special edition to mark Oman LNG’s 10 glorious years of service to the nation. The special issue of Oman LNG, the Sultanate’s gas giant, was unveiled recently before an august gathering of the company’s stakeholders by HE Dr Mohammed bin Hamad Al Rumhy, Minister of Oil & Gas and Chairman of Oman LNG in the presence of Dr Brian Buckley, general manager & CEO of Oman LNG; and Mayank Singh, group editor of OER at Hotel Intercontinental. The book chronicles the major achievements of Oman LNG with special emphasis on its contributions to the Sultanate’s economic development as the largest revenue contributor after oil to the national GDP.

Packed with a number of analytical articles on various aspects of Oman LNG’s operation and its massive social investments programmes, interviews and congratulatory messages, the special edition is a tribute to the company’s one decade of excellence in operations. The magazine gives insights into how Liquefied Natural Gas (LNG) has emerged as the game changer for Oman and how Oman LNG has cashed in on it to maximise its potentials

HE RUMHY UNVEILS OER SPECIAL EDITION ON OMAN LNG

for Oman’s sustainable economic development.

As a souvenir of Oman LNG’s 10 years of successful operations and its contributions to Oman’s economic diversification, the OER special reviews the company’s pioneering role in metamorphosing the role of gas in the Sultanate from being an unwanted byproduct of oil drilling to the most

wanted commodity to drive the country’s growth plans. In addition to chronicling the genesis and evolution of Oman LNG, the special edition also highlights the company’s significant contributions to the social development in Oman, playing a significant role in empowering communities, championing innovation, investing in people and preserving Oman’s nature, biodiversity, culture and heritage.

Write to us with your comments/feedback at: editor@oeronline.com

Oman’s diverse regional landscapes and culture. A combination of great facilities, services and powerful experiences will ensure meetings are successful and that our visitors will return home with great respect to Oman. The year 2012 started on an optimistic note for the tourism industry with celebrations marking Muscat’s declaration as Arab Tourism Capital 2012. The government has drafted a comprehensive tourism plan for the whole year to make Oman a year-round destination.

Anil Prakash, Watayyah

MAIL

6 April 2012

INSIDE

22IN THE NEWS

HERALDING A NEW ERA OF BANKINGBank Nizwa, Oman’s first dedicated Islamic bank, will offer an entire portfolio of commercial banking services

37COVER STORY

A robust showing

26OIL & GAS

HOME-GROWN WINNERS

Petroleum Development Oman (PDO) launched its

In-Country Value (ICV) proposition to develop local

suppliers and manufacturers

24IN THE NEWS

SPURRING SUSTAINABLE DEVELOPMENTBy creating a ‘virtual iron ore mine’, global mining giant Vale has achieved full production capacity of 9 million metric tonnes per year

34EVENTS

‘NEED FOR A NATIONAL TALENT

DEVELOPMENT PLAN’

Oman needs a National Talent Development Plan

which will align all associated investments towards

achieving the national strategic objectives

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INSIDE

94AUTOMOTIVE

HEALTHY CAR SALES = HEALTHY ECONOMY

Editorial 2

Publication 4

Economy Watch 10

Business Briefs 12

Executive Movements 18

Periscope 30

Events 34

Education 92

Close up 96

Autonews 98

Environment 100

Billboard 102

Market Watch 104

Gizmos 105

Browsing Corner 107CARTOON CORNER

By Kannan Murali

106GOLF UPDATE

AT THE HELM Luke Donald

82COMPANY PROFILE

BRINGING DOG TRAINING TO A NEW LEVELCanadian Jebel, Oman’s first full-fledged, registered dog training services centre, offers a wide range of canine services from basic obedience to intermediate and advanced levels of training

88PERSONALITY

A METICULOUS APPROACH

HE Sayyid Khalid Al Busaidy, Chairman, Al-Nab’a Holding,

shares his inspirations, management style and

reasons for his company’s success

84MEDIA

IN A LEAGUE OF ITS OWN A mix of unique programmes, partnering community based social initiatives and creating innovative solutions for advertisers has helped Al Wisal and Merge FM to establish their leadership in the Sultanate’s market

90HR

CHANGE THE MINDSET

Oman like any other country needs to review its education

system in line with a clear vision as to what skill sets

would we need for the next 20 to 30 years

ECONOMYWATCH

Oil and asset returnRising oil prices have recently begun to replace EU periphery concerns as a primary risk for many investors. While the recent rally in Brent crude to $125/bbl can so far be mostly explained by central bank liquidity, rising tensions in the Middle East could easily add another $20 to $40/bbl to oil prices. In short, oil could rally further from here for three reasons: 1) continued steady appreciation of oil prices in response to excess global liquidity; 2) demanddriven appreciation caused by an unexpected acceleration in global growth; or 3) a genuine supply-side shock caused by Middle East tension. Oil prices

may also appreciate in response to rising demand. If oil was to rally due to a more sustained global growth spurt, rising prices may hurt large oil importers like S. Korea, Turkey, India or the EU periphery. However, the impact may not be as negative for risky assets for two reasons. First, if nominal global GDP in USD rises faster than expected, then the capacity to absorb higher nominal oil prices is greater. Second, if an unexpected rise in productivity drives up demand for oil, the world may be able to spend a greater share of GDP in energy. In this case, equities, high yield and other growth linked assets should outperform.

April 201210

Source: Bloomberg, BofA Merrill Lynch Global Research Source: Bloomberg, BofA Merrill Lynch Global Commodities Research

Brent prices in various currencies

20

40

60

80

100

120

Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12

TRL

GBP

EUR

USD

CNY

JPY

Index (100 at 2008 high) Current Brent oil price in local currencies (% above previous pre-2012 peak)

-40% -30% -20% -10% 0% 10%

Japan (JPY)Australia (AUD)

China (CNY)Canada (CAD)

South Africa (ZAR)Indonesia (IDR)

USDSaudi ArabiaBrazil (BRL)South Korea

India (INR)Eurozone (EUR)

Britain (GBP)Russia (RUB)Mexico (MXN)Turkey (TRL)

Argentina (ARS)

Recent liquidity injections by central banks across the world have pushed oil prices to record levels in EUR, GBP, TRL, MXN, RUB

Source: IMF, IEA, BP, Bloomberg, BofA Merrill Lynch Global Commodities Research Source: IMF, IEA, BP, Bloomberg, BofA Merrill Lynch Global Commodities Research

Energy prices are already close to 9 of global GDP, suggesting further price increases could soon hurt economic growth

0%1%2%3%4%5%6%7%8%9%

10%

65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11

Primary energy to nominal GDP ratio - WorldCurrent Brent spot prices for 2012

Oil Gas Coal Nuclear Hydro

Oil is already capturing a higher level of European GDP than in 2008 due to the record levels in EUR/bbl and the 2009 recession

Europe oil as a share of GDP versus prices

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

90 92 94 96 98 00 02 04 06 08 10 120102030405060708090100

Eurozone oil as a share of GDP Brent, EUR (rhs)

Oil as a share of GDP EUR/bbi

12

BUSINESS BRIEFS

April 2012

E&Y ANNOUNCES ENTREPRENEUR AWARDS

OCEC makes debut at GIBTM

The Oman Convention & Exhibition Centre (OCEC) made its debut at GIBTM, the Gulf’s premier meetings industry tradeshow held in Abu Dhabi recently. GIBTM showcased the venue to key international and Gulf region decision makers. The OCEC was featured on the Oman Ministry of Tourism stand E110.

NDC’s sales revenue up by 14

The National Detergent Company (NDC) registered sales revenue of RO20.53mn in 2011 in comparison to RO18.02mn in 2010, thereby registering a growth of over 14 per cent. The company’s profit from operation for 2011 was RO1.21mn in comparison to RO1.74mn in 2010. Profit before tax for 2011 was RO1.10mn in comparison to RO1.66mn in 2010.

Omantel opens outletat Grand Mall

Omantel has opened a new outlet at the recently inaugurated Muscat Grand Mall to bring all its telecom services closer to its customers. This is the first outlet in the Grand Mall to provide telecom services including fixed line, mobile and internet services and automatic bill payment machines to mall visitors.

Gulf Air’s People Development Report

Bahrian’s national carrier Gulf Air has released its People Development Report for 2011, detailing the extensive learning and development programmes provided to its workforce across all departments. The programme included several workshops, seminars and training programmes in aviation.

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Dr Mohammed Al Barwani of MB Petroleum won Ernst & Young’s Entrepreneur of the Year Awards, Oman 2012 which was announced recently at a special ceremony at Ritz Carlton Hotel, Al Bustan Palace. Dr Barwani will now have the privilege of representing Oman at the World Entrepreneur of The Year at Monte Carlo in June 2012. Speaking at a press conference after the ceremony, Dr Barwani said, “I am honoured to win such a prestigious award, and look forward to representing the Sultanate in the global competition. It will be fascinating to meet and interact with fellow entrepreneurs from all over the world.” In addition to the global competition, Ernst & Young had also conducted a local competition for the Emerging Entrepreneur of the Year. The winner in this category was Abdulla Ahmad Sulaiman Al Hadi of Gulf Mining Materials Co.The winners were selected by an independent panel of judges. The criteria on which the selection was based was entrepreneurial spirit, financial performance, service to the local community and international arena as well as personal integrity and influence.

The Environment Society of Oman (ESO) led a nationwide campaign to reduce electricity and water consumption as the Sultanate marked global ‘Earth Hour 2012’ recently. The campaign was aimed at saving 50,000kw of power by “switching off” during the global Earth Hour from 8.30 pm to 9.30 pm on March 31. The ESO encouraged individuals, families, businesses and the government to switch off what they can for an hour to save electricity. Companies and institutions switched off non-essential lighting during the hour. Oman participated in the event for the second time, after ESO led the campaign in 2011, which saved an estimated 20,000kw of electricity. The campaign, sponsored by Sohar Aluminium, Towell Engineering, NBO, PDO, Muscat Pharmacy and Omran, included art and energy saving contests in schools.

Al Hassan Engineering has completed recently 50 million man-hours without any lost time injury (LTI) since 18 July 2007. To commemorate this achievement, Al Hassan Group celebrated ‘Safety Week’ with five-days of seminars, speeches, quiz, team competitions and mock safety drills. The weeklong celebration saw 5000+ employees actively participating with the objective of creating awareness among all the employees on various aspects of safety. The inauguration ceremony was held at Wadi Kabir head office of Al Hassan Group. The ribbon-cutting was done by Maqbool Ali Salman, managing director. The Safety Week concluded at Ghala fabrication/plant workshop with a speech given by Al Hassan Group chairman, Hassan bin Ali Salman and the distribution of prizes for the best project stalls, drivers, toolkits and other competitions.

ESO LEADS OMAN IN OBSERVING ‘EARTH HOUR’

AL HASSAN COMPLETES 50MN SAFE MAN-HOURS

14

BUSINESS BRIEFS

April 2012

Nawras marked its seventh anniversary by offering every customer 700 elite points as well as sharing an enormous celebratory cake with surprised visitors to the Muscat Grand Mall. Led by Nawras CEO, Ross Cormack, Nawras family members joined media representatives, invited guests and passersby to celebrate the occasion.

Addressing the assembled crowd, Ross Cormack says, “The last seven years have been a remarkable journey and our fantastic achievements have largely been possible thanks to the great people that Nawras attracts. We would like to say a big thank you to our valued customers and to our partners, dealers, media friends and shareholders. I would also like to thank the more than 1000 members of the Nawras family who care for our customers all over this beautiful country.” As a token of thanks, Nawras Mousbak prepaid elite customers received 700 anniversary Elite points when they recharged with a minimum of RO1 from March 18 to 21. Nawras has been at the forefront of many other innovations such as the recently launched International Credit Transfer service which makes it possible for Nawras Mousbak customers to send credit directly to almost any prepaid mobile phone account in India, Bangladesh, Egypt, Pakistan and the Philippines.

OMAN RANKED 16TH IN UN E-PARTICIPATION INDEX

Oman is ranked 16th internationally on the UN e-participation index, as a token of approval for the rapid progress it made in information communication technology. The UN e-participation index is indicative of governments’ readiness to create an environment for citizens to be more active and supportive of their governments thorough information technology. There is also good improvement in online citizen and business services indices, which show that the policies of Omani government and the Information Technology Authority (ITA) are yielding results. Oman is also ranked 35 for e-services in 2011 year compared to 55 in the 2010 report. Similarly, Oman has improved its overall ranking on the UN e-government development index, moving from 82nd position in the 2010 position to 64th. Oman was listed out of a total of 25 member states that offer separate m-government sites

Nawras sings $149mn funding deal

Omani Qatari Telecommunications Company (Nawras), announced the signing of a new funding deal worth $149mn. With five-year tenure, the consortium for the refinancing facility consists of BankMuscat, DBS Bank, Qatar National Bank (Doha and Muscat), and The Bank of Tokyo-Mitsubishi UFJ.

Mazoon holds workshop

Mazoon Electricity organized a workshop on occupational health and safety in collaboration with Precept Management Consultancy exclusively for its management team. The one-day workshop aimed to reinforce the importance of strategic health and safety management by establishing a unified work culture.

Meethaq wins Islamic Banking News award

BankMuscat’s Meethaq Islamic Banking operations, subject to approval from the Central Bank of Oman, won the Best in Oman award from Islamic Finance News. Sulaiman Al Harthy, group general manager - Meethaq Islamic Banking, received the award at the ceremony in Dubai.

Indian embassy celebrates ITEC Day

The Embassy of India, Muscat, hosted a dinner to celebrate ‘ITEC Day’ with very enthusiastic participation of alumni from Oman. HE Mohsin Khamis Al Balushi, advisor, Ministry of Commerce & Industry, Sultanate of Oman, graced the occasion as the chief guest.

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NAWRAS CELEBRATES 7TH ANNIVERSARY

WORKSHOP FOR DISABLED CHILDREN

The Bait al Zubair Foundation has formally signed an agreement with the Ministry of Social Development to build a new workshop in Al Khoud that will manufacture mobility aids to help disabled children in Oman. The Minister of Social Development, HE Sheikh Mohammad bin Said Al Kalbani and the chairman of The Zubair Corporation Rashad M Al Zubair signed the agreement at an event. The ceremony marked the beginning of the construction of the workshop following a highly successful fund raising campaign launched by the Bait Al Zubair Foundation called the “Children of Oman” that has encouraged leading corporate organisations across the Sultanate to join together to donate funds towards this exceptional project. When the campaign was launched, a fundraising gala dinner initially raised RO104,000 that was matched by the Bait Al Zubair Foundation to RO 208,000 to kick start the fundraising effort.

16

BUSINESS BRIEFS

April 2012

Abu Dhabi, Shanghai brought closer

Etihad Airways has commenced scheduled flights between its hub in Abu Dhabi and Shanghai, China.The airline will initially operate five weekly Airbus A330-300 services to Shanghai’s main international airport with commitments to a daily schedule from April 15. Etihad will be the first non-stop flight between Abu Dhabi and Shanghai.

Aster wins customer service excellence award

Aster Hospital bagged Oman Customer Service Excellence Award 2012 in healthcare sector instituted by Oman International Trade and Exhibition (OITE) Conferences. The award was handed over at a ceremony recently at the Grand Hyatt, Muscat. The criteria included exceeding customer expectations, innovations, best practices etc.

Omanoil named MENA distributor of Castrol

Oman Oil Marketing Company (Omanoil) was named ‘Ambassador Distributor’ for the Middle East & North Africa by Castrol in recognition of its outstanding performance in the region’s energy business. The company was selected among competitive global distributors for continually applying best-in-class practices and inspiring new industry standards.

Oman Reinsurance to attend seminar in Thailand

Asia Insurance Review in conjunction with Singapore Re will host a dedicated seminar in Bangkok on ‘critical lessons from the Thai floods’. Two representatives from Oman Reinsurance Co. (Mohamed Mostafa, senior underwriter and Ibrahim Al Azri, assistant underwriter) will attend the seminar.

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The National Hotels Co has signed a memorandum of understanding with UAE based Tawasel International Trading Company to run Sheraton Hotel Oman, which is currently being refurbished to match and offer international luxury standards. The agreement was signed by Sheikh Nasser Mohammed Al Hasher and Sheikh Hamed Al Hamed from the respective organisations. Sheraton Hotel and Resort is owned by National Hotels Company, part of Al Hashar Group. “The re-opening of Sheraton Hotel Oman will be a step in the right direction towards joining hands with the Sultanate in progressing as a preferred holiday destination,” says Sheikh Nasser Mohammed Al Hasher, chairman of

the Al Hashar Group of Companies. Tawasel brings hands on experience in running Sheraton chain, Rocco Forte chain and Crown Plaza hotels and resorts in the MENA region.

Haya Water has received international recognition for having a competent testing laboratory for water and wastewater after achieving ISO/IEC 17025 accreditation from the Dubai Accreditation Center (DAC). The ISO 17025 certificate is the internationally recognised standard that is applied to testing and calibration laboratories all over the world and reinforces the reputation of Haya Water as a company developing a world class water reuse project.

PH Petro, an integrated enhanced oil recovery (EOR) company, has announced that the company’s recently completed single-well test project for Oman’s Daleel Petroleum Company has delivered an impressive 134 per cent incremental oil gain. The project marks the debut of SUR+ (Surfactant Plus) in the Middle East and PH Petro’s first foray into the Arab markets. PH Petro undertakes EOR projects in South East Asia from concept to completion and SUR+ has been field tested in more than 18 fields and 50 wells.

HAYA’S LAB GETS ISO CERTIFICATION

DALEEL PILOT DELIVERS INCREMENTAL OIL GAIN

BBK, Bahrain’s pioneer in commercial banking, has recently arranged and underwritten term loan and working in retail capital facilities for W J Towell Group. The agreement for these credit facilities was recently signed at a ceremony at W J Towell’s head office in Muscat. “We are very pleased to be providing significant credit facilities to W J Towell, one of the leading Omani business groups,” says Abdulkarim Bucheery, BBK’s CE. “They are a long-established and well-diversified group who have expanded as Oman has grown.” Hussain Jawad, chairman, W J Towell & Co opines his company is delighted to have reached agreement with a highly respected regional bank like BBK.

BBK, W J TOWELL SIGN LOAN FACILITY

TAWASEL TO RUN SHERATON HOTEL

11375SCB_TimeMag_Hat_267x200wOL.ai 4/7/11 7:31:17 PM

BUSINESS BRIEFS

April 2012

In recognition of significant contributions to the banking sector in Oman and the GCC region, AbdulRazak Ali Issa, chief executive of BankMuscat, was conferred with an honorary doctorate by Hindustan University at Chennai, in the southern Indian state of Tamil Nadu. AbdulRazak received the honorary PhD at the second convocation of Hindustan University in

which he presided as the guest of honour. “I owe this achievement to the valuable opportunities made available to Omanis by His Majesty Sultan Qaboos,” says AbdulRazak. “BankMuscat is a Renaissance achievement of the Sultanate under the leadership of His Majesty Sultan Qaboos and I am proud to have been associated with the bank in its quest to emerge as the leading financial services provider in the Sultanate”. AbdulRazak, who has over 35 years of experience in the banking sector, assumed the role of chief executive of BankMuscat in 1994. A highly respected figure in the nation’s financial sector, AbdulRazak continues to lead BankMuscat from strength to strength.

Shell opens two new stations

Shell Oman Marketing Company opened new stations in West Hambar near Sohar and Batain near Ibri. The West Hambar station was opened by HE Khatim Al Ajmi, Shura Council member in the presence of Adil Bin Ismail Al Raisi, Shell Oman Managing Director. The Batain- Ibri station was opened by the deputy Wali of Ibri.

BankMuscat AGM approves 40 per cent dividend

BankMuscat shareholders approved 40 per cent dividend, 25 per cent in the form of cash and 15 per cent in the form of bonus shares, at the 2011 Annual General Meeting (AGM) held at the bank’s headquarters. The bank achieved a net profit of RO117.5mn in 2011 with an increase of 15.6 per cent.

Bank Sohar wins Pan Arab Web Awards

For the third consecutive year, Bank Sohar’s website has won awards at the regional level 2011 Banking Web Awards Competition organised by the Pan Arab Web Awards. The bank won three awards: Best Interactivity award for commercial and corporate banks, Best Structure award in retail banks and in the private and investment banks category.

Multipurpose equipment for food service

Al Naba Equipment and Supplies, has unveiled in Oman the Belgian-made Beldos Mini-Fill Touch, an ingenious device that enables chefs, caterers, bakeries and other food service professionals to dispense fillings and servings precisely, speedily and efficiently. Mini-Fill Touch is an innovative piece of equipment with potentially enormous application in the local catering and food service industry.

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BankDhofar has announced that it will soon open a unique new centre in Salalah which will house a number of specialised banking services. These will include a Hawa ladies banking unit with a separate entrance for female customers and a priority banking unit for Al Riadah customers. It will also operate as a standard branch unit, offering customers a wide range of products and services. “The new centre in Salalah will offer a wide array of specialised banking services for our customers. It will operate as a one-stop financial centre responding to the needs of our female customers, our priority Al Riadah customers as well as our general customers. It will play a pivotal role in showcasing our commitment to the varied needs of our customers,” says Faisal bin Hamad Al Wahaibi, AGM, Retail Banking.

Zahrat Al Khareef - Dhofar, the luxury housing project in Salalah, developed by Iskan Oman Investment Company, sets new standards for smart living. Completed well within the targeted project completion date, the complex promotes positive community living, offering the convenience of lifestyle, location, space and leisure. Changing the skyline of the region, it reflects the very essence of Salalah, launching a trend where modern living blends with the natural environment. This much sought-after destination is also fast becoming a smart realty investment option for homebuyers from across Oman and the GCC. Offering excellent investment potential from both rental and capital appreciation perspective, Zahrat Al Kahreef - Dhofar also offers the opportunity for visitors and residents of Salalah alike to have their own special home in this rapidly expanding and important city.

BANKMUSCAT CEO CONFERRED WITH DOCTORATE

ZAHRAT AL KHAREEF READY FOR ACTION

BANKDHOFAR TO OPEN NEW CENTRE IN SALALAH

18

EXECUTIVE MOVEMENTS

April 2012

Mazoon Electricity Company has appointed Zahir bin Abdullah Al Abri as its general manager. The re-assignment stems from the company’s vision to create a seamless exchange of knowledge and managerial expertise between the electricity companies in light of the continuous development in the sector. Al Abri began his career at the former Ministry of Housing, Electricity and Water, and ascended the corporate ladder to hold a number of managerial positions within the electricity sector including deputy CEO of the Electricity Holding Company

and general manager of Muscat Electricity Distribution Company. Al Abri’s extensive and varied experiences have considerably refined his capacity to bolster the Sultanate’s electricity supply and distribution industry in his new position.

Nokia has announced the appointment of Vithesh Reddy as its new general manager for the Lower Gulf region. Reddy, who brings to the role more than seven years of experience of the Nokia brand, will be responsible for the development of Nokia’s business operations in the UAE, Kuwait, Qatar, Oman and Bahrain. In this role Reddy will utilise his vast sector experience and regional knowledge to lead Nokia’s growth throughout the region. Prior to his appointment as general manager, Reddy was head of sales for Nokia Lower Gulf, a role in which he excelled in driving sales across the

region. He has also held various sales management roles in Nigeria and South Africa.

“These are very exciting times for Nokia in the region, and indeed the mobile communications sector as a whole,” says Reddy. “As a brand, Nokia has entered a new chapter in its evolution, one that is defined by an ongoing commitment to innovation. As such it’s an exciting time to be appointed general manager and to be part of driving the brand on to even bigger and better achievements in the region.”

Dollar Rent A Car in Oman has appointed Ashraf Jallad as manager. The appointment comes at a time when the company is preparing to maximise its business in Oman in 2012. Dollar Oman’s business development plans include adding two outlets in prime locations in Muscat, including the Muscat International Airport.

The car rental company has also upgraded its fleet to 2012 models and aims to increase its fleet

size by 18 per cent.

“I am very excited to join Dollar Rent A Car at a crucial time when delivering results in a timely manner is essential to capture the fast growing business of the tourism industry in Oman,” says Jallad about his appointment. “We have aligned our plans alongside the government’s activities to promote tourism in Muscat for 2012 and expect to build a sustainable client base of leisure and business tourists.”

Jallad brings over 17 years of experience in the Middle East car rental business and will be responsible for driving sales and overseeing the operations in Oman.

Bank Nizwa has appointed Tariq Al Farsi as general manager for retail and private banking. He has a successful and distinguished track record of building and running Islamic banks and brings more than 11 years of experience in investment, retail and corporate banking in various multi-national and regional financial institutions. Tariq was a senior member of the pioneering teams behind the start-up of two Islamic banks: Noor Islamic Bank and Al Hilal. He has joined Bank Nizwa from Dubai Bank where he held various high level executive positions including senior vice president, head of branches and head of business development - retail and corporate banking. Prior to this he was a general manager in Noor Investment Group and was also a senior team member of Sharjah Islamic Bank, RAK Bank and HSBC.

“Being an Omani, it gives me immense pleasure to be part of something this big;

launching the first Islamic bank for the Sultanate of Oman,” Tariq says. “Our team will go down in history as being the pioneers of the first Islamic bank in Oman. Until now, I’ve been pursuing my career in Islamic banking elsewhere in the region but with the establishment of Bank Nizwa, it’s a dream come true. I will be working in a country where my heart is.”

Tariq holds a BA in Management from AAST University in Alexandria and various certifications in islamic banking, finance and audit. He has completed a wide range of international professional development courses and is a member of UAE human rights organisation, an alumnus of the HH Sheikh Mohammad bin Rashid Leadership Programme (affiliated with Kennedy School of Government - Harvard University), an alumnus of INSEAD, and is a member of the panel on SMEs for Mohammed bin Rashid Al Maktoum Foundation.

Whatever your view, make it count.Be a part of Oman Forum, the first truly broad-based discussion on

‘Building National Talent’.

The forum will bring together all key stakeholders - including

decision-makers from the public and private sectors, HR professionals,

leading academics, representatives of workers’ unions and student

bodies. Over two distinct sessions they will deliberate on the progress,

shortfalls and possibilities that can lead to a long-term strategy for

meaningful Omanisation.

Omanisation isa collective responsibility

an HR opportunity

Reserve your place at Oman Forum 2012... and have your say.Call Rekha on 99269147 or email rekha@umsoman.com

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Strategic Partners

In association with

Ministry of Civil Services The Research Council

بناء الكفاءات الوطنيةBuilding National Talent

An initiative by

Date: 17 April 2012 I Time: 9.00 am - 1.00 pm

Venue: Al Bustan Palace Ritz-Carlton

For partnership enquiries please call Ahmed on 99356490 or email ahmed.sayed@umsoman.com

Knowledge PartnerAssociate Partners Media Partners

22 April 2012

Bank Nizwa has recently launched its brand-mark moving towards the establishment of the first

Islamic bank within the country. The bank will be Oman’s first dedicated Islamic bank, and all products and services offered will be Shari’a-compliant. Bank Nizwa will eventually offer an entire portfolio of commercial banking services, in accordance with the license to be issued by the Central Bank of Oman (CBO) and the Banking Law promulgated by the Royal Decree No. 114/2000. Further, the CBO will soon be issuing an Islamic Banking Regulatory Framework (IBRF) for Oman and Bank Nizwa will operate in accordance with this IBRF once it comes into force.

The formation of Bank Nizwa came about with the CBO granting its initial approval to the licensing of the bank to Sheikh Saud bin Ali Al Khalili. Sheikh Saud along with 91 other founder

shareholders appointed a founding committee to represent them, and to help manage the establishment of the bank as a licensed Shari’a-compliant commercial bank. The founding committee consists of five individuals including the chairman of the founding committee, Ahmed bin Saif Al-Rawahi. The founding committee of the bank, together with its appointed consultants, is undertaking the development of an operating model for the bank, the procurement of the IT infrastructure to support the bank’s products and back-office functions, and the creation of the internal polices and procedures required for the opening and operation of the bank. Key members of the senior management team have been identified and some of them were formally appointed. Bank Nizwa is also in the process of obtaining approval for setting up its head office and the first three branches to be located in Muscat , Nizwa and Sohar.

‘We have undertaken a detailed feasibility study for establishing the bank and have drawn up a business plan in conjunction with an internationally reputed consultancy firm. The study reveals that there is substantial unmet demand for Shari’a-compliant products in Oman. This together with the attractive economic fundamentals of Oman and the growth in the Omani banking market, highlights the growth opportunity for Bank Nizwa,’ said Ahmed Al-Rawahi.

The market for Islamic finance has grown rapidly over the last few years with the global value of Shari’a-compliant assets reaching an estimated value of $1tn in 2010. Customers across the globe have shown an increasing propensity to adopt Islamic banking as their preferred mode of financing as faith-based attitudes coupled with viable options from Islamic banking have reinforced greater adher-ence to Shari’a in economic matters.

Heralding a new

era of banking

Bank Nizwa, Oman’s first dedicated Islamic bank, will offer an entire portfolio of commercial banking services

IN THE NEWS

24 April 2012

IN THE NEWS

Vale achieved full production capacity of 9 million metric tonnes per year at its $1.36bn industrial complex in the

Port of Sohar. By creating a ‘virtual iron ore mine’, the global diversified mining company’s operations in the Sultanate will contribute to solidifying the country’s frontier market status and competitiveness in the global economy as a base for integrated steel production in the Middle East, North Africa and Asia. The company’s operations in Oman employ 1,200 people of which 450 are Vale’s direct employees and 750 are contractors working on site, with another 3,120 jobs generated indirectly. The company has achieved an Omanisation rate of more than 60 per cent amongst its direct employees.

Vale’s industrial complex comprises two pelletizing units, each with a nominal production capacity of 4.5 million metric tonnes of direct-reduction pellets per year, and a distribution centre with

a throughput capacity of 40 million metric tons per year. The company’s first production line commenced operations in April 2011, successfully supplying pellets to key steel producers in the region. To maximise its distribution centre capabilities, Vale partnered with Sohar Industrial Port Company to build a 1.4 kilometre deep-water terminal. This terminal is one of the first ports in the world to receive very large ore carriers (VLOCs) that boast a capacity of 400,000 tons and are responsible for transporting the world’s purest iron ore from Brazil to the shores of the Sultanate.

The pelletizing plant and distribution centre in Oman, together with a floating transfer station in Subic Bay in the Philippines, a distribution centre and port under construction in Malaysia and the VLOCs, are part of Vale’s strategy to increase its flexibility and competitiveness in serving the world’s fastest growing markets, on an equal

By creating a ‘virtual iron ore mine’, global mining giant Vale has achieved full production capacity of 9 million metric tonnes per year

Spurring sustainable development

footing with its closest competitors. “We have a solid commitment to Oman,” says Vale president & CEO, Murilo Ferreira. “We have joined forces with the government, the private sector and the community where we operate to catalyse sustainable development. At each stage, we ensure that our relationships with our partners are based on transparency, respect and trust.”

Vale has invested $40mn in technologies to reduce the project’s environmental impact, such as electrostatic precipitators and a 3,150 metre wind fence to control particulate matter emissions. The site also has a continuous emissions monitoring system and 100 per cent of the water used is recycled. To augment its highly efficient logistics system, Vale has signed an agreement with Oman Shipping Company to build four chartered ships exclusively for the company’s use. Two vessels are scheduled to become operational by mid 2012 while the other two by the end of 2012.

“Over the last 41 years, Oman has established itself as a unique development model amongst its neighbours,” says Marcos Beluco, Vale’s country manager. “His Majesty Sultan Qaboos bin Said’s Vision 2020 is based on self-sustained growth in a private sector-led and export-oriented economy. In line with this vision, we have created a virtual iron ore mine in the Sultanate that will support its steel intensive phase of economic development and serve the growing demand in the region.” Beluco explained that Vale was dedicated to realising the nation’s efforts to significantly reduce its dependence on oil by diversifying economic resources.

26 April 2012

OIL & GAS

HOME-GROWN

WINNERSPetroleum Development Oman (PDO) launched its In-Country Value (ICV) proposition to develop local suppliers and manufacturers. Raoul M Restucci, Managing Director speaks elaborately on the subject in this candid interview with Mayank Singh and Visvas Paul D Karra

Nowadays, all of a sudden people have started talking about In-Country Value (ICV). What does it mean for Petroleum Development Oman (PDO)?It starts with delivery of our vision which is all about being renowned and respected for the excellence of our people and all the value we bring to Oman and our stakeholders. It goes beyond the delivery of oil and gas and tries to contribute to whatever Oman seeks in value creation.

We are a large business in the oil and gas industry with a high level of activity across a broad spectrum, from well engineering through to construction and development in advanced EOR technologies. And increasingly, we see a lot of opportunities to ensure that these investment are placed locally in terms of services and goods that are made in Oman. We believe that we have the opportunity to further change the amount of local manufacturing capacity to support PDO and the oil and gas industry in Oman and also in many cases to set the standards for delivery of goods and services beyond the boundaries of Oman. Local delivery of goods and services also means immediate support and business continuity for urgent supply requirements, and specific solutions to meet our demands.

You already have Local Community Contractors (LCCs). Are they part of ICV?Prior to this interview, I had a meeting with an LCC company that has established a gasket manufacturing

business in Oman and is very much working and growing with PDO and other operators in the Sultanate. The partnership has led to support in training and in establishing required technical specifications. What is the incubation support needed to address an expansion or delivery of additional goods? There is so much equipment that we need, much of which continues to be sourced externally and the ICV strategy very much targets LCC support to address these manufacturing opportunities, in turn creating considerable direct and indirect economic value through logistics and other services. So it’s all about building on today’s platform and integrating our LCC relationships into a key enabler of the ICV strategy.

Can you elaborate more on the LCCs role in ICV?Well, it is literally about making sure that we can support and secure the services and goods of local manufacturers ranging from valves to pumps and tubulars that meet quality and technical specifications, in turn enabling them to secure the broader accreditation such that they can participate in the supply of these oil and gas industry goods at local and regional level.

Going into the definition of ICV, it means that whatever retained earnings we have in the country is being utilised for the priorities that the nation has set for itself. How does that translate into financial numbers?We have set ourselves some significant

pump and if another company has a different type of pump for similar duties then it becomes very difficult and cost inefficient for customers and suppliers alike, but if we can both standardise the equipment then there is an economy of scale which creates efficiencies and reduces local entry barriers. So the ICV effort is a blueprint for acting more strategically, more pan-industry and in a more impactful way than what we have done in the past.

Have you instituted this mechanism like a committee or a formal body to oversee this initiative?We are privileged to have HE Nasser Khamis Al Jashmi, Undersecretary, Ministry of Oil and Gas, to chair and head the ICV committee which includes senior officials from OPAL, various oil and gas companies in Oman, the

Ministry of Finance, the Ministry of Manpower, and other distinguished representatives to progress the ICV agenda. We are discussing what should be the big rules, what are the joint opportunities in training and ideas for the different local propositions. Work is also ongoing to develop a Made in Oman Index that looks at the level of spend, the level of Omanisation, but more importantly the upskilling of the Omani workforce at supervisory and management levels and contribution to domestic value creation.

Will ICV be a cost saving channel for PDO?It has to be a sustainable and competitive life-cycle value adding proposition. So in the short term, in some areas the incubational support will cost additional training, purchase

stakes in the ground. At the moment, if we take our capital investment, which is in excess of $4bn a year, about a third of that is spent in local service provision and local manufacturing. A relatively small amount pertains to locally manufactured goods, between 10 and 15 per cent, and approximately 45 per cent of all our services are delivered by local companies. Our goal is to dramatically increase this to approximately 50 per cent of our manufacturing requirements and in excess of 75 per cent in services, up to 90 per cent in some cases, across the entire oil and gas value chain by 2020. So in financial terms it equates to an annual increment of $100mn in manufacturing and $100mn in services, all targeted for local development. If we take the existing spend plus our annual targets, local spend will exceed $3bn by 2020, adding considerable value to the gross national product, on a direct and indirect basis.

A lot of stress is laid on manufacturing. Is that the way to create employment opportunities?The global learning is that employment creation is through a multitude of SMEs with relatively small teams of 5 to 20 employees growing in size over a period of time. SMEs are the economic and employment engines and our goal is to try to incubate and integrate as many entities as possible for long term sustainability. Our logistics challenge is significant. Every day, our staff and contractor community literally drive to the moon and back. So the ability to have local services, local entities that can help us operate across the value chain of oil and gas activities will increase local employment and significantly reduce the driving and logistical challenge we face; a clear win-win on many fronts.

PDO has all along been contributing to the community. Is ICV a continuation of that with a new name?ICV is just an evolution of PDO’s local content efforts in a more strategic pan-industry approach. So it entails also working with other operators to align the big rules and, for instance, some of the equipment and material technical specifications. If I have one type of

Raoul M Restucci, Managing Director, PDO

28 April 2012

of equipment, perhaps funding support for a number of activities; but in the longer term, we firmly believe that it is win-win for local community developers, PDO and other operators.

What kind of hand holding will you be providing to a small SME who want to get into your ICV?Let me give you an example of what we are doing for the super LCCs for instance. We have four of them, nominated by a ministerial committee and assigned to PDO at the moment – Al Shawamikh and Al Haditha in the north; and Al Baraka and Al Sahari in the south. We’ve ring fenced work for them from well hoist and slick line work to maintenance and pipeline replacement work. We seconded PDO specialists into each team, and trained or are in the process of training their company staff to deliver on project requirements, we secured the services of financial consultants that work with them to develop robust economic models and business plans and we’ve also ordered and purchased their equipment to the tune of approximately $35mn that allows them to basically kick-off with a running start.

A big drawback for startups is lack of funding. Are you going to put money upfront?Yes, for the super LCCs we’ve been able to find an economically viable solution and the question is to understand the requirements for other start-ups. We won’t be able to fund too many things and all will require a clear economic business case.

But what is the arrangement? Will you have a buy back facility?Over time, the ownership of the equipment we purchase will likely change but effectively early on, instead of charging the full capital depreciation, they will just charge us an operating fee, as they will be organised to operate that equipment. Therefore the total cost to PDO will not be disadvantaged as the cost of capital for us is obviously much lower and the synergy for purchases will be greater; again it should lead to a win-win situation for both parties.

But you run the risk of being straddled with a lot of start-ups which may or may not deliver…So far, our track record with the LCCs in A and B categories, with more than 150 registered companies, some 50 of which are very active, has been totally satisfactory. A vast majority of these companies have been very successful and have grown with us, some to very significant dimensions. With the super LCCs, we are equally putting in a lot of effort and I have no doubt they will succeed and it is in our interest that they do so.

When do you expect the first LCC or company from the incubator programme to begin delivering?At the moment, I don’t know. If we take the super LCCs, a lot of this equipment is due at the latter part of this year or early next year; so we expect them to become operational immediately thereafter. Presently, they are helping us in arranging and supporting sub-contracting entities. Much effort is going into training. We have monthly discussions with them on key timelines and milestones and so far it’s all progressing at a good pace.

What is the essential qualification for

anyone to become an LCC and get into your incubation programme?I guess the essential qualification is creation of value for Oman. You’ll obviously have to meet technical and quality specifications, HSE requirements and be commercially competitive. But if you have a proposition that creates value for Oman, then we are interested in talking to you.

How much job-creation will happen through ICV?When His Majesty Sultan Qaboos bin Said called for increased job creation, we set a target of 1,000 jobs per an-num for the foreseeable future. And I am privileged to say that together with the contracting community we delivered more than 4,300 jobs. For PDO, that’s just the start. I think you will see considerable efforts to train and develop a significant proportion of the Omani workforce ranging from school leavers to graduates. I believe we can make a difference. Today we have 420 students sponsored by PDO who are training and developing for the contracting community and more than 700 new staff developing for key opportunities within and out-side PDO, including 189 community scholars.

Building on our local content achievements for the past ten years or so, I am delighted that PDO has embarked in earnest on this exciting ICV journey. Nowadays, throughout the organisation, not only in contracting and procurement one can feel the buzz that ICV has generated. It would be naive for us to assume that it’s all worked out, however directionally we are clear and in the last six months we have achieved a lot including alignment across the oil and gas industry with regards to how we collectively want to deliver ICV.

We now have the full backing of the PDO board, our ICV policy has been published and we have a dedicated team to drive the ICV agenda. Our key challenges continue to be mindset change both internally and externally, where we all need to believe wholeheartedly that ICV makes business sense both for PDO and its suppliers. Opportunities exist across PDO’s entire portfolio, be it in well engineering,

project delivery etc. Having said that, there is ample evidence that PDO and its suppliers are rising to the challenge and I am confident that collectively we will deliver.

ICV has generated a buzz

OIL & GAS

Husam Al Jahdhami, Contracting & Procurement Manager

30 April 2012

PERISCOPE

The year 2012 has witnessed a spectacular rally in global equities, commodities and emerging markets. The Wall

Street S&P500 index is up by 25 per cent since October. Emerging markets like Brazil and Thailand have posted 35- 40 per cent returns. Now even the GCC stock markets have surged led by the near 30 per cent rally in Dubai’s DFM. However, I believe that the bulls now exhibit the sort of classic “irrational exuberance” that invariably ends in tears. The geopolitics of the Middle East alone threatens another oil shock that could be as devastating to the global economy as the October 1973 Middle East war and the 1990 Iraqi invasion of Kuwait. Gasoline in some American states is already $4 a gallon in a $15 trillion economy where consumption is two third of GDP and household net worth was gutted by the housing crash and two bear markets in the past decade.

The current bull run should be called the “Ben- Super Mario- Masaaki” bull market because it was ignited by Ben Bernanke of the Fed, Mario Draghi of the ECB and Masaaki Shirakawa of the Bank of Japan. Their epic, unorthodox monetary policies slashed interest rates and generated at least two trillion dollars in high powered money that has inflated asset values in the financial markets. The epicenter of the global bull market lies in the US. However, I see disturbing macro storm clouds for the S&P500 index above 1400. Operating margins (ex Apple) have fallen even in Silicon Valley, meaning a $7 hit on index

EPS is all too probable. The market cannot afford the luxury of earnings volatility now that American shares have doubled since March 2009 and the Chicago Volatility Index (VIX) has fallen to a mere 15. The stock markets is overvalued and overbought even as bond yields on Uncle Sam’s debt have begun to rise. Bullish advisory sentiment is now at 48 per cent, near 2008 highs. Geopolitics, Iran war risk, the reelection of President Obama and fiscal tightening by the Republican Congress are all negative for the indices.

Fading fastApart from central bank liquidity, the global markets have attracted inflows from fund managers overweight cash who were increasingly attracted by the unmistakable strength in US economic data. After all, the economy has created 1.2 million jobs in the past six months, the best performance since the housing/credit bubble era of early 2006. Auto sales have surged to an annual 15 million units. Even the monetary doves in the Bernanke Fed have acknowledged the resilience in the US economy, a major factor behind the spectacular bull run since October. Yet the economic rationale for the bull market is fading fast.

One, US ISM manufacturing, German factory orders, Premier Wen’s slashing of Chinese GDP growth estimates to 7.5 per cent, the ECB’s bleak forecast for Europe growth will lead to a U- turn in macro sentiment in the next three months. This will be a disaster for global investor sentiment.

The coming correction in global equities

There is a likelihood of disturbing macro storm

clouds for the S&P500 index above 1400

The author is a renowned investment banker based in Dubai

By Matein Khalid

32 April 2012

have led the current rally. There are a number of strategic trades that could make money for GCC investors if my macro scenario unfolds:

One, the two year US Treasury note yield cannot rise much above 40 basis points if the US economic data deteriorates. The Bernanke Fed will respond to weak data with stealth QE3. This means the two year T note yield can plunge. Two, take profits in GCC sukuk as credit spreads cannot compress when volatility and risk metrics in emerging markets rise. Avoid all unrated or deep junk sovereign debt. Reduce duration. Raise cash in GCC equities markets.

Three, as economic weakness will raise deflation risk, gold prices are headed lower. I would not be surprised to see gold trade as low as $1500 an ounce. Four, the Indian rupee is headed to the 53 – 54 range against the dollar.

The Congress losses in the state elections, no credible retail FDI or privatisation strategy, the impact of $125 Brent on the current account/fiscal discipline, wholesale inflation and the exodus of offshore funds from Dalal Street mean the Indian rupee will depreciate significantly in the next six months.

Five, now that the Greek bailout is over, the Swiss National Bank will become more aggressive in its monetary policies. This means the Euro/Swiss franc peg can well move from 1.20 to 1.26. The Swissie is also grossly overvalued against the dollar. I expect the Swiss franc to fall to 0.98 against the dollar and the Aussie to 1.02.

Six, the emerging markets index fund (symbol EEM) has risen from 34 in October 2011 to 44 now. Sell EEM at 44 for a 39 target. The easy money in EEM must now be banked.

Two, Europe is the world’s leading economic and trading bloc, the destination for 23 per cent of American exports, the source of trillion dollar daisy chains of cross border bank credit to Latin America, the Gulf, Southeast Asia. Europe faces not just a recession but a classic banking credit crunch that will gut the syndicated bank/offshore bond markets. The shock waves of the EU credit crunch will hit exports and corporate earnings from China to Brazil, from India to the GCC. The result? A wave of earnings downgrades that will devastate sentiment in the world’s stock markets this summer. This scenario is simply not priced into current market valuations in either the US or the emerging markets.

Three, offshore fund managers have slashed their cash holdings as they scrambled to accumulate equities. This is the most dangerous point in the equity cycle since any hint

of disappointment in earnings or economic data means the risk of significant sell offs.

Four, the Chinese just posted their biggest monthly trade deficit since 1989 (the year of the Tiananmen Square massacre, not exactly an export friendly event!) as the European debt woes hit the Middle Kingdom. The Chinese yuan forwards now suggest the end of hot money inflows. The PBOC will cut the banking system’s RRR at least thrice and slash interest rates. This will be a negative backdrop for the high beta energy, metals and industrial shares which

There are still a number of strategic trades that could make money for GCC investors

PERISCOPE

34 April 2012

Omar Ahmed Qatan, CEO, Oman Oil Marketing Company says Oman needs a National Talent Development Plan which will align all associated investments towards achieving the national strategic objectives. Qatan will take part as a panelist in Oman Forum – Building National Talent. Excerpts from an interview

‘Need for a National Talent Development Plan’What have been the key achievements of Oman in building national talent? Oman has shown an exemplary commitment towards the development of local talent at the highest level. The Sultanate has been developing institutional capacities in the education and academic systems. Substantial investments have been made in developing education/academic systems by improving the quality of the lecturers/teachers, infrastructure and syllabus. All these actions have been aimed at continuous alignment and compliance with the international standards. Knowledge transfer has been enabled through exposing national talent to experienced international expertise. The nationals have been provided development opportunities in all sectors to practice their skills and exhibit their talent by undertaking challenging projects, roles and responsibilities.

We have been quite successful in developing a balanced and supportive regulatory system that gives immense weightage to support the development of national talent in their career and professional training. The United Nations has also recognised Oman’s

achievement in the development of human capital.

What is your advice to the corporate leaders in maintaining a healthy balance between profit orientation and developing national talent? It’s always important to align the process of talents development with organisational objectives. Attracting passionate individuals and hiring them in their areas of specialty and interest makes that alignment more effective. In OOMCO, we have the higher education policy which entitles the staff to receive funding from the company to undertake a higher education course as long as the field of study is related to his/her work.

What kind of a role do you expect expatriates to play in Oman say post 2015 or so? Professional expatriates have played and will continue to play an important role in the knowledge transfer by sharing their international experience with the local talent. They have helped in developing Oman in various fields, and as the nation expand beyond its comfort zone we need to accelerate our learning curve through hiring

expatriates directly or engaging international firms, in order to make faster transition and maintain our competitiveness in the global market.

In which functional areas do you think there is a significant national talent gap? The gaps are more prominent in areas such as financial accounting, information technology and some branches of engineering where there is a heavy reliance on skilled expatriate labour. The supply of skilled national talent is not good enough to meet the high demand of the market.

What could be done to establish a sustainable and effective public-private partnership towards building national talent? The country needs a National Talent Development Plan -- a plan which can consolidate the initiatives of all stakeholders and align all associated investments towards achieving the national strategic objectives. This plan can only be achieved and brought to reality through the establishment of a body that overlooks and orchestrates the talent development process and reports to the highest authority in the country.

EVENTS

36 April 2012

EVENTS

Best performers to be felicitated in AIWA Awards

Experts to debate on building national talent

The stage is all set for the 2012 edition of AIWA Awards for Best Performing Companies. The nominees have been finalized after an intense scrutiny of their financial performance in 2011. AIWA Awards for Best Performing Companies are instituted by Alam al-Iktisaad Wal A’mal (AIWA), Oman’s leading Arabic monthly business magazine, published by United Media Services (UMS). This year marks the second edition of the AIWA Awards after the highly successful launch in 2011.

In a red carpet awards evening on 7 May, AIWA will felicitate the top performing listed companies in Oman during 2011. A networker’s dream, the event will be attended by the who’s who of Muscat’s corporate world. The premium event will attract more than 250 top business leaders, CEOs and senior government officials from a cross-section of industries, ministries and government bodies. It will witness the congregation of the key decision-makers who are

driving the country’s business and economy. A high-voltage entertainment show by renowned international troupes will make the attendees cherish the evening for a long time to come.

Overall 15 Top Ranking Companies will receive the coveted trophy. Based on the market capitalisation as at end of 2011, the listed companies in Muscat Securities Market (MSM) have been classified into three categories namely large-cap, mid-cap and small-cap companies. The AIWA Awards will be presented to the top five companies in each category taking into account the defined set of broader parameters including year on year (YoY) growth of

Revenue, Operating Profit (Earnings before Interest and Tax - EBIT), Net Profit, Return on Average Assets (RoAA), Return on Average Equity (RoAE), Operating Profit Margin (EBIT) and the Net Profit Margin (NPM) of the qualifying companies. In addition, AIWA will also felicitate two prominent Omani nationals who have done the nation proud by excelling in the fields of business and economy. The AIWA Awards to the selected personalities will be made in two categories – ‘AIWA Global Omani of the Year Award’ and ‘AIWA Life Time Achievement Award’. AIWA will also felicitate one company for its immense contribution to the society and economy. It will be presented with the trophy for ‘Excellence in Corporate Leadership’. Gulf Baader Capital Markets (GBCM) is the knowledge partner whereas KPMG is the validation partner for the ranking process used for the awards.

When we talk of the major tasks before the nation, the subject of Omanisation comes up as among the main priorities. However, when we speak to the industry leaders, they say the larges issue is building national talent. ‘If we could work on creating a better talent pool, the issue of Omanisation will be resolved automatically’. However, it is easier said than done. Keeping in mind the challenging task in hand, we need to first understand: What are the gaps in terms of talent demand and supply? What have been the reasons behind the talent shortage and how we could bridge the gap? What is going to be the contribution of the government, education system, training institutions, civil society, students and workers’ communities, business owners, top managers, HR practitioners, etc.? Most importantly, all these relevant stakeholders need to plan and work in conjunction.

That’s the objective of Oman Forum – Building National Talent, an initiative of Alam al-Iktisaad Wal A’mal (AIWA), Oman’s premier business magazine. Oman Forum – Building National Talent is a half day long event comprising two panel discussions on the state of education & training, youth employment policies & initiatives, identify talent gaps & challenges and create the guidelines to set up the road map for future. To be organised on 17 April this year in association with Petroleum Development Oman (PDO), OMAN FORUM – BUILDING NATIONAL TALENT has been supported by the Ministry of Higher Education, Ministry of Civil Services, Sultan Qaboos University and The Research Council (TRC). AhliBank, Voltamp, Galfar and Omran are the Strategic Partners whereas Omantel and Oman Cables Industry are the Associate Partners for the prestigious forum. . KPMG is the Knowledge Partner and Times of Oman and Al Shabiba are the Media Partners for the event. The venue for the event is Al Bustan Palace Ritz-Carlton.

For more details contact Ahmed on 99356490 or email ahmed.sayed@umsoman.com. For more information on Oman Forum – Building National Talent visit www.buildingnationaltalent.com

COVER STORY

38 April 2012

The OER-Gulf Baader Capital Markets survey of the Best Banks in Oman 2011 sees prudent and steady players doing well. The following pages present a comprehensive overview of the Sultanate’s banking sector

A robust showing

Ahli Bank has emerged as the No. 1 bank based on an all round performance of stronger growth along with better asset quality and productivity

The global finance industry may not be going through the best of times, but Oman’s banking sector has put up a

performance that can be summed up in one word – consistency. This finds a reflection in the OER-Gulf Baader Capital Markets Best Bank’s in Oman survey 2011.

Industry structure and performance The domestic economic scenario witnessed improvement in 2011, driven by higher oil revenue and prudent macro-economic policies adopted by the government. Higher than forecasted oil revenue is expected to result in budget surplus for the year despite an increase in government spending. Inflation has remained at acceptable levels and IMF forecasts inflation to moderate to 3.3 per cent in 2012.

It is also noteworthy that the domestic economy and the banking system were not adversely impacted by various regional and international events. The Central Bank of Oman (CBO) has expressed its satisfaction with the current position in its review of banking and monetary developments in 2011. Despite adverse international developments, the Omani banking sector continued to show optimism and resilience during 2011, consistent with the good performance of the real economy.

The banking industry in the Sultanate is mature, developed and highly competitive. There are seven local and ten foreign banks in the market creating both opportunities and challenges to achieve optimal performance. The economic and banking industry outlook for the

year 2012 is positive as a result of prudent macro-economic initiatives implemented by the government. The fiscal budget for 2012 has a strong emphasis on growth. Privatisation and infrastructure development are among major focuses to achieve economic growth and diversification.

The CBO continued to pursue an accommodative monetary policy during 2011 to support economic recovery. Consistent with sustained growth of the real economy, total assets of commercial banks jumped 17.5 per cent to RO18.4bn as of December 2011, from RO15.64bn for the corresponding period of 2010. Aggregate deposits of commercial banks, on a year-on-year basis, increased to RO12.6bn during 2011, from RO10.51bn in 2010. The credit growth also accelerated by 16.6 per cent to RO12.51bn as of December 2011 from RO10.72bn during the same period in the previous year.

Reflecting comfortable liquidity condition, both deposit and lending rates in Oman moved downward over the year. While the weighted average rial deposit rate fell from 1.85 per cent in September 2010 to 1.45 per cent in September 2011, the weighted average rial lending rate declined from 6.98 per

cent to 6.43 per cent during the same period. Commercial banks’ interest rate spread was under mild pressure as it fell from 5.14 per cent in September 2010 to 4.98 per cent in September 2011.

Signalling international confidence in the Omani banking sector, global credit rating agency Standard & Poor’s upgraded the Banking Industry Country Risk Assessment (BICRA) rating to group ‘4’ from group ‘5’ in November 2011. The rating agency also upgraded Oman’s economic risk score to ‘4’ from ‘6’ and assigned an industry score of ‘4.’ S&P’s BICRA analysis for a country is designed to evaluate and compare global banking systems on a scale from ‘1’ to ‘10,’ ranging from the lowest-risk banking system (Group 1) to the highest-risk banking systems (Group 10). After the upgrade, Oman stands with Brazil, Kuwait, Malaysia, South Africa and Taiwan in Group 4. In a statement on its website, S&P said, “Oman’s institutional framework is shaped by what we view as the regulator’s good track record, and adequate regulation and supervision, which are increasingly aligned with international standards.”

In a major development with important ramifications for the banking and financial sector, the Omani government gave its nod for the introduction of Islamic banking services in the Sultanate. Following Royal Order in this regard by His Majesty Sultan Qaboos bin Said in May 2011, the CBO issued a landmark circular (BM 1081) to all licensed banks operating in the Sultanate. The circular authorises the conduct of Islamic banking through exclusive Islamic banks and windows of existing licensed banks. The CBO has

COVER STORY

RATIOS

AHLIBANK BANK

DHOFAROAB

BANK MUSCAT

BANK SOHAR

NBO OIB

Gross Loan CAGR ('08-'11) 27.1% 13.8% 15.7% 9.0% 17.4% 5.8% 3.8%

Customer Deposits CAGR ('08-'11) 28.0% 16.1% 14.2% 14.4% 28.8% 6.0% 11.0%

Fee Income CAGR ('08-'11) 54.5% 5.5% 4.6% 5.1% 3.3% 2.5% -0.6%

Operating Profit CAGR ('08-'11) 54.6% 9.3% 4.6% 5.2% 52.3% -1.9% -12.0%

Networth CAGR ('08-'11) 11.4% 24.6% 13.4% 10.5% 10.1% 4.6% 0.0%

Net Profit CAGR ('08-'11) 45.4% -16.1% -1.9% 7.8% 285.7% -9.0% -17.6%

NPA/GL 4 year average 0.4% 4.2% 2.6% 3.6% 0.7% 4.3% 10.3%

Provision Coverage 4 year average 228.8% 120.5% 124.6% 117.3% 568.8% 101.5% 100.9%

Operating profit per branch (in RO)

4 year average 1,376.27 780.08 666.84 1,306.04 808.42 730.21 258.02

Operating profit per employee (in RO)

4 year average 59.56 42.81 35.00 61.46 29.87 37.75 21.59

NII/Avg Int. Bearing assets

4 year average 3.1% 3.9% 4.3% 3.6% 2.7% 3.4% 3.5%

Cost to Income 4 year average 37.4% 36.3% 39.5% 34.7% 54.6% 41.0% 46.6%

RoAA 4 year average 1.8% 1.7% 2.8% 1.4% 0.9% 1.7% 2.0%

RoAE 4 year average 11.9% 14.5% 19.2% 11.3% 9.3% 12.6% 12.5%

RANKS

AHLIBANK

BANKDHOFAR

OABBANK

MUSCAT BANK

SOHAR NBO OIB

Gross Loan CAGR ('08-'11) 1 4 3 5 2 6 7

Customer Deposits CAGR ('08-'11) 2 3 5 4 1 7 6

Fee Income CAGR ('08-'11) 1 2 4 3 5 6 7

Operating Profit CAGR ('08-'11) 1 3 5 4 2 6 7

Networth CAGR ('08-'11) 3 1 2 4 5 6 7

Net Profit CAGR ('08-'11) 2 6 4 3 1 5 7

NPA/GL 4 year average 1 5 3 4 2 6 7

Provision Coverage 4 year average 2 4 3 5 1 6 7

Operating profit per branch 4 year average 1 4 6 2 3 5 7

Operating profit per employee 4 year average 2 3 5 1 6 4 7

NII/Avg Int. Bearing assets 4 year average 6 2 1 3 7 5 4

Cost to Income 4 year average 3 2 4 1 7 5 6

RoAA 4 year average 3 5 1 6 7 4 2

RoAE 4 year average 5 2 1 6 7 3 4

TOTAL SCORE 4 year average 33 46 47 51 56 74 85

FINAL RANKING

1 2 3 4 5 6 7

40 April 2012

GROWTH

SUSTAINABILITY

AHLIBANK

BANK SOHAR

BANKDHOFAR

BANKMUSCAT

OAB NBO OIB

RANKING 1 2 3 4 5 6 7

Gross Loan CAGR ('08-'11) 1 2 4 5 3 6 7

Customer Deposits CAGR ('08-'11) 2 1 3 4 5 7 6

Fee Income CAGR ('08-'11) 1 5 2 3 4 6 7

Operating Profit CAGR ('08-'11) 1 2 3 4 5 6 7

Networth CAGR ('08-'11) 3 5 1 4 2 6 7

Net Profit CAGR ('08-'11) 2 1 6 3 4 5 7

TOTAL SCORE 4 year average 10 16 19 23 23 36 41

AHLIBANK

OABBANK

DHOFARBANK

MUSCAT NBO

BANK SOHAR

OIB

RANKING 1 2 3 4 5 6 7

NPA/GL 4 year average 1 3 5 4 6 2 7

Provision Coverage 4 year average 2 3 4 5 6 1 7

Operating profit per branch

4 year average 1 6 4 2 5 3 7

Operating profit per employee

4 year average 2 5 3 1 4 6 7

NII/Avg Int. Bearing assets

4 year average 6 1 2 3 5 7 4

Cost to Income 4 year average 3 4 2 1 5 7 6

RoAA 4 year average 3 1 5 6 4 7 2

RoAE 4 year average 5 1 2 6 3 7 4

TOTAL SCORE 23 24 27 28 38 40 44

also mandated a minimum capital requirement of RO10mn for Islamic banking windows.

A number of leading Omani commercial banks have since unveiled plans and strategies to offer shariah-compliant banking products and services to their customers. The market regulator, the CBO has also issued licenses for the establishment of two new banks – Bank Nizwa and Al Izz International Bank – which will exclusively focus on offering Islamic banking services. The new banks are expected to commence operations as soon as the legal and regulatory framework for Islamic banks is finalised. Bank Nizwa

and Al Izz International Bank are expected to start operations sometime in 2012.

And the winner is … As expected, the Best Banks 2011 survey throws up quite a few surprises. Ahli Bank has emerged as the No. 1 bank in Oman based on an all round performance by reporting stronger growth along with better asset quality and productivity. The bank has been able to show stronger performance during the last three years. Bank Dhofar has been ranked No.2 with the bank continuing its stable performance despite the presence of one off expenses during 2011. In terms of efficiency parameter, the

bank holds No. 2 position. Oman Arab Bank has come out as No.3 bank in the ranking with the bank doing well on sustainability. The bank has maintained its No.1 position in terms of efficiency, which is noteworthy.

Says Kanaga Sundar, senior manager- research, Gulf Baader Capital Markets, “Bank Muscat stood at No. 4 in the overall ranking due to the prevailing legacy issues and the sustained level of growth has to come in from a higher base. Despite this, the bank has maintained its No. 1 position in terms of productivity.” Bank Sohar, the new entrant to the current year ranking process has come out as No. 5 with a strong performance in growth cum

COVER STORY

42 April 2012

ASSET QUALITY

BANK SOHAR

AHLIBANK

OABBANK

MUSCAT BANK

DHOFARNBO OIB

RANKING 1 2 3 4 5 6 7

NPA/GL 4 year average 2 1 3 4 5 6 7

Provision Coverage 4 year average 1 2 3 5 4 6 7

TOTAL SCORE CAGR ('08-'11) 3 3 6 9 9 12 14

PRODUCTIVITY

BANKMUSCAT

AHLIBANK

BANKDHOFAR

NBOBANK

SOHAR OAB OIB

RANKING 1 2 3 4 5 6 7

Operating profit per branch (In RO)

4 year average 2 1 4 5 3 6 7

Operating profit per employee (In RO)

4 year average 1 2 3 4 6 5 7

TOTAL SCORE CAGR ('08-'11) 3 3 7 9 9 11 14

EFFICIENCY

OABBANK

DHOFARBANK

MUSCAT OIB NBO

AHLIBANK

BANK SOHAR

RANKING 1 2 3 4 5 6 7

NII/Avg Int. Bearing assets

4 year average 1 2 3 4 5 6 7

Cost to Income 4 year average 4 2 1 6 5 3 7

RoAA 4 year average 1 5 6 2 4 3 7

RoAE 4 year average 1 2 6 4 3 5 7

TOTAL SCORE 7 11 16 16 17 17 28

CUMULATIVE TABLE

AHLIBANK

BANKDHOFAR

OABBANK

MUSCAT BANK

SOHAR NBO OIB

GROWTH 1 3 5 4 2 6 7

SUSTAINABILITY 1 3 2 4 6 5 7

ASSET QUALITY 2 5 3 4 1 6 7

PRODUCTIVITY 2 3 6 1 5 4 7

EFFICIENCY 6 2 1 3 7 5 4

asset quality parameters.

National Bank of Oman stood as No. 6 in the overall ranking, though it fared much better in terms of growth. Oman International Bank has been ranked as No. 7 in the ranking with the bank reporting lower growth rates as compared to the industry during the last

three years.

Crystal gazing Oman’s 2012 budget foresees a nine per cent growth in public spending, with an allocation of a total of RO10bn for public expenditure. There is a clear focus on social aspects with increased current expenditure on areas such as education, health and social security by 18 per cent.

The expected spending level in 2012 will be slightly more than 2011 outlays. The nine per cent growth in public spending covers most of this committed expenditure, as well as additional requirements resulting from providing increased employment opportunities for the Sultanate’s citizens. And these augur well for the growth of the Sultanate’s banking sector.

COVER STORY

A DIVISION OF HABITAT INTERNATIONAL LLCP O Box : 3017, 112 Ruwi, Sultanate of Oman.TEL : +968 2456 8956, 2456 8575FAX : +968 2456 3756 | GSM: +968 99254037www.aljassaroman.com, www.group-vts.com

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44 April 2012

HE Hamood Sangour Al-Zadjali, Executive President, Central Bank of Oman shares his views on the Sultanate’s banking sector in an exclusive interview with OER

Maintaining momentum

How was the banking sector’s performance in 2011?Consistent with the sustained recovery of the real economy, Omani banking sector continued to exhibit accelerated growth and optimism during 2011. Total assets of commercial banks increased by 17.5 per cent to RO18.4bn in 2011 compared to RO15.6bn in the previous year. Aggregate deposits of commercial banks, on a year-on-year basis, increased by 19.6 per cent to RO12.6bn as at the end of December 2011. Total credit expanded by 16.7 per cent during the year to reach RO12.5bn. Commercial banks earned a provisional net profit of RO265.7mn in 2011 which was 7.3 percent higher than RO247.7mn registered in the previous year. The system-wise capital adequacy ratio for commercial banks as a percentage of total risk-weighted assets remained at a satisfactory level of around 16 per cent as against the minimum mandatory requirement of 12 per cent prescribed by the CBO.

What were the regulatory measures taken by the Central Bank of Oman (CBO) to strengthen the banking sector in the Sultanate?Although financial stability was maintained in Oman even during HE Hamood Sangour Al Zadjali, Executive President, Central Bank of Oman

COVER STORY

46 April 2012

the worst phase of the recent global financial crisis, CBO’s endeavour has been to safeguard and strengthen the financial system in the medium term against global and regional shocks. The CBO initiated a number of regulatory and supervisory measures to improve efficiency of the banking sector. The Omani banking system adopted Basel II capital adequacy framework since January 2007. Risk-based supervision is being implemented in Oman and the information is being integrated with the off-site monitoring to keep a constant vigil over the banking system. The system level aggregation of micro-prudential indicators is being done to generate financial soundness indicators. Since financial stability has emerged as a global problem, CBO has taken timely action in setting up a financial stability unit for macro-prudential supervision of the financial system and to produce financial stability reports on a regular basis.

The global economy has been going through a phase of uncertainty, has this had an impact on Oman’s macro-economy?Despite global uncertainties, the Omani economy continues to maintain the overall growth momentum mainly due to sustained rise in crude oil prices in the international markets. Increase in government expenditure and easy monetary policy also contributed to maintain domestic demand. The slowdown in global merchandise trade had limited impact on Omani exports as the direction of Omani exports has been more diversified towards the emerging market economies. However, the downside risks to growth in Oman will be due to prevailing global uncertainties, particularly in the euro area. Both the government and CBO are keeping a close vigil over the global developments and shall take necessary action as and when required to contain the spillover of the global slowdown.

The CBO has allowed Islamic banking in Oman, what impact will this have on the banking sector and the economy at large? How much ground work has been done regarding Islamic banking

and when can we expect the first set of regulations to come out?The CBO is confident that the advent of Islamic banking will have a positive impact on the economy. Oman offers a large potential for the growth of Islamic banking, opening up new segments and players both from banks within and investors from abroad and thus providing opportunities for new foreign investments. Banks are optimistic that they will be in a position to significantly increase business and this will augur well for the economy as a whole. Islamic banking is expected to complement the conventional banking in promoting development in the economy. In a competitive environment, bank customers should get the benefit of choosing between both conventional and Islamic banking products. This will enhance product diversification in the banking system.

The CBO has already given licenses for two new Islamic banks and allowed existing conventional banks to open windows for Islamic products with appropriate segregation of funds. They will become operational as soon as formalities such as regulatory requirements, raising of fresh capital and constitution of management are met. The CBO is finalising

the framework of regulations in consultation with banks and it is expected to be out by the first half of the year.

How do you see the banking sector in Oman performing in 2012?The banking sector in Oman continued its optimistic growth trend in 2011 consistent with the overall GDP growth. Banks remained sound, resilient and profitable due to appropriate regulatory and supervisory policies adopted by the CBO. The Eighth Five-Year Development Plan (2011-2015) aims at promoting an economic environment capable of sustaining long-term growth. The pace of economic diversification will further promote the role of the private sector in the development process. Under the plan, the CBO will continue to enhance the role of the banking sector in the economic development by encouraging credit growth to productive sectors including SMEs. The advent of Islamic banking is expected to complement the current conventional banking in promoting growth in the economy. The outlook for 2012 remains positive with increased business for banks amidst a stable domestic macroeconomic environment.

Total assets of commercial banks

2011

RO15.6bn

RO18.4bn

2010

Provisional net profit of commercial banks

2010 2011

RO247.7mnRO265.7mn

COVER STORY

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48 April 2012

A combination of efficiency, prudence and healthy growth has helped Ahlibank to emerge as a clear leader in the banking sector. Abdulaziz Al Balushi, CEO, Ahlibank shares the winning strategy of the bank in a candid chat with OER

The numero uno

AbdulAziz al Balushi, CEO, Ahlibank

Ahlibank has come up with a strong performance in 2011. Can you share the highlights of your 2011 performance? Ahlibank had an excellent year not just in terms of the bottomline, but in all areas of our business. We managed to reduce our cost of funds and grow our quality assets. We maintained our productivity at the highest levels in the country and if you look at the return per employee, the bank which is second is almost half of our figure. So our efficiency has been very good. Our non performing assets (NPAs) have been maintained at one per cent or below that level for the last five years, and this is a great achievement. In terms of SMEs we have only three accounts that are NPAs while in corporate banking we have zero NPAs. So our quality of assets and our quality of earnings are very good. Overall, we have had a very impressive bottomline. Our balance sheet has grown impressively, to put things in perspective since 2008 our loan book has grown by 3.25 times and this growth has come from new businesses like corporate and retail banking.

Talking of numbers, we have had a very good financial year. Some of the highlights of 2011 are as follows:

• The bank’s net operating income has increased by 37 per cent to RO35.31mn.

• Net profit after tax rose impressively by 29 per cent to RO18.22mn

• Our loan book grew by 17 per cent to RO769mn

• Deposits growth by six per cent to RO669mn. This is because we mobilised RO40mn through a subordinated debt issue in December 2010

• NPL ratio at one per cent, which is the lowest amongst banks in Oman

• Our cost to income ratio was 30 per cent again the best by industry standards

• The growth has been consistent, quarter over quarter and year over year

COVER STORY

• All our financial ratios and objectives have been met

What are the measures taken by ahlibank to strengthen its retail lending and corporate finance/project lending in the year gone by? As we wanted to reduce our concentration risk we did not focus on big projects in 2011. From the beginning of 2008 the gross loan has gone up 3.25 times to RO 776mn. On December 31, 2007 this figure stood at RO239mn. Corporate loans have grown by 11.6 times to RO411mn in 2011 from RO35mn as of December 2007. Retail loans have gone up by 1.8 times at the end of 2011 to RO365mn from RO204mn on December 31, 2007. The bank achieved a personal corporate loan ratio of 47 per cent as of December 31, 2011.

The above was achieved in a prudent way with established robust risk management policies which is reflected in the quality of assets (NPL ratio of one per cent as of 31-Dec-2011). The retail growth was achieved due to an increase in the branch network and a dedicated sales force. We have had several promotional schemes for the government and quasi-government sectors. The bank’s process control have helped to reduce turnaround times and improve customer service. Our enhanced net-worth and risk participation with our strategic partner has enabled us to finance some large projects during the year.

The CBO has permitted Islamic Banking in Oman, what impact will this have on the Sultanate’s banking sector and what are ahlibank’s plan in this direction? Islamic banking will be another choice being offered to customers who would wish to practice individual faith and belief. The potential would be to attract customers who are currently not availing any banking facilities due to lack of an alternate option as well those who for similar reasons have invested their funds elsewhere in the GCC. Global predictions on the growth of Islamic banking in the years to come are very encouraging and Oman would have

2008 2009 2010 2011

Gross Loans (RO '000) 378,043 446,563 659,909 776,039

Customer deposits (RO '000) 319,256 466,710 632,178 668,911

Total Assets (RO '000) 456,405 616,058 805,594 929,604

Non Performing Assets /GL 0.2% 0.3% 0.3% 0.7%

No of Branches in Oman 7 12 12 12

No of Employees 226 237 243 288

Operating Profit (RO '000) 6,936 10,847 17,681 25,642

Net Profit (RO '000) 5,933 8,541 14,100 18,224

its fair share of business. The CBO has granted Islamic Banking licenses to two new banks which will be wholly Islamic and it is expected that most local banks will have Islamic banking windows. Competition amongst local players is bound to increase and there will be some advantage for the first comers to this new business. Ahlibank’s strategic partner has developed expertise in Islamic banking and the transfer of this to Ahlibank is almost complete. We have made quite a lot of progress in preparing for the launch of Islamic banking and these are as follows:

• A Shari’a Board has been constituted

• We have launched our Islamic banking logo and brand

• Core banking system to support Islamic banking activities have been implemented

• Key personnel have been appointed

• Locations for dedicated branches identified and branch infrastructure is complete at four locations

• Staff training has been ongoing and there are more than 25 existing staff who have been certified as Islamic bankers by the Bahrain Institute of Islamic Finance

• Capital planning done and we are ready to launch as soon as the CBO rules are announced

Can you share details about your branch and ATM network and are

there any plans of upgrading your presence in the year ahead? We currently have 12 branches and 17 ATM’s ( 5 offsite). The bank is planning to increase the number of branches to 19 and ATM’s to 26 (7 offsite ATMs). Of the 19 branches, six branches will be dedicated to Islamic banking. Technology upgradation will be ongoing and we will increasingly use the same to develop our reach in Oman e.g. E-banking, SMS banking, phone banking, ERP solutions etc.

Were there any measures taken by the bank to strengthen its HR practices in 2011? We took a number of HR initiatives in 2011. A comprehensive HR policy is in place. Staff benefits have been reviewed and many social benefits introduced e.g. medical, hours of work, education policy, maternity benefits etc. A fair meritocratic assessment of staff through a improved performance appraisal programme has been institutionalised.

Training Needs Analysis for the entire staff has been completed and training programmes have planned at all levels. The bank has signed up with the CBFS for tailor made programmes exclusively for our staff. A management trainee programme has been introduced. On the job training as well as external training has been planned for the year. We have put in place a succession plan. Attempts are being made to develop a local talent pool.

50 April 2012

Bank Dhofar is preparing for further business growth and sustainability by virtue of implementation of its strategic five year plan for 2013-2018 which will give it a fresh perspective

Graduated to new level

Anthony Mahoney, CEO, BankDhofar

will focus on profitable growth while improving service, quality and overall operations of the bank. In 2011, on the back of a sharp increase in crude prices and a moderate increase in crude oil production Oman’s budget surplus was beyond the projected level. The credit off take in 2011 for the banking sector in general was moderate at best and the Wholesale Banking Group (WBG) of BankDhofar which caters to the needs of the corporate clientele performed reasonably well.

Wholesale bankingThe WBG consists of three lending arms, namely, large corporate banking department; project finance & syndications department and mid segment corporate department.The bank has introduced customer segmentation based on certain quantitative criteria for a specialised approach. The customer profile spans across various industries which includes trading, manufacturing, services and contracting.

Despite a sluggish environment the asset growth in the large corporate banking has been good chiefly on account of the efforts put in by the team to target new clients and build on existing relationships. Emphasis was also placed on maintaining asset quality through detection of incipient sickness and taking pro-active steps to mitigate the same. There was pressure on interest margins due to increased competition. Non fund based income which is mainly the commissions derived from issuances of various guarantees and letters of credit was on a low keel due to the slowdown in the award of new contracts.

For the project finance and syndications department, the Eurozone crisis had further exacerbated the availability of long term dollar funds that was already under strain after the 2008 global economic crisis. Due to this none of the local banks had the competitive edge to finance the latest three independent power and water projects of Sohar, Barka and Sur which

Over the years, BankDhofar has participated in almost all the major infrastructural projects like Oman India Fertiliser

Company, Sohar Aluminum, Oman LNG, Oman Gas, Salalah Port, Oman Refinery (expansion), Octal Petrochemicals and six power and water projects. Now the bank has graduated to the level of a lead arranger from modest beginnings and has in place the technical capability to independently arrange funds for medium sized ventures with local, regional and international banks.

The prognosis for 2012 is one of cautious optimism despite the

continuing global problems. This is on account of the government’s bold initiatives to forge ahead with the strengthening of the infrastructural framework of the country and the likely scenario of sustained higher prices of crude oil.

Strategy and planningWith its five year strategy plan coming to an end in 2012, BankDhofar has partnered with Boston Consultancy group (BCG) a leading management consultancy firm to develop its strategy for the future. The plan will cover major business units including retail banking and wholesale banking. It

COVER STORY

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52 April 2012

have sourced their entire long term loan requirement from a syndicate of international banks. The challenge of long term dollar funds was partly addressed for smaller projects with club financing in rial omani terms and some innovative financial structuring. the lack of a proper basis for benchmarking the long term interest rates is a major impediment in the use of rial omani for term financing.

The mid sector corporate department caters to the needs of the corporates at the smaller end of the scale. Recently, the small and medium enterprises (SME) accounts which hitherto had been dealt by the retail banking division were shifted to this department. The bank’s products and services are designed to suit the particular needs of the smaller corporates and to enable them to meet the challenges in the marketplace. In consonance with the objective of the government to strengthen the SME sector, BankDhofar is focusing on improving the credit delivery to this segment.

Retail bankingThe retail banking division (RBD) of BankDhofar continued its focus on providing value added products and services to the customers. The bank continued its growth and expansion strategy in 2011, strengthening its distribution channels with the addition of more branches, ATMs and CDMs. The year 2011 saw the addition of three new branches at Taqa, Mirbat and Bausher, the year ended with 59 branches, 120 ATMs and 36 CDMs and one multifunctional machine.

During 2011, the product development team has worked on enhancing existing products as well as designing, developing and implementing new products and services. Last year, three products and two services were launched. The products were Bancassurance (Tamini), Al Heson new scheme and high yield interest bearing deposit. The services were priority banking (Al Riadah) and ladies banking (Hawa). In March 2011 bancassurance (Tamini) was

2008 2009 2010 2011

Gross Loans (RO '000) 1,068,767 1257,832 1,333,436 1,573,215

Customer deposits (RO '000) 971,596 1,101,267 1,249,605 1,519,318

Total Assets (RO '000) 1,253,820 1,509,265 1,664,296 1,960,591

Non Performing Assets /GL 3.6% 4.8% 4.7% 3.80%

No of Branches in Oman 51 54 56 59

No of Employees 840 937 1,062 1,202

Operating Profit (RO '000) 36,670 43,158 44,209 47,945

Net Profit (RO'000) 23,686 25,393 33,280 13,976

introduced at the branches and the official launch to the public took place in July 2011. Tamini is a motor insurance service provided by the bank through an insurance agency. The insurance covers all kinds of policies and offers the lowest no claim bonus discount in the market. High yield interest bearing deposit has been revamped and re-launched in October 2011 to offer the highest interest rate on savings and automatically increases with balance increase.

Priority banking serviceAl Riadah priority banking service was launched in April 2011 with the aim of providing special services to customers with a net worth of RO50,000 and above. Al Riadah offers the very best of convenience and exclusivity to the bank’s priority customers. There are dedicated relationship managers assigned to process the customer’s transactions quickly, efficiently and help them manage their everyday banking needs. There is also an exclusive Al Riadah lounge in Azaiba. A special debit and credit card was designed to allow higher daily withdrawals.

E-banking As part of the of the distribution plan for 2011, the electronic channels witnessed a remarkable development which improved service levels. Call centre services were also improved through enhanced training and introduction of service monitoring tools, such as mystery shopping and

call quality scoring. The call centre strength was increased to 16 call agents under a manager. The call centre also generated an increased amount of business through inbound and outbound campaigns. To ensure customer satisfaction, a strict quality control procedure has been implemented. In addition, the call centre staff is put through periodic training programmes on products and customer handling skills. In the period of last 12 months, the call centre continued witnessing an increase in the number of calls being handled by staff - about 176,527 calls were handled by the staff in 2011.

New initiativesWith a view to capitalise on the opportunities arising out of the rapid development of Sohar as an industrial hub, efforts are on to open a corporate branch there. There are also plans to start corporate desks at high volume centres in Muscat such as Azaiba and Rusayl. An exclusive call centre services for corporate customers is also on the anvil. New services were added such as third party transfers in ATMs and the opportunity to donate to charities using CDMs. The bank is planning to introduce banking kiosk to enhance customer service. There are also plans to introduce MasterCard acquiring on the bank’s ATM and introduction of MasterCard and Visa POS acquiring. ATM and CDM network comprising of 157 machines will be expanded further in the year 2012 to enhance the bank’s coverage.

COVER STORY

54 April 2012

Oman Arab Bank (OAB) has come up with a good performance in 2011. What are the factors that enabled the Bank to do well in the year gone by? Overall our performance has been very good -- our profit in 2011 is equal to the previous year and this has been achieved despite the increase in our expenses, due to the increase in salaries and manpower costs. As with other banks most of OAB’s profits come from interest and the rest of the profit accrues from trade and project finance, commissions, contract related activities, guarantees and other things. The bank has been able to grow its business in all these areas and these find a reflection in the numbers.

OAB has always been very strong in the project financing arena. Which were the major projects that you financedin 2011?

We are financing a lot of projects both small and big, some of these projects are in Duqm and Sohar. We finance projects individually and with other banks as syndications or consortiums.

Are there a lot of infrastructure projects taking place in Oman? Yes, there are a number of projects that are coming up in Oman like the expansion of Raysut Cement, projects in the various freezones, the electricity projects, ongoing projects in Duqm and we are looking at all of these as prospective business opportunities.

Apart from project finance the bank has been focussing on the retail side aggressively in the last few years. How has your performance been in retail banking? In retail banking we have been doing as planned, we are not concentrating

only on the retail business but anyway, our retail business is much better than before. We are offering new products, but I am very keen that we should not exceed the prescribed limits for personal loans as it is dangerous for borrowers.

Central Bank of Oman (CBO) has permitted Islamic banking in Oman, what impact will this have on the Sultanate’s banking sector and what are OAB’s plans in this direction? We are looking at opening a window for Islamic services and we are taking certain steps to achieve the requisite regulatory procedures. The bank is currently training its staff who we will be taking care of its Islamic service. We are waiting for the laws to be issued by the CBO to commence our service.

When do you expect Islamic banking

Abdul Kader Askalan, CEO, Oman Arab Bank feels that Islamic banking presents an opportunity and a challenge for the banking sector in the Sultanate in an interview with OER

Healthy competition Abdul Kader Askalan, CEO, OAB

COVER STORY

regulations to be issued? As the CBO has said the rules will be issued in the next three months. As you are aware two banks have been given an Islamic banking license. Other banks have been permitted to come up with Islamic finance windows and all of us are waiting for the regulations to be issued.

What impact will Islamic finance have on the market? It is a new system and is one of the additional products that we can offer to our customers. As it is a new product or system it is our duty to educate people about Islamic banking, so that customers can judge the costs and the merit of these products. Some customers may think that there is no cost attached to such products, but they will discover that there is a charge for such products. Once they realise that there is a charge they may compare Islamic banking with commercial banking. Once they realise that there is a certain additional cost on Islamic banking, then the question is whether they will stay or return to commercial banking? In the beginning most people would go for Islamic banking but the service and cost implications will decide whether they will stick to it or not.

So are there challenges and opportunities that Islamic banking will throw up in Oman? Yes there are challenges that both the commercial banks and Islamic banks will have to face. On the other hand it is good as it will diversify our product

base. Islamic banking is very popular in most countries, both in the region and internationally, but it all depends on how it is offered to the customer.

What were the challenges that you faced in 2011? There were no extraordinary challenges. Our staff costs grew and we needed to invest in improving and updating our services for the customer. The bank has put in place new IT systems, programmes, ATMs, cash deposit machines etc to comply with the requirements of modern day banking and this has a cost implication.

OAB is constructing its new headquarters, when do you expect to move in to the new location? We expect to move into our new building by May or June 2012 as a lot of infrastructure work in terms of parking facilities, roads etc still needs to be done.

Can you tell us about OAB’s plans for FY 2012? We have budgeted a growth of 10-12 per cent in 2012. Our focus will be on

project finance and on increasing our branch network. Apart from this we also need to modernise our services for customers.

You mentioned about expanding your branch network, specifically what are you looking at? Every year we open two to three new branches. In 2011 we opened three branches, this year we will be opening three or more branches. Our aim is to have branches in most areas of the Sultanate. We were the first bank to open a branch in Duqm, but now we need to go to Musandam, Khasab etc.

OAB has a strong presence in the portfolio management space, what accounts for your success in this area? Our investment group has a lot of experience in managing portfolio’s. We are managing funds for the government and our own funds. The funds that we are managing are not losing as much as the securities markets. Thus we have been able to minimise losses on the one hand and have made profits (at times) on the other.

Will the entry of new banks enhance competition in the Sultanate’s market? Things are going to become more challenging in terms of competition. We hope that such intense competition gets reduced as a result of the Banking Association that has been formed recently. The association has representation from all banks -- I have been elected as the chairman of the association and we have formed a board of directors. The association will give us a chance to negotiate and see as to how we can minimise it as unfettered competition will destroy the banking sector. If a bank has a policy of competing with another bank, it will impact all the banks and we hope that this association will minimise such instances. The association will discuss all the rules being issued by the CBO and see whether it is fit for the banks or not. It will help banks to negotiate with the regulator together. The association can be very beneficial for the banking sector.

We hope that intense competition gets reduced as a result of the Banking Association that has been formed recently

2008 2009 2010 2011

Gross Loans (RO '000) 553,978 583,404 682,349 857,000

Customer deposits (RO '000) 610,905 696,072 769,761 909,660

Total Assets (RO '000) 779,106 858,891 953,655 1,114,665

Non Performing Assets /GL 1.6% 2.7% 3.1% 2.90%

No of Branches in Oman 39 45 47 51

No of Employees 782 845 885 944

Operating Profit (RO '000) 27,898 29,700 31,333 31,893

Net Profit (RO '000) 24,560 23,081 23,170 23,205

56 April 2012

Dr AbdulRazak Ali Issa, Chief Executive, BankMuscat shares his views on the bank’s achievements in 2011 and the road ahead in an interview with OER

Best in class

Dr AbdulRazak Ali Issa, Chief Executive, BankMuscat

As the leading Omani bank, BankMuscat enjoys a 40 per cent marketshare in Oman, with over $16bn in assets,

capital of over $2bn and a customer base of over 1.2mn. The bank is rated ‘A1’ by Moody’s and A- by Standard’s & Poor’s. The bank has an extensive network of branches in Oman, direct and indirect presence in all six GCC states as well as an office in Singapore which focuses on financial institutions and the trade business.

The opportunities identified by the bank include significant infrastructure development which is expected to contribute to the growth of the banking sector. BankMuscat envisages substantial product cross-sell opportunities and sizeable unbanked market as over 50 per cent of the population is below the age of 19 years. Expansion in the Gulf Cooperation Council (GCC) countries is among the priorities in view of the bank’s direct and indirect presence in all the six states.

The bank is well positioned to leverage on the largest network of branches and other delivery channels to target the growth potential and cross-sell opportunities. BankMuscat’s presence has strengthened in all parts of Oman through the widest network of 130 branches, 520 ATM/CDMs and 5,300 PoS terminals. The bank is also set to leverage on investments in new technology and state-of-the-art head office building to further increase efficiency, improve customer service and support growth plan. BankMuscat is well known for adopting innovative strategies to raise capital and enhance stakeholder value. The bank views the industrial development of Oman as a strategic opportunity, especially in Sohar, Salalah and Duqm. BankMuscat’s chief executive gives in-depth insights on the bank’s performance and plans for the coming year. Excerpts from an interview.

How has BankMuscat’s performance been in financial year 2011?The key business lines of the bank recorded healthy performance during

2011. BankMuscat’s core business activities are divided into the broad areas of corporate banking, consumer banking, investment banking, treasury, financial institution, private banking and asset management and international operations. Key support functions include information technology, operations, human resources, finance and risk management. In 2011 some of the notable highlights of our performance were as follows:

Ratings upgrade Standard & Poor’s upgraded BankMuscat’s Long Term Rating to ‘A-’ from ‘BBB+’. This was a significant development in the current economic environment signifying the trust

reposed in BankMuscat by the analytical and investor community. The Issuer Default Ratings /Long Term Ratings were also affirmed by other rating agencies.

Tier II capital During the year, BankMuscat raised a total of $430mn in Tier II capital of which $170mn was from IFC Capitalisation Fund. The bank also raised $260mn of Tier II capital through a private placement of fixed income subordinated paper with tenors of 61 months to 84 months. The issue attracted considerable interest from institutional investors. The Tier II capital raising will bolster BankMuscat’s capital and support the growth in its asset book. BankMuscat

COVER STORY

STATEMENT OF FINANCIAL POSITIONAt 31 December 2011

It is my pleasure, on behalf of the Board of Directors,

to present our 14th Annual Report, for the year ended

31st December 2011.

Current Economic Scenario

During the year 2012 the economic recovery

is expected to remain weak in most advanced

economies by past standards but expected to be

relatively vigorous in many emerging and developing

economies, largely driven by buoyant internal demand

especially in the Asian Segment.

Year 2011 has seen the growth in the regional market

and there have been positive signs due to stable crude

prices, reserves and budget surpluses of earlier years.

We expect that the year 2012 will be a favourable year

for the business community in the Asian and Middle

East markets.

Domestic Economy

During the year 2011, Oman has witnessed moderate

growth due to stable oil prices, reserves and budget

surpluses and anti cyclical fiscal policies. Against

the budgeted deficit of RO 850 million, the country

is expected to generate a budget surplus over

RO 900 million. This has provided good impetus to

government expenditure in the year 2012 Budget as

well as Eighth Five Year Plan. The current crude oil

price is at a reasonable level of above US$ 100 per

barrel, higher than the budgeted price of US$ 75 per

barrel by the government for the year 2012.

The country has initiated various infrastructure

projects which will trigger a lot of economic activities

and employment generation during the year 2012. The

government initiatives to strengthen the small and

medium enterprises, will contribute significantly to the

economic development of the country.

NBFCs are a major source of funding for the SMEs

and will play a significant role in the economic

development of the country. The liquidity position in

the money market is high and the interest rates are

at lower levels. With demand for capital goods and

consumer products expecting to go up, the prognosis

for NBFC’s looks optimistic for the current year.

Financial Highlights

In the year 2011 the company achieved growth in

business volumes, earnings and profitability. The

company has achieved a profit after tax of RO 4.831

million as compared to RO 4.131 million in the previous

year, resulting in a growth of 16.9%. The company’s

net hire purchase assets stand at RO 155.356 million

against RO 129.647 million in the previous year, with

an increase of 19.83%. The total assets size as of

31 December 2011 is RO 159.191 million.

The company has provided RO 1970K towards

allowance for impairments, for the year 2011.

The total provision against impairment stands at

RO 6.023 million as of 31 December 2011. The

company maintains its position as the largest NBFC in

terms of assets size, net worth, market capitalization,

net profit and provisioning cover for NPLs.

Proposed Dividend

It is our intention to continue the sustainable and

progressive dividend policy that the company has

followed since inception. Your directors have proposed

a dividend of 25% for the year 2011 comprising 20%

cash and 5% stock dividend, thus maintaining its

track record of paying consistent dividends without

interruption since inception. This takes the cumulative

dividend paid to shareholders to 278% since

inception. This year’s cash dividend of 20% is also the

highest amongst all finance companies.

Capital Enhancement

15,557,790 fully compulsorily convertible bonus stock

bonds and 77,138,128 fully compulsorily convertible

bonds will both be converted into shares during

the year 2012. The impending bond conversions

and the proposed 5% stock dividend, are expected

to enhance the Paid-up Capital in excess of

RO 20 million by September 2012.

The company is in the process of issuing

RO 10 million Un-secured Fully Compulsorily

Convertible Bonds on rights basis during this year

2012 with a bond tenor of 5 years, with 20% of the

issued bonds converted to equity shares at discounted

market price every year for a period of 5 years to meet

the regulatory requirement of minimum capital of

RO 25 million by year 2016.

Concerns

Diminishing margins due to intense competition

increase in the cost of funds, new banks entering

the market and higher delinquencies due to reduced

cash flow at the individual borrower level are causes

of concern. The impact of the credit crunch and

continuation of slow recovery could see increase

in delinquencies resulting in dilution of the NPA

coverage. The manning costs remain a concern in the

short run as head count is increasing rapidly.

Prognosis

We foresee a challenging yet optimistic year ahead,

given the expected economic turnaround and the

positive economic indicators. The company is very

well poised to take advantage of the new spurts

given the right capital structure, high net worth, free

leverage, and fresh funds. Your company is expected

to maintain its track of profitability and dividends

inspite of challenging circumstances.

Acknowledgement

On behalf of the company and the Board of Directors,

I would like to express my deep gratitude to His

Majesty Sultan Qaboos bin Said for his vision and

leadership, which is taking the Sultanate on the new

path of development and prosperity.

We are also grateful to the Central Bank of Oman,

Capital Market Authority and other regulatory

authorities for their guidance and support. We

also thank our shareholders, bankers, dealers and

customers for their continued trust, confidence

and support. Last, but not the least, we

acknowledge the dedication and commitment of the

management and staff of the company.

Khalid Said Al WahaibiChairman

Notes: The Complete Financial Statements of the Company together with the Financial Statement of

Company address: P. O. Box 1087, PC 114, Sultanate of Oman

Contingent liabilitiesAt 31 December 2011, there were contigent liabilities of RO 1,173,263 (2010 - RO 1,190,679) in respect of guarantees and letter of credits issued in the normal course of business on behalf of customers.

P.O. Box: 1087, Jibroo, PC 114, Sultanate of Oman. Tel: 24811164, Fax: 24813258

STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 31 December 2011

PROFIT UP 17% DIVIDEND 25%

AUDITED FINANCIALS FOR THE YEAR 2011

Lifeline Auto Loan, Lifestyle Personal Loan, Bill Discounting, Debt Factoring, Project & Construction Loans, Working Capital Loans, Bridge Loans, Corporate Loans,

Express Business Loans & Corporate Deposits

2011 2010 RO RO

13,930,732 12,962,868

Interest expense (3,661,204) (4,378,731)

10,269,528 8,584,137

Other income 505,247 407,641

Operating expenses (3,181,489) (2,819,475)

Allowance for impairment (net) (1,970,000) (1,323,380)

Depreciation (155,515) (157,320)

5,467,771 4,691,603 Income tax expense (636,456) (560,157)

4,831,315 4,131,446

Basic earnings per share 0.031 0.027

Diluted earnings per share 0.027 0.021

CHAIRMAN’S REPORT

2011 2010 RO ROAssets

Bank balances and cash 1,642,862 6,796,610Deposit with the Central Bank of Oman 50,000 50,000

155,356,240 129,647,014Other assets and prepayments 217,179 185,452Property and equipment 1,229,384 1,081,764Deferred tax asset 695,447 589,183

Total assets 159,191,112 138,350,023

Liabilities Short term loans 57,000,000 43,000,000Deposits 4,300,000 11,170,000Term loans 37,916,871 25,688,004

10,358,637 9,269,592Other liabilities 13,575,378 14,304,387Income tax payable 933,220 752,902

Total liabilities 124,084,106 104,184,885

Share capital 15,557,787 15,557,787Share premium 3,503,752 4,592,797

5,185,929 5,185,929Retained earnings 10,859,538 8,828,625

Net assets per share 0.226 0.220

58 April 2012

is committed to lending its full support to the socio-economic development of Oman and this capital raising will strengthen the bank’s ability to extend finance to further enhance Oman’s development domestically and increase its competitiveness internationally.

Al Mazyona As the nation’s leading bank, BankMuscat continued to play the leadership role in promoting the savings culture in the Sultanate. The bank’s flagship al Mazyona savings scheme marked 20 years in the Sultanate. On this occasion, the popular al Mazyona scheme was relaunched and customers responded very positively to the relaunch. The bank increased the savings deposits portfolio to achieve a historic milestone of RO1bn.

Corporate banking Strong customer relationship remains fundamental to the growth of our corporate business with a focus on the quality of loan assets and building customer confidence. The bank maintains its emphasis in supporting feasible projects in core areas such as oil and gas, petrochemicals, large-scale industry, shipping and contracting. The bank successfully completed, inter alia, financing of Sohar Free Zone, a specialty steel project, expansion of the cement sector and a syndicated facility for the integrated tourism project Wave. The SME department partnered with the Ministry of Commerce & Industry to launch the government guaranteed loan programme in support of SMEs. The $170mn subordinated loan agreement with the IFC Capitalisation Fund was aimed at strengthening the capital base and increasing access to finance for small and medium enterprises (SMEs) and middle-income home buyers.

Human resources management BankMuscat achieved a global first, winning the prestigious Level 3 People Capability Maturity Model (PCMM) certification by Carnegie Melon University, USA for adopting benchmark human resources process improvements. BankMuscat has the

2008 2009 2010 2011

Gross Loans (RO '000) 3,853,274 4,052,056 4,194,192 4,995,926

Customer deposits (RO '000) 3,173,032 3,068,425 3,526,953 4,749,489

Total Assets (RO '000) 5,959,436 5,850,736 5,851,128 7,228,001

Non Performing Assets/GL 2.3% 5٫0% 4.2% 3.0%

No of Branches in Oman 199 125 127 130

No of Employees 2,576 2,579 2,709 3,024

Operating Profit (RO'000) 158,314 155,042 171,347 184,510

Net Profit (RO '000) 93,731 20,494 101,595 117,546

distinction of outstanding Omani leadership at all levels. The bank’s women empowerment strategy is also notable as 42 per cent of staff are women holding various positions, including senior management positions.

Information Technology The Information Technology department runs all its projects and programmes focussed on high business benefits, risk mitigation, compliance or service improvement. Based on recommendations of the Business Continuity Plan (BCP) committee, IT department implemented a state-of-the-art Disaster Recovery Solution providing the bank with a unique capability to ensure uninterrupted service during crisis.

International operations: The year 2011 was a challenging year for the banking sector in the GCC region. Despite the challenging external environment, the performance of the bank’s international entities reflects an improving operating trend. During 2011, the bank marked its presence

in Southeast Asia with the opening of its Representative Office in Singapore. With this expansion, the bank is well positioned to benefit from the trade flows between Asia and the GCC, which have witnessed rapid growth in recent years. The focus for the bank now is to strengthen its position in the individual markets, by scaling up businesses and improving operating performances with the aim of deriving the benefits of its international network.

Can you tell us about the bank’s road map for FY2012? The outlook for Oman’s economy in 2012 is positive as the government has announced a 12 per cent increase in spending. In view of the government’s commitment to infrastructure development and industrialisation, BankMuscat anticipates growth opportunities. The good macro-economic growth will create beneficial operating conditions for the bank as the government accelerates financial support, primarily for infrastructure projects. The bank anticipates strong capital levels and a high loss-absorption capacity. The opportunity arising from Islamic banking is also expected to help the bank further consolidate operations. In line with the Royal directive on Islamic banking, BankMuscat is set to introduce the most trusted and innovative Islamic banking products. For this purpose, the bank has announced ‘Meethaq’ Islamic banking window operations with a capital of RO150mn, subject to approval of Central Bank of Oman.

BankMuscat is well positioned to benefit from the trade flows between Asia and the GCC, which saw rapid growth recently

COVER STORY

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62 April 2012

How was Bank Sohar’s performance in financial year 2011? Bank Sohar registered a net profit of RO14.5mn for the financial year 2011, a growth of 42 per cent compared to 2010 despite a challenging economic and business environment aggravated by the credit crisis in Greece and the downgrade of the USA by a leading rating agency. The operating profit for the year was over RO20mn, an increase of 28 per cent compared to 2010. Net interest income during the year increased by 13 per cent to RO34.8mn during the year. The bank continued its focus on the corporate sector to drive a risk free but profitable business model. The operating income for the year 2011 increased by 22.60 per cent in comparison to the previous year. This was despite an increase in the cost of manpower as well as that of infrastructure experienced by the

whole country. Bank Sohar continued its focus on improving efficiency in both its fund management and its operations. The cost-to-income ratio improved to 53.67 per cent in 2011, down from 55.6 per cent in 2010. Significant gains were made in the bank’s overall business as well. Net loans and advances increased by 12.9 per cent during the year to touch RO1,020mn. Customer deposits grew by 17.2 per cent to RO1,171mn during the year signifying their continued faith in Bank Sohar.

What are the measures taken by Bank Sohar to strengthen its retail lending and corporate finance/project lending in the year gone by?Bank Sohar continues with its strategy of providing its retail customers with loans for building productive assets without substantially increasing their

indebtedness. The retail customers are provided with the entire suit of loan products including home loans, personal loans, business loans, credit cards etc. Bank Sohar through its wholesale banking group is active in project financing for infrastructure and manufacturing projects and other initiatives of national importance. The bank participated in some large loans syndications during the year and continues to pursue opportunities in the project finance sector.

The Central Bank of Oman has permitted Islamic banking in Oman, what impact will this have on the Sultanate’s Banking sector and what are Bank Sohar’s plan in this direction?One of the key initiatives for Bank Sohar during the year is the introduction of an Islamic banking window. In pursuance of this goal, the

Bank Sohar has been able to enhance its performance and productivity apart from providing career opportunities for its staff, says Dr Mohamed Abdulaziz Kalmoor, CEO

On a strong footingDr Mohamed Abdulaziz Kalmoor, CEO, Bank Sohar

COVER STORY

bank is putting in place frameworks, systems and procedures to facilitate the roll-out of Shariah-compliant products and services. Competition in this emerging financial sector is expected to be fierce, given the widespread interest in Islamic banking evinced by Omani customers. Bank Sohar however is determined to be a key player in this area. The bank has also taken steps to raise its capital base by RO10mn via a rights issue to capitalise on this initiative.

Can you share details about your branch and ATM network and are there any plans of upgrading your presence in the year ahead?Bank Sohar added four new branches during the year, expanding the branch network to a total of 25 branches by end 2011. These additions in prime locations yielded fruitful results for the bank in terms of additional business and have lent convenience to customers. During the year, the bank also added seven ATMs, taking the total count to 44 ATM machines across the Sultanate. Bank Sohar customers continue to enjoy the privilege of free-of-charge access to over 650 ATMs under the “Oman-Net” platform. Bank’s ATMs at Buraimi and Wajajah borders were activated with a “Dirhams Dispensing” facility; thus adding immense convenience to businessmen who travel and transact business across the border on a regular basis as well as to customers who visit the UAE. Cash deposit facility at all branch ATMs was added as another convenience offered to customers. With the addition of this facility, the bank’s existing ATM machines perform a dual function.

The bank will continue to expand its network of branches and ATMs to improve its reach and to facilitate customers’ access to the bank’s touch points.

Were there any measures taken by the bank to strengthen its HR practices in 2011?The main focus for 2011 was to enhance performance and productivity and to provide employment and career opportunities to the bank’s

2008 2009 2010 2011

Gross Loans (RO ’000) 644,101 799,451 920,140 1,040,927

Customer Deposits (RO ’000) 547,913 832,449 999,135 1,171,437

Total Assets (RO ’000) 842,911 1,024,610 1,258,615 1,431,977

Non Performing Assets /GL 0.1% 0.2% 0.9% 1.50%

No of Branches in Oman 11 14 21 25

No of Employees 400 448 513 549

Operating Profit (RO ’000) 6,179 13,514 17,506 21,826

Net Profit (RO ’000) (2264) 8,022 10,220 14,497

internal staff. There is a continuous effort in developing, motivating and engaging our team, something that has succeeded in addressing the organisational objectives in the continued challenging business environment. The bank also achieved the milestone of 90 per cent Omanisation set for the banking industry.

The bank has initiated customer satisfaction survey for retail as well as corporate customers. Outcome of the surveys has helped us in evolving our own ‘External Customer Service Index’. To measure how one department serves the other, the bank has developed ‘Internal Customer Service Index’ through an internal customer service survey. The third key parameter of customer satisfaction is employee satisfaction which we have gathered through an ‘Employee Opinion Survey’.

The outcomes and results of all these

surveys has given us clear indications of how well we have progressed in our journey to excellence and where improvements are required. To develop the leadership at all levels in the bank, we have introduced a Leadership Excellence Programme this year in a very structured and professional manner. This was a key step that the bank has taken in creating a ‘Culture of Learning’ which will help all our employees to develop their skills and competencies to enable them to play a leadership role that they need to play to take this bank to greater heights and meet the future challenges that lie ahead. This programme will be further enhanced across the bank at different levels thus making learning a way of life in Bank Sohar.

Amongst many initiatives implemented during the year, we would like to mention team briefing, enhanced performance management system, staff appreciation and recognition (STAR) programme and a competency based interview process.

Can you tell us about the bank’s road map for FY2012?The bank will continue with its vision of being a “One stop financial super mall having boutiques of products and services across various segments, each with a unique set of propositions”. Moreover, it will always be on the look-out for new business opportunities, and be alert to ensuing challenges, and thereby endeavour to address them in a timely manner.

The main focus for 2011 was to enhance performance and productivity and to provide employment and career opportunities to the bank’s staff

64 April 2012

How was NBO’s performance in the financial year 2011? The bank reported a strong growth during the financial year 2011. Net profit after tax increased by 26 per cent to RO34.2mn, compared to RO27.2mn in 2010. Net interest income grew by five per cent compared to 2010 while the cost of funds improved by 51 basis points (bps) during the year. Non-interest income grew significantly and was 37 per cent of the total income. The cost to income ratio improved from 51 per cent to 47 per cent even as the bank continued to invest in its employees, systems and delivery channel network. The bank

continued its focus on recoveries as well as reduction in non-performing loans. Recoveries and release of provisions from credit losses increased by 43 per cent compared to 2010. Non-performing loans came down from 3.5 per cent in December 2010 to 2.94 per cent at the end of 2011. The coverage for loan loss provisions stood at 100 per cent at the end of the year. Provision for credit losses and investments for the year were higher mainly due to an increase in the impairment of investments classified under the available for sale category. Customer lending during the year increased by 23 per cent to reach

The introduction of innovative products and improved services proved beneficial for National Bank of Oman’s customers, says Salaam Al Shaksy, CEO. Excerpts from an interview

Capitalising on its strengths

Salaam Al Shaksy, CEO, National Bank of Oman

RO1.7bn. Customer deposits grew by 21 per cent over the previous year to close at RO1.6bn as at December 2011.

What were the measures taken by NBO to strengthen its retail lending and corporate finance/project lending in the year gone by?The bank’s retail performance in 2011 was excellent. A number of innovative products were introduced and service quality across all delivery channels was improved. NBO’s housing loan scheme ‘Al Manzel’ was completely redesigned with many new features and offers. Apart from attractive interest rates and improved service, a fall in property prices to reasonable levels and an increase in salary levels and other benefits, enabled NBO to aggressively market Al Manzel amongst potential borrowers. We are currently offering one of the lowest interest rates to our customers along with longer tenors of up to 30 years and an option to pay insurance fees on a monthly basis rather than paying this upfront.

With the recent increase of salaries in many sectors coupled with the prudent policies being pursued by the Central Bank of Oman (CBO), the bank’s personal loans portfolio has also shown a modest increase. We are also taking cautious and measured steps towards extending credit to small and medium sized establishments, aiming to generate self-employment and strengthen the economy further. Undoubtedly, we envisage immense potential for this segment of clients and thus are formulating plans to penetrate this segment further.

Additionally, 2011 was a very good year for the NBO project and corporate finance portfolio and we were able to garner more than 30 per cent of the loan growth in this segment. We also led the financing for major transactions like aluminium rolling mills for Takamul and were the leading local bank on Sur IPP deal. The success was largely attributable to our holistic wholesale banking approach to clients where we offer a one stop shop for advisory, risk management, transaction banking and corporate

COVER STORY

finance needs. It helps us engage our clients at a more strategic level and better understand their needs. Our ultimate goal in each relationship is to be the preferred supplier of choice and a trusted advisor. Our clients have appreciated our approach and we are pleased to see the results in terms of our marketshare and perception.

The CBO has permitted Islamic banking in Oman. What impact will this have on the Sultanate’s banking sector and what are NBO’s plans in this direction? While the announcement of establishing two Islamic banks in the Sultanate is expected to increase competition in a banking sector which seems to be showing signs of saturation, the move could also help attract funds that may have flowed out of the country in search of Sharia-compliant products. This, in addition to the injection of fresh capital for the establishment of Islamic banks and windows, should boost the ability to meet the country’s growing financing needs. NBO aims to launch an Islamic banking window this year and will provide Sharia-compliant products and services to both retail and corporate customers. The bank will adhere to the highest sharia-compliant measures and also keep the business lines clearly segregated as per the CBO regulations.

Can you share details about your branch and ATM network and are there any plans of upgrading your presence in the year ahead? We have a presence across the country

via 69 branches and 181 ATMs. The substantial expansion plans since 2007 have now culminated in 20 new branches with an equal number of new ATMs in key strategic locations. We are constantly upgrading our branch network as this remains the edifice on which a successful retail bank can run. Similarly, electronic channels are an integral part of our suite of offerings and we have ambitious plans to strengthen them. We are planning to increase our ATM network along with Cash Acceptance Machines. These new machines will accept, as well as dispense cash, and will be placed in key branches/areas, benefiting many customers who would like to deposit their cash post banking hours.

Were there any measures taken by the bank to strengthen its HR practices in 2011?In keeping with the bank’s corporate strategic objectives to recognise the importance of staff, the road map for undertaking Human Resources Strategic Transformation (HRST), was conceptualised in 2011. The entire process began with an initiative to build faith in HR and to ensure seamless communication. The HR Help Desk was introduced and is carefully monitored and analysed on a continuous basis. Under the umbrella of the HRST, various other important activities were initiated. They include:

• Re-organisation of the HR Functional Structure

• Salary review to benchmark

against industry norms

• Audit of HR practices

• Revision and redesign of performance management system, HR policies and grades and associated bands across NBO

In order to ensure a minimal communication gap between staff and management, a bi-monthly HR-Labour Union Forum was established. The formalisation of the HR Executive Committee was another major achievement and an indication of management’s commitment to focus on all aspects of staff matters and their wellbeing. In recognition of the importance of our staff and our ability to assist in fostering their development, a major overhaul of our Learning & Development strategy was also undertaken.

The Phase 1 Human Resources Management System (HR Automation) benefitted the organisation in ensuring smooth operation of various HR processes related to payroll, leave management and administration. The implementation of these modules realised prompt and efficient services, accuracy, and optimisation of resources with overall reduction in processing related paper work.

Can you tell us about the bank’s road map for FY 2012? The bank is looking to sustain its growth momentum in 2012. Our wholesale and investment banking is poised to take advantage of the opportunities created by anticipated government spending. Mortgage and small business lending, card products and low-cost deposit activities will remain the focus of retail banking. Keeping Oman as the country of primary focus, the bank will also capitalise on the UAE franchise as an additional service point for customers. Strong risk management will be a key focal point as the bank embarks on implementation of its strategic plan (established in year 2011), with regard to financial performance, customers, products, processes as well as employees. The bank also plans to launch its Sharia-compliant offering during the year.

2008 2009 2010 2011

Gross Loans (RO ’000) 1,465,464 1,429,117 1,432,369 1,733,688

Customer deposits (RO ’000) 1,341,755 1,260,768 1,324,890 1,599,824

Total Assets (RO ’000) 1,984,480 1,798,213 1,804,904 2,229,072

Non Performing Assets /GL 4.4% 5% 4.3% 3.70%

No of Branches in Oman 57 64 67 69

No of Employees 1,345 1,329 1,306 1,339

Operating Profit (RO ’000) 56,099 49,923 41,987 52,986

Net Profit (RO ’000) 45,380 21,105 27,171 34,202

66 April 2012

Social conscience Oman International Bank extended its support to a number of social and community driven initiatives in 2011 proving its strong connect with society

Oman International Bank (OIB) offers a comprehensive range of financial products and services to the

government, corporate clientele, retail sector and to the public. The Bank has a network of 85 branches in the Sultanate of Oman. In India the bank has two branches and in Pakistan it has three branches. OIB has got an in principle approval from the Central Bank of Oman for a merger with HSBC’s Oman operations. The combined entity would have the scale to be a leading player in the fast growing Omani banking market.

Financial performance OIB’s total interest income achieved for the year 2011 was RO36.83mn compared to RO36.60mn for the previous year. Interest expense reduced to RO6.43mn against RO6.76mn for the corresponding period last year. Net interest income

was RO30.399mn compared to RO29.83mn last year. Other operating income increased to RO11.75mn against RO10.25mn for the previous year. Thus, the total income was higher at RO42.15mn compared to RO40.09mn for last year. The bank achieved a net profit of RO16.51mn for the year 2011, compared with RO17.58mn for the year 2010. The bank’s strategy in India continued to focus on recovery of advances. Indian operations achieved a net profit of RO1.75mn on the back of a major recovery of a bad debt in 2011. OIB is closely monitoring its operations in Pakistan to improve results.

Corporate governance The bank is firmly committed to the highest standards of corporate governance and has complied with CMA, various regulatory bodies and international best practice. OIB has chosen Protiviti to implement the Governance, Risk and Compliance (GRC) portal to enhance its internal

audit, financial controls management, enterprise risk management, IT governance and compliance functions. Protiviti’s GRC Portal is an integrated platform that facilitates a common risk management approach, enabling a sustainable, repeatable and cost-effective governance and compliance programme. The Internal Audit portal was successfully completed during 2011.

HR development The human resource strategies of the bank aims to foster and enrich the staff competence and experience so as to improve productivity. The bank’s recruitment policy provides equal competitive opportunities for all to select the most qualified Omanis. As part of bank’s commitment, the Omanisation ratio stands at 91 per cent which exceeds the Omanisation ratio set by the Central Bank of Oman.

In 2011, the bank offered 260 training courses in various centres, in-house, locally within the Sultanate and abroad, involving a total of 2,573 employees. The bank also received a special recognition from the College of Banking Studies and Finance for the highest rate of participation of any bank in Oman in their courses. OIB is currently in the process of installing 300 new state-of-the-art ATM machines. Currently 212 machines have been imported from a European vendor and the 105 existing ATMs at its branches will be replaced with these new machines in the second quarter of 2012.

2008 2009 2010 2011

Gross Loans (RO ’000) 690,332 685,792 716,836 771,832

Customer deposits (RO ’000) 729,315 729,884 796,958 997,951

Total Assets (RO ’000) 1,018,196 1,039,330 1,155,607 1,249,849

Non Performing Assets /GL 8.9% 10.5% 10.8% 10.9%

No of Branches in Oman 83 83 83 85

No of Employees 1,012 1,043 1,069 1,134

Operating Profit (RO ’000) 27,401 24,822 20,344 18,672

Net Profit (RO ’000) 29,474 21,522 17,585 16,510

COVER STORY

68 April 2012

Best Banks Ranking

MethodologyW

e have considered the growth and the sustainability parameters for the ranking of

commercial banks in Oman. The banks ranking model was done among the leading local banks which include Bank Muscat, National Bank of Oman, Oman Arab Bank, Bank Dhofar, Oman international Bank, Ahli Bank and Bank Sohar. We have taken the period from 2008 to 2011 to rank the banks on the set parameters for growth and sustainability. For the current year ranking process, the newly established Bank Sohar has been included with the completion of four years of operations along with

the availability of data required. During 2010, AhliBank became part of the ranking process.

The data for the survey was sourced from the published financial statements (audited) of the banks, CBO reports and other published reports. Ranking based on growth is done by calculating the compounded annual growth rate (CAGR) of gross loans, customer deposits, fee income, operating profit, networth and net profit during the period from 2008 to 2011. In our ranking model, the operating profit is calculated by subtracting total operating income with the total expenses (excluding depreciation costs). Ranking for

**In case of tie in ranks between two banks, we have considered the size of the bank to decide on the final ranking. The bank with the bigger size of assets would be ranked higher as compared to the smaller bank.

Parameters

Growth

Gross Loan CAGR (08-11)

Customer Deposits CAGR (08-11)

Fee Income CAGR (08-11)

Operating Profit CAGR (08-11)

Networth CAGR (08-11)

Net Profit CAGR (08-11)

Sustainability

Asset Quality

Non Performing Asset to Gross loans (NPA/GL) 4 year Average

Provision Coverage Ratio 4 year Average

ProductivityOperating profit per branch 4 year Average

Operating profit per employee 4 year Average

Productivity

Net Interest Margin (NIM) 4 year Average

Cost to Income Ratio 4 year Average

Return on Avg. Assets (RoAA) 4 year Average

Return on Avg. Equity (RoAE) 4 year Average

sustainability factor was done by calculating the four year average of three key factors like asset quality, productivity and efficiency.

Asset quality was ranked based on non performing assets to the gross loans (NPA/GL) ratio and the overall loan provisions to non performing assets (provision coverage ratio). The productivity is ranked based on the operating profit of the bank to its total number of branches and number of employees. In conclusion, the efficiency factor considers net interest margins (net interest income/average interest bearing assets), cost to income ratio, return on average assets and return on average equity. For the calculation of cost to income ratio, we have excluded the depreciation expenses.

Verification The results of the survey has been verified by Abu Timam Grant Thornton, one of Oman’s leading accounting, tax and business advisory firms dedicated to serving the needs of privately held businesses and public interest entities. The firm offers a full range of assurance, corporate finance, business advisory and tax services. As a member firm of Grant Thornton International, Abu Timam it has access to member and correspondent firms in over 600 offices in more than 100 countries. Abu Timam Grant Thornton was established in 1995 and its managing partner is Nasser Al Mugheiry, a professionally qualified FCCA. He has more than 25 years of extensive experience in statutory audits of various industries, internal audits, advisory services.

COVER STORY

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Bank Nizwa has the distinction of being the first Islamic bank in the Sultanate of Oman. Is this an opportunity or a challenge? Please give some reasons. The opportunity is to be a great bank and the first Islamic bank in Oman. We are bringing Islamic banking solutions to the people in the Sultanate,where previously this wasn’t a choice. We would like to take advantage of being

the first mover. This is good for customers and believing that we will do this right and well, it will also be good for the bank and its shareholders.The challenges are broadly two fold: We are starting a new bank, and also bringing a new form of banking to the market. By way of example, starting a bank from scratch means that everything has to be built and

Sheikh Ahmed Saif Al-Rawahi, Chairman of Founding Committee, Bank Nizwa shares his views on the challenges and opportunities of being the first Islamic bank in the Sultanate and how competition will help in educating the market about Islamic finance in an interview with OER

Off the blocks

Sheikh Ahmed Saif Al-Rawahi, Chairman of Founding Committee, Bank Nizwa

COVER STORY

developed which requires time, resources and a lot of dedication. However, what this means is that we have a chance to build everything just the way it should be, as opposed to being constrained by years of legacy systems and practices. It also means that our people, the most important part of any business, are all new to the organisation and thus motivated and passionate about this new venture, and committed to the vision of the business. We are recruiting experienced bankers in the senior roles, many of them experienced ‘Islamic bankers’ and a good number of Omanis. Across other levels we are recruiting a mix of experienced bankers and other ‘great people’ who are committed to building this ‘great bank’, and are all collectively passionate about building and growing Oman’s first dedicated Islamic bank.

Other challenges include: consumer and market awareness ; developing a distribution footprint and capability that reaches as many customers as possible, as quickly as we can; creating, developing and launching a full range of Shari’a-compliant products to meet the needs of all our customers, and building an integrated top class team of people to execute and manage our operations and deliver top class service to our customers. We know what the challenges are, and are ensuring we bring in the best people and work with the best partners and suppliers. We will meet these challenges head-on and create a great bank.

How much of ground work has been done by the founding committee in terms of human resources, composition of the Shari’a board, systems and processes to get the bank up and running as an when the Central Bank of Oman gives the formal go ahead?A vast amount of ground work has been done. This has been led by our founding committee, working alongside professional advisors and consultants, and more recently our incoming management team.

In terms of human resources we have received thousands of CVs and have undertaken literally hundreds

of interviews. We have identified the entire senior management team for the bank, covering all the key functions, and those who have not yet started will be joining the bank over the coming weeks.

We have identified our Shari’a board, and are finalising the formalities of appointing the members. Once the board members are formally appointed we will be announcing their names to the market. I can confirm that we intend to have four scholars on the Shari’a board of which two are Gulf-based internationally renowned scholars, who have many years of experience in a vast range of Islamic banks, and the other two are locally based scholars. We consider this to an ideal combination of Islamic banking and Omani experience and credibility.

With regard to systems and processes, we are working with specialist consultants and have already developed our policies and high level procedures. The detailed procedures and processes are being developed in parallel with the development of our products and roll out of our core banking system. We have already announced that we are using Path Solutions iMal system, and this work is progressing at a good pace. The other major component of the operational build is branches. We have secured the sites for our first three branches, which will be in Muscat, Nizwa and Sohar, and we are in the process of fitting these out. We have identified other strategic locations across the Sultanate, and will be opening further branches in due course.

What is the capital base of Bank Nizwa, both authorised and the amount that has been raised currently? The bank plans to float an IPO soon; how much stake will the bank be divesting through the public offering? Can you also share a few details about the expected timeline, the lead manager and the money that you expect to raise through the IPO?The total authorised share capital of the bank is RO300mn, of which the paid up capital before the public offering of the shares will be RO90mn. On the IPO the bank intends to raise

further capital of RO60mn leading to a total paid-up capital of OR150mn.

The IPO is expected to be launched during Q2 of 2012 led by the IPO lead manager, Oman Arab Bank. The offer will be open to both Omanis and non-Omanis.

Most banks in the Sultanate are gearing to tap the opportunity presented by the opening up of Islamic banking in Oman? Given such a scenario what makes you confident that customers will choose to bank with Bank Nizwa and not with other established banks.Ironically, we positively welcome other entrants into the Islamic banking market. Islamic banking is new to Oman, and one of our challenges is creating awareness in the market, including consumers and influencers, such as the media and professional advisors, about how Islamic finance principles and concepts under Islamic Shari’a work in Islamic banks. For just one bank this would be a huge challenge, but with many players entering soon in the market we will collectively help to educate the marketplace, which is great for the banks and customers. Right now our interests are fully aligned, only when all customers understand what Islamic banking is and want to use it, do we become competitors. It has always been said that competition is a good thing and it keeps people and businesses on their toes. At Bank Nizwa we are not relying on customers coming to us because we are an Islamic bank. Our objective is to be a great bank, which is also Islamic. To ensure we become a great bank we are committed to high Islamic and ethical standards, business excellence, appropriate use of innovative technology and customer-centric service excellence.

We cannot be confident that customers will chose to bank with Bank Nizwa, it is their choice, but we are going to do everything we can to prove to customers that we are the right bank for their faith and money. In the end it is the customers who will decide if we have got it right.

Following Central Bank of Oman’s formal approval Bank Nizwa, Oman’s first Islamic bank, announced the appointment of Dr Jamil El Jaroudi as its CEO. Ahmed Saif Al Rawahi, chairman of the Bank Nizwa founding committee, commented, “Until we had formal approval from the CBO we couldn’t go public with details of our chosen CEO, but now we can and it gives me great pleasure to announce the appointment of Jaroudi as Bank Nizwa’s first CEO. Jamil brings many years of commercial experience, but even more importantly has strong credentials in both Islamic banking and banking start-ups.”

Jaroudi has over 40 years business experience, and joins Bank Nizwa from Elaf Bank in Bahrain, where he was CEO. Jaroudi started his working life as a consultant with Booz Allen & Hamilton, in the UAE and the Kingdom Of Saudi Arabia, after which he held various senior executive roles with Al Mawarid Group, Saudi Arabia. In the mid-1990’s he co-established the Middle East Capital Group in Lebanon, the region’s first merchant bank with a pan-Arab focus. Subsequent to this Jaroudi held senior positions with DMI Trust, Islamic Investment Company of the Gulf and Shamil Bank, and was involved in the establishment of Arab Finance Bank in Lebanon and most recently Elaf Bank in Bahrain.

Jaroudi holds an MBA from the Ivy League school Columbia University, and a PhD in Finance from Kellogg School, Northwestern University, USA. Among other activities for NGOs and charitable organisations, he is a Board member of the Beirut Islamic University, and a member of the Board of Trustees of the Lebanese American University Institute of Family Businesses. Just recently, Jaroudi was nominated on the governing council of INCEIF, the Global University of Islamic Finance in Malaysia.

Dr Jamil El Jaroudi appointed as CEO

72 April 2012

Broadening its customer base by strengthening its retail operations has been the way forward for Bank of Baroda. This has helped the bank to continue to add the required numbers to its books

Growing on par

Bank of Baroda (BoB), the Indian based bank, has witnessed appreciable growth in its customer base thanks

to its sustained efforts to provide value-added services. “We have been able to broaden our retail base which has led to a substantial growth in opening new saving bank accounts even while the personal loans segment continued to grow. We added around 2,200 new customers to the bank in 2011 as compared to around 1,300 in the previous year,” says Devinder Pal, country head, Oman operations.

Connecting to the Oman Switch ATM network has been one of the highlights of a number of customer-oriented initiatives undertaken by BoB in 2011 and is probably one of the reasons for the increase in new savings accounts. The Oman Switch allows the bank’s customers to withdraw cash from ATMs of any bank in the country except OIB. Pal informs that the bank does not charge its customers any service fee for using the cash dispensing machines of other banks. One more aspect of the bank is its ability as a full-fledged bank to offer all types of services including personal loans, corporate and retail lending facilities, project finance for SMEs.

“Such things have gone a long way in not only helping us to retain our existing clients but in adding the numbers to our customer base,” Pal adds.

Looking at the analysis of the year-on-year growth, the loan and advances of BoB grew by 12.7 per cent while the deposits went up by 5.4 per cent. BoB’s total capital adequacy ratio in Oman is 27 per cent as of December 2011 which means that the bank is well capitalised. Meanwhile, the bank’s allocated capital was increased by 18.7 per cent by way of induction of funds by the head office as well as appropriation of retail earnings in order to comply with the Central Bank of Oman (CBO)’s regulatory norms.

The net interest income increased by 16.7 per cent while net profit show an increase of 4.4 per cent. However, as compared to 2010, BoB’s growth in 2011 was marginally reduced but the bank was able to maintain itself at industry levels. “The banking industry grew at 16 per cent in advances and we grew at 12 per cent,” points out Pal. Talking about growth of the bank in 2012, Pal says, “this year, we are concentrating on the opening of our Sohar branch as we have got CBO approval and we will look forward to strengthening the operations

there. Likewise, the emphasis will be on increasing our customer base. Many of our customers are into trading and contracting activities and our continued support to them will help us in the future. Of course, we are financing projects in other major sectors as well whenever needed.”

BoB began its operations in Oman in 1976 and has become a modern bank with state-of-the-art technology serving every segment of the society in the Sultanate. Customers’ convenience and competition are the key factors driving the bank’s technology.

In the GCC region, BoB is present in UAE through its six branches and eight electronic banking service units and also has a wholesale banking branch in Bahrain. The bank is one of the leading public sector banks in India, committed to the service of individual and corporate customers in India and abroad. BoB has 87 global offices in 26 countries including that of its subsidiaries. In India, the bank boasts of 3,757 total domestic branches and made a net profit of $656.96mn for the nine month period ending December 2011. The total global deposits of the bank was $65,757mn with advances totaling $49,084mn during the same period.

COVER STORY – FOREIGN BANKS

Devinder Pal, Country Head

Oman Operations, Bank of Baroda

74 April 2012

Upbeat prospects

Ravneet Chowdhury, CEO, Standard Chartered Bank

Standard Chartered Bank will continue to strengthen and manage its balance sheet in a disciplined manner, focusing on existing clients and expanding its products portfolio

Standard Chartered has made steady progress on the consumer banking transformation journey during 2011 with this

segment seeing significant growth in loan products, SME and wealth management products and services. The staff number has increased by nine per cent overall which demonstrates its growth as a bank and ability to deliver on its promise to its customer base.

“With a ninth consecutive year of record income and profit, our balance sheet remains in excellent shape; highly liquid, strongly capitalised

and well diversified, and the business momentum has continued both in consumer banking and wholesale banking,” says Ravneet Chowdhury, CEO, Standard Chartered Bank. Continuing further, Chowdhury says that business is doing well as Oman has a good GDP rate. The bank’s consumer banking franchise is expanding rapidly while at the same time, the product side has also been beefed up with new products. This has helped the bank to see growth in new business. The bank has expanded its market by including varieties of cash management products.

Resilient momentumDespite the continued turmoil in

the financial markets, Standard Chartered’s strategy remains the same: Aspire to be the world’s best international bank, leading the way in Asia, Africa and the Middle East and build deep, longstanding relationships with its customers and clients. The diversity of different businesses and geographic markets also give the bank resilient income momentum and enables it to grow even when some markets have a difficult year.

Says Chowdhury, “In each of the last five years, we have increased capital levels, staff numbers, earnings per share and dividends, as well as income and profits. We have a policy of maintaining a strong capital and liquidity position, which enables us to stay open for business and take marketshare through the economic cycle in core areas of business. It should be no surprise that we are the only international bank to have been upgraded by all three major ratings agencies since the financial crisis.”

Expansion plansAccording to Chowdhury, the bank will launch its priority banking services as part of its growth plans in 2012. A third branch is also in the offing and it will be located in Qurum.

The bank continues to develop its local talents through the Al Massar programme which is designed to provide Omani nationals with a variety of tools that will improve their performance and engagement. “Developing the future leaders is a high priority, hence we will continue to train and invest in the Omani nationals inside and outside the bank. We will maintain the highest level of operational discipline and continue to comply and cooperate with the Central Bank of Oman,” Chowdhury adds. Apart from all this, the bank also aims to grow its business with the government sector through SME and wholesale business.

COVER STORY – FOREIGN BANKS

76 April 2012

Catalyst for

growth In 2011, the NBFC industry enjoyed a good run across various segments, with all the six non-banking finance companies in the country performing fairly well and posting good growth on the back of new jobs, salary rises and infrastructure spending, reports Muhammed Nafie

Finance and leasing firms or non-banking finance companies (NBFCs) have been crucial players in Oman’s financial services

industry for the last 25 years, contributing significantly to the Sultanate’s economic development and diversified growth. Today NBFC is a fast growing industry worth RO600mn and with large capitalised companies who are so strong and resilient enough to compete with banks at all levels. They have carved a niche for themselves as the key supporters of small and medium scale enterprises and retail financing in the country.

Though the year 2011could not turn out to be a turnaround year for national economy as expected, all the six NBFCs in the country performed fairly well and posted good growth on the back of new jobs, salary rises and infrastructure spending. The industry enjoyed a good run across various segments, as almost all the companies have performed well in their niche markets wherein they may not be adversely affected by any kind of slowdown at the macro level. In addition, the overall business prospects are bright and positive for them in 2012, with government’s expansionary Aftab Patel, CEO, Al Omaniya Financial Services

fiscal policy and an expected 5 per cent growth in real terms in 2012. “This is a matured market as NBFCs have been in this country for over 20 years,” says Aftab Patel, CEO, Al Omaniya Financial Services. “They are one of the main sources of funds for the small and medium enterprises and continue to be an important driver

for growth. Therefore I think they will remain as one of the strongest financial intermediaries in the country.”

The social and infrastructure spending in the budget for 2012 and the current five-year plan is very promising for the NBFCs. “Responding to the social requirements of improving

COVER STORY –NBFC

living standards and creating new employment opportunities, the government has increased the 8th five year plan expenditure from RO43bn to RO54bn; and majority of this will be in oil and gas, education, health, infrastructure etc.,”says Ajit Engineer, CEO, Muscat Finance Company. “Established companies with proper infrastructure, branch network, skilled manpower and strong financials will be able to capitalise on these opportunities coming up in the next five years. Leasing companies have a role to play in a developing economy, especially in retail and SME which banks would find difficult to address. All six players are fairly capitalised, with reasonable portfolio and all are profitable institutions. ”

Mansoor Mubarak Al Amry, CEO, United Finance Company, corroborates this saying, “Considering the magnitude of infrastructure projects undertaken by the government, the mega projects in the anvil and growing local youth population, the market is expected to provide adequate potential for the sustained growth of the non-banking finance industry in the coming years.”

Adds Robert Pancras, CEO, National Finance, “It has been our experience that any injection of government funds and investment into the economy is good news for the country. We are always looking at and analysing business trends so that we are able to react and offer new products that are clearly able to meet demands from our customers. At heart we remain a customer-focused business with the ability to quickly and efficiently respond to the requirements of our growing customer base.”

Hira Lal Bharwani, CEO of Oman Oryx Leasing Company exudes confidence saying that prospects are bright for NFBCs in Oman in the future. “We are operating on our own niche. This year more jobs were created in the private sector. This will create more opportunities for leasing companies. Oman is much regulated from the physical point of view. Government would not announce projects without

Ajit Engineer, CEO, Muscat Finance Company

ensuring that it has all the proper funding sources available. The increase of oil price coupled with massive spending on infrastructure development across the country augurs well for the development of SMEs and creates a lot of opportunities for the companies.”

Explaining about the prospects for 2012, Patel adds, “The government has taken a lot of measures. A lot of investments have gone into infrastructure development such as roads, airports, ports etc. All of these have created a tremendous amount of economic activity and demand. It will spur more investment activities and the need for more capital and consumer goods.”

As Pancras rightly observes the underlying trends in the non-banking finance industry remain very strong. There will be solid growth in the economy that will stimulate demand for products and in turn encourage individuals and businesses to seek financing for various products. “It is clear that the government’s economic strategy is reaping dividends with new jobs and investment coming into the economy which is always beneficial for businesses such as ours.”

However Bharwani admits that Omanisation has added on to the operating cost of the company. “We

continue to lose our trained resources as people leave to government and banking institutes and we are not getting trained people. The biggest challenge for me is not running the business but retaining resources and hiring staff.”

“After three difficult years since 2008, it was expected that 2011 will be a turnaround year,” says Engineer. “But it was more of a consolidation year. Although Oman is fairly insulated from the vagaries of western economies, some effect will always be felt. However, year 2012 has commenced promisingly, we are very positive on the outlook as we are better positioned to capitalise on the opportunities of economic development in Oman.”

Al Amry adds, “Considering the current market trend and the pace of economic activity the outlook is promising though challenging.”

Paid-up capital The year 2012 will also see the NBFCS gearing up to raise their paid-up capital to RO20mn by June 30, in line with CBO guidelines. Keeping this in mind, Al Omaniya has launched a RO10mn bond issue. It will be 100 per cent compulsory convertible bond of which 20 per cent will be converted into equity each year. It is a five year bond. This will enhance the capital base

78 April 2012

and net worth of the company and its ability to grow. Patel feels that this measure is timely and structured well to meet the CBO guidelines.

National Finance has raised its incremental equity through a rights issue of shares amounting to RO7.5mn to existing shareholders which was completed in February 2012. “This has incidentally increased our paid- up capital to RO25.54mn which meets not only the first target of RO20mn by June 2012 but also actually the next target of RO25mn by December 2016,” informs Pancras.

The board of directors of Muscat Finance has recommended a stock dividend of 20 per cent for 2011, to fulfil the guidelines. This will increase the company’s capital from RO16.80mn to RO20.16mn by March 31. “And the board of directors will explore all the possibilities and select the best way of raising it further to RO25mn progressively over the next five years,” says Engineer.

According to Bharwani, Oman Oryx which currently sits at RO16.775mn recommended a rights issue worth RO5mn to the existing shareholders which will helps the company to increase the paid-up capital to RO21.775mn by June.

To meet the requirements, Taageer Finance has offered rights issue of RO4mn at par in May 2011 and the issue was fully subscribed, according to the company’s annual report published at Muscat Securities Market. The company also proposed to issue stock dividend of 40 per cent by capitalising the share premium reserve of RO3.091mn and the balance of RO1.909mn from the retained earnings.

Foray into Islamic products Although the CBO is yet to issue the guidelines for NBFCs regarding sharia-complied services, most of them are all set to win a bigger slice of the burgeoning Islamic finance pie in the Sultanate. “I don’t think the Islamic banks will affect the profitability,” says Patel. “On the contrary, they will bring a new dimension to the financial structure. It creates wider choices for individuals and corporates. And as and when the central bank issues guidelines, Al Omaniya, as the biggest NBFC, will be there.”

Muscat Finance is also waiting CBO’s regulations for Islamic financing as it is positioning itself to launch the Sharia-complied services. “Islamic banks are not likely to affect the profitability of the NBFCs,” says Engineer. “Even the Islamic banking has their own way of financing and

Robert Pancras, CEO, National Finance

generally in retail and SME the leasing companies are better positioned. Despite the presence of a number of commercial banks, we were still able to make good progress and provide a handsome return to our stake holders in the last 24 years. In addition, Islamic banks may be a source of funding for us as we would be able to obtain funding from them also.”

Bharwani says since leasing itself is an Islamic product, the emergence of Islamic banking services holds a lot in store for the leasing companies. “We have a sharia- complied derivative of leasing which we have launched,” he adds. However Robert struck a precautionary note saying, “The emergence of Islamic banking is set to have an impact in the overall banking. But in a market such as Oman it also appears that this will soak up a considerable amount of untapped demand in the market. We continue to remain focused on improving the basics, customer awareness and unwavering focus on improving our quality of services.”

At the top In 2011, Al Omaniya maintained its number one position among other players in size, market capitalisation, net worth, earnings per share, profit per employee, cash dividend, revenue, the quality of assets etc.

“Al Omaniya has emerged as the biggest nonbanking finance institution in Oman sometimes back in 2008,” says Patel. “In 2011 also we maintained this. And our nonperforming loans are lowest among all the banking and nonbanking finance companies in Oman. Even when compared to the banks, ours, at just above 1 per cent, is the lowest. We compete with the banks in almost all the products such as working capital, project finance, bridge loans, loans for construction of factories and warehouse, car loans, equipment financing etc. In certain segments especially the smaller SMEs, the leasing companies compete with us and generally banks are not present in this segment.

COVER STORY NBFC

Patel ascribes this success to the way the company has structured it business. “Our business model, strategies, processes and systems, products and the way we deliver these products and services all make a difference enabling us to have the best possible customers. It has to be embedded in your process, system, strategy and business model. It is only when customers choose you in preference to other players, you can emerge as a leader.”

A steady playerFor Muscat Finance, which celebrates the 25th anniversary in 2012, the year 2011 was satisfactory in terms of growth in assets and profits. “We posted 4 per cent growth in assets and 6 per cent in net profit which went up to RO3.57mn,” says Engineer. “The results were fairly satisfactory in a difficult year. Though there were little disruptions in the first half, the second half picked up well. Government’s focus on social development helped in asset addition and created immense financing opportunities for us.”

Referring to the performance of the company vis-à-vis other players in the industry, Engineer adds, “We have been a steady player. We always had a

conservative approach since inception and grown our portfolio and profits consistently over the last 24 years. Although our assets are not the largest, many of our ratios in terms of profit and return on assets and equity and earnings are superior in the industry.

However he believes that consistency is an important yardstick to gauge the success of a company of Muscat Finance’s stature. “We have an enviable track record of consistent profits and distribution of dividends since inception. This year we are entering the silver jubilee of our company. We are one of the first two companies licensed in Oman in 1987. Our track record is 25 years of consistent performance, a legacy that not many competitors can claim.”

MFC has also managed to reduce its NPA substantially to RO9.7mn from RO13mn. “Hopefully, it will reduce considerably in the future. We have got an external consultant to look at our risk policy and we have reviewed the risk parameters, tightened the norms so that the quality of assets is improving.” He believes that the ongoing infrastructure projects commenced earlier and new contracts

Hira Lal Bharwani, CEO, Oman Oryx Leasing Company

awarded in the last quarter of 2011 will open up promising opportunities for MFC, as earthmoving equipment and other construction and infrastructure related equipment will be used in these projects. “In the silver jubilee year we have rejuvenated ourselves. With a refreshing new logo and colour theme and bold lines, we are looking to consolidate our established brand,” avers Engineer.

On a sound footingThe year 2011 was very important for National Finance as the year when it passed RO100mn milestone in finance leases for the first time. In addition, the year-on-year profit has grown by 52.1 per cent to RO3.546mn. Pancras says that the growth was driven by a combination of increasing demand for car loans with the expansion of the economy and consequent creation of jobs and also increased customer acquisition in the rapidly growing SME sector.

“We are confident about the year ahead and the ability for our business to achieve further growth – helped by growing demand for our product portfolio; and what National Finance believes is very solid and favourable conditions in the wider Omani economy.”

The total earning assets as at the end of 2011 amounted to RO107.52mn of which the bulk pertained to finance leases; and the company has substantially improved its working capital assets. National Finance has three main sources of funds: shareholders net worth, banks loans and corporate deposits. “The third category deserves special mention as corporates with surplus funds are increasingly finding us a more suitable vehicle to park their surplus liquidity at attractive returns,” adds Pancras.

Referring to the NPA of the company which stands at RO6.5m, Pancras says that ensuring efficient collections is a key success factor in the business. “Given that we operate in a riskier segment than banks, having a tried and tested collections team which knows

80 April 2012

what to do is a tremendous comfort, particularly in volatile times. Our portfolio performance over the recent past has been one of the best in the peer group which is a result of good credit decision making coupled with an effective collections backbone.”

Record profit Oman Oryx has registered its best ever profit growth in 2011. “We have got many record numbers during the year,” says Bharwani. “However, we have not been that aggressive and continue to remain conservative as usual, as exemplified by our finishing sixth in balance sheet; but in return on equity we will be number three or four.”

Bharwani attributes the rise in profitability to various businesses started the previous year. “It was a good year because the economy did very well. Our business is fundamentally vehicles and commercials. All the new projects announced recently will result in asset procurement in the market. So we expect a good year.”

In 2011, Oman Oryx’s operating asset was RO63mn with an increase of 15 per cent. Its return on equity went up from RO12.11mn to RO12.60mn whereas the infected portfolio went up from RO2.73mn to RO2.848.

Explaining the future outlook of the company, Bharwani adds, “We are working on expanding our product range into softer loans, medium term loans and some kind of guarantee business. But these products are fundamentally riskier than pure core businesses. So even if we have these products with us, it will give us kind of an incremental business.”

Bharwani says Oman Oryx has the lowest write-off in the market and is number one or two in manufacturing portfolio and its credit guidelines are very tight.

Consistency matters United Finance which commenced operations in January 1998 with a paid-

Mansoor Mubarak Al Amry, CEO, United Finance Company

up capital of RO5mn has expanded its presence across the country with seven branches at Barka, Firq, Ibra, Ibri, Mawaleh, Sohar and Salalah in addition to its head office in Muscat. As of December 31, 2011, the company’s net worth stood at RO34.9mn. The UFC has over the years increased its asset base by growing its net finance debtor’s book to RO79.33mn. This was backed by resource mobilisation through ploughing back of earnings and prudent gearing.

Says Al Amry, “UFC’s performance during 2011 was encouraging. The company recorded a net profit of RO2.85mn for the year 2011 as against RO1.09mn in 2010. The loan portfolio also registered a modest increase from RO72.32mn to RO79.33mn. The main factors contributing to improvement in profitability during 2011 were reduction in interest cost and overheads coupled with decrease in impaired loans.”

Referring to the measures to reduce non-performing loans and curtailing disbursements in 2011, Amry adds, “Reduction in non-performing loans was achieved through consistent efforts on the recovery front coupled with tightening of credit norms to mitigate the incidence of defaults from fresh loan disbursements.

However Amry admits that the UFC does not have any plan to venture into new product areas. He also informs that going by the prevailing market conditions the company does not expect any appreciable increase in lending rates in 2012 if other factors affecting interest rates remain the same.

Promising performance Taageer Finance has registered 8 per cent growth in the lease portfolio during 2011 over the previous year, according to the annual report. The profit after tax (PAT) for 2011 stood at RO3.216mn with an increase of 30 per cent compared to the figures in 2010. The report attributes this profitability to decrease in borrowing costs and increase in gross income. Due to general improvement of market conditions, the company maintained its growth targets within the prescribed lending guidelines. Taageer company continues the policy of creating and strengthening the general provisioning and has provided RO1.117mn towards loan impairments during the year. The cumulative provision as at Dec 2011 stands at RO 4.649mn.

In short, all the six NBFCs made significant gains in the last fiscal year with solid and stable performance and started the New Year on a very bright and optimistic note.

COVER STORY NBFC

82 April 2012

“An animal’s eyes have the power to speak a great language,” famously said Martin Buber. Our relationship with dogs goes deep in the history of human civilisation. Dogs are the only domesticated animals that not only are a loyal companion, but also perform a vast array of jobs such as guarding houses and properties, sniffing out explosives, guiding people etc. The loyalty and unconditional companionship provided by dogs have proven to be even therapeutic, and researchers have countless studies showing they can help to improve the quality of life for many, by lowering stress, alleviating loneliness and improving health through exercises.

Therefore it is not a surprise that keeping dogs as pets is on the increase globally. The flip side is that as families are working longer hours and travelling more often, dogs are required to adapt and learn to cope. Although some dogs can naturally adjust to new situations, many can develop behavioural issues or bad habits or manners. As a result, more people are seeking professional

help to assist them in raising a new puppy or resolving the behaviour problems of an adult dog.

Canadian Jebel, Oman’s first professional and registered dog training services centre, offers luxury kenneling and multipurpose training facilities for the canines in the Sultanate. Run by Alfa Vold, a certified master trainer, assisted by a well-trained staff, the facility provides a wide range of canine services from basic obedience training to intermediate and advanced levels of training. It is equipped with spacious kennels with flaps that separate an outdoor run from their indoor air-conditioned area. Other services offered there include group classes, private training, and in-house training in which dogs are taken for minimum two weeks to provide training depending on the special requirements of their owners.

Closer bond“One of the best things about our line of work is the opportunity to

improve relationships– a closer bond is always more easily attained once a relationship has formed, says Alfa Vold. “We communicate through gestures, facial expressions, eyes, posture; and when we do speak our tone of voice can indicate our thoughts and moods. Dogs also understand this; they communicate through their senses and body language and are experts in reading us and communicate with us constantly.”

Vold says dogs are one of the best problem solvers of the animal kingdom. “They learn from their experiences, through negative and positive reinforcement. If they find a desired behaviour benefits them, they quickly learn it is good for them to repeat that behaviour. It is our job as their trainer/owner to guide them to the correct response and to be liberal with our praise and reward when they do so.” Vold also stresses that training will bring a closer bond between the owner and the dog and that dogs are usually less anxious and more content generally.

Bringing dog training to a new level

Canadian Jebel, Oman’s first full-fledged, registered dog training services centre, offers a wide range of canine services from basic obedience to intermediate and advanced levels of training. An OER report

COMPANY PROFILE

Oman’s own dog training center,conveniently located in Bousher.Call today on 99419595 or 97376828or email on jebelk9@telus.netfor more information on training and kenneling services.

BRINGING DOG TRAINING TO A NEW LEVEL

84 April 2012

In a league of its own A mix of unique programming, partnering community based social initiatives and creating innovative solutions for advertisers has helped Al Wisal and Merge FM to establish their clear leadership in the Sultanate’s market

throughout the day or they are formal and serious. We try to strike a balance between these two extremes.” Keeping this in mind Al Wisal and Merge’s programming includes entertainment, sports and weather updates, news, information on the traffic situation, happenings and events around town, social messages, tips on personality development and solutions to everyday problems. Programmes like Chris Fisher in the Morning, the Muscat Drive with Sayeh Stone, and the Lunch Break with Rumaitha, have helped Merge FM, which launched on June 7, 2011, to garner a large market share in a short span of time.

The sequence of programmes through the day reflects the time and mood of the listener. For example, the morning programmes are targeted towards people driving to work and parents dropping their children to schools. The stations give valuable tips on getting better at work, how to raise a millionaire child, negotiating homework better etc. The drive home programmes in the evening are lighter with a lot of music and entertainment, as it is a time when listeners are looking to unwind after a hard day at work.

The programming mix is also attuned to the target audience of these stations. For example, Al Wisal’s primary target group (TG) is Omanis in the age bracket of 16-45 years. The secondary audience being Arab expatriates. In the case of Merge the target audience reflects Oman’s demographic mix and includes English speaking Omanis and, the Asian community, then, Europeans and other expatriates in that order of preference. The station has worked on creating content based on a strong local insight coupled with an international flavour.

Merge has already won multiple awards as recognition of its strong identity and branding. It picked up a top marketing award at the prestigious Gemas Effies Mena Awards 2011. On the eve of its launch, the station got two silver awards at the coveted advertising Lynx Awards 2011 (part of the annual Dubai International Advertising Festival), for its unique

MEDIA

Radio advertising in Oman has increased from RO1.94mn in 2010 to RO2.17mn in 2011 – a jump of close to 12 per cent

(Source: IPSOS STAT). This increase is largely attributable to the success of Al Wisal 96.5FM and Merge 104.8FM, the Arabic and English radio stations from SABCO Media. Says Eihab A. Abutaha, CEO Communications, SABCO Group, “Third party statistics shows that we have been growing strongly in the radio market. Al Wisal has established itself

as an integral part of the community and this has helped in making it the No.1 radio station in the Sultanate. Merge 104.8 since its launch in June 2011, has seen unprecedented growth.”

There are a number of reasons that account for the runaway success of Al Wisal and Merge. The foremost being their programming and content. Says Nadim Attieh, Station Manager, Al Wisal and Merge, “If you listen to the radio stations in Oman, they are either purely entertainment focussed

Eihab A Abutaha, CEO Communications, SABCO Group

corporate identity and relevant to its image stationary design.

Community tiesAl Wisal and Merge FM’s other big differentiation is its close ties with the community. Says Eihab, “At SABCO group, we are clear that our businesses should contribute to the socio-economic development of our nation. This is our vision, and this is what we strive for at all times at SABCO Media. Value and financial success comes as a by-product of how we deliver on our promise. Keeping this in mind our radio stations provide a service that is aimed at educating, informing and entertaining listeners.”

To bridge the gap between the people and the government, Al Wisal started a programme called “Muntada Al Wisal” a year back. This daring but relevant show became an instant success. Today, Muntada Al Wisal is by far, the number one show between the hours of 2pm and 4pm. Today, “Muntada Al Wisal” bridges the gap between all segments of our society, by having an open platform of communication and respect.

Al Wisal and Merge’s social conscience is also reflected in the number of Corporate Social Responsibility (CSR) programmes that they have been involved with. In 2009, Al Wisal did a CSR campaign for kids suffering from cancer, asking people to donate things that would make such children happy. The station put 14 boxes at Nawras stalls across town to collect donated items. The campaign met with an overwhelming response with thousands of boxes with toys, movies, music, books and so on being donated.

In 2011 Merge FM, supported high-profile campaigns like the hugely successful Box Appeal with the Radisson Blu and the Dar Al Atta’a ‘One Rial’ Ramadan campaign. The two radio stations have partnered with campaigns and events of national importance like the Muscat Youth Summit, Safe Driving campaign from the Royal Oman Police etc. Such tie ups engage and add value to organisations

that help communities and the needy. Moreover, they also bring these media vehicles closer to the people.

Empirical evidenceA combination of smart programming, targeting the right audience and being closer to the community has enabled Al Wisal and Merge to emerge as leaders in their respective media categories. This was borne out through an independent survey carried out recently at Sultan Qaboos University (SQU). The survey measures brand equity, perception and loyalty. Students were given a blank sheet of paper and asked to rank various radio stations on these parameters. Al Wisal came out as the unequivocal No.1 in the survey, it had actually got more votes than Hala FM and Shabab Oman put together.

Eihab raises an important point regarding skewed and biased market research that portrays certain media in a negative light. Says Eihab, “We do our own research and track the market. Our research is different from the self adopted research done by certain media houses or publications in Oman. The core competence of these publications is not research. Secondly, how can one media house do research and judge another media. To give an example, a recent survey by a business publication used a sample size consisting of 90 per cent expatriates to pass judgement on radio stations in Oman. This is a glaring example of flawed research and the use of unrepresentative data, as over 75 per cent of the country’s population is made up of Omanis. The chosen sample audience has no relevance to the country’s demographics or even pyschographics and hence such research and surveys have no credibility or relevance.”

The growing popularity of Al Wisal and Merge’s online radio listenership is another indication of their prominence and popularity. Says Nadim, “Most radio stations struggle to get people to listen to them for more than one and a half hours a day, but our online listeners spend close to two hours tuned in to our radio stations.

Nadim Attieh, Station ManagerAl Wisal and Merge

This shows the loyalty that we have created amongst our audience.”

Social media provides another good metric to measure the popularity of radio stations. On Facebook, Al Wisal has 3,045 likes, compared to Hala FM’s 378 likes (as of March 21, 2012). Merge has garnered 3,197 likes in nine months, compared to Hi FM’s 5,656 over the last four years – a reflection of the ground that Merge has covered in short span of time.

Says Eihab, “In terms of advertising we are listening to our clients and what they want. We are going through the process of creating awareness on how radio can be used strategically, and this is being appreciated, most of the time. The other big advantage with our stations is that we own our advertising space and have not contracted it to a third party as some of our competitors.” Al Wisal and Merge treat advertising as a part of content helping them to weave ads into their programmes seamlessly, creating more value, for clients. Not content on sitting on its laurels Al Wisal and Merge have drawn up ambitious plans for 2012 and beyond. These include – creating stronger content, being closer to the community, offering creative solutions for advertisers and expanding geographically, locally and regionally. Once executed these initiatives will surely place the two stations leagues ahead.

We needTrend-breakers.

In association with

Ministry of Environmentand Climate Affairs

Ministry of HealthDept. of Environment & Occupational Health

While many have long preached the importance of a sustainable environment; we now look forward to hearing from organisations and individuals who have put their belief into action.Nominations open for Green Initiatives that can inspire sustainable measures for a greener environment.

environment.OMAN GREEN AWARDS 2012 - Oman’s leading platform that brings together socially conscious private and government institutions to recognise and reward green initiatives that inspire the nation to action.

You could nominate your own initiative, your organisation’s initiatives or any individual’s initiative.

What’s your claim?

5 June2012

An Initiative

For nominations please log on to our website or call 24700896

For partnership enquiries please call Ahmed 99356490

Nominations closeon 10/04/2012

Under the auspices ofH E Mohamed Al ToobiMinister of Environment and Climate Affairs

www.omangreenawards.com

88 April 2012

PERSONALITY

Can you give us a brief background of your educational and professional background? The company started in 1984, while I was in the US doing my graduation in Economics from Capital University in Columbus, Ohio. I was on a government scholarship and joined the University project when I came back, then they immediately sent me to do a masters from Marymount University in Arlington Virginia in 1985-86. I got my MBA in 1986 and came back. I was one of the people who started the University (SQU) Hospital. From 1987-1994, I was the director of Administration and Finance at the University Hospital and then I was shifted as the director of Coordination and Follow Up in the Vice Chancellor’s office, where I was posted between 1994-1998. I became the pro vice chancellor of Administration and Finance for SQU, including the hospital from 1998-2002. I continued as the advisor to the Vice Chancellor till 2008.

In 1986 we got a franchise from a US company called Service Master. Al-Nab’a was established as Al-Nab’a

Services and converted into Al-Nab’a Service Masters. This was between 1986 till 1997. US companies take a royalty from the turnover rather than the net profit and this was proving to be a burden. The economic conditions in the early part of the 1990’s was not that good, and so we came to an understanding with Service Master that we will terminate the contract. Originally the contract was for 23 years but from 1997 we started working independently.

At that time, the company had a house-keeping division, pest control, waste management and general maintenance service. The real growth of Al-Nab’a came after 2001 and since then there have been times when we have grown by 30-40 per cent a year. A big factor for this was the fact that I started to concen-trate on the business full time. In 2007 we started Al Nab’a catering, and while this started to serve our own camps, soon we started taking contracts from outside. Al Nab’a Catering has grown phenomenally and today the company has a turnover of nearly RO4mn with a staff strength of almost 500.

Sayyid Khalid Bin Hamed Bin Saif Al Busaidy, Chairman, Al-Nab’a – Holding shares his inspirations, management style and reasons for his success with Mayank Singh in an exclusive interview

A METICULOUS APPROACH

In 2008 we converted the general maintenance division into a construction company and till now we are doing our own projects, like labour camps, buildings etc. Al-Nab’a construction has a strength of almost 400 people. The group as a whole has over 5600 people, in 2000 we had just 1,000 people. We have recently converted the company into Al-Nab’a infrastructure, as we wanted to expand and go into other areas other than civil contracts. In infrastructure we have a joint venture with C&C of Delhi, BSCPL from Hyderabad and as a consortium we are working on getting a road construction or infrastructure project. At Al Naba Equipment & Supplies, we are distributors of a number of other brands like ‘Beldos-Portion Control Equipment’ from Belgium, ‘Kromluks-Kitchen/Laundry/Hospital cooling equipments from Turkey, Automated Chapatti making machines from Neoconept – Delhi and Coimbatore Kitchens from Tamilnadu, India.

You have a strong background in HR and finance, has that helped you in your business?Both my management and finance background have helped me. Internal audit and finance are the backbone of any organisation. If you have strong internal audit and planning you can have a really good business. A long term stable and steady business requires two main things –one, a strong management system in terms of policies and procedures plus reporting systems for every unit of the business. Secondly, you need highly professional people to run that system. Neither one can be successful without the other. That’s the reason why I have insisted on ISO certifications; HACCP in the catering business etc.

We got an ISO certification in 2008 and became the first company to have such a certification in the facility management business. To ensure the long term sustainability of the business we established Al-Nab’a Holding in 2008. The Holding company was established in 2008 to look after the whole group, management control, diversification, new business

opportunities etc. I have opted for a Board of Trustees to oversee the company, compared to a Board of Directors. A management consultant Finteq Enterprises, Kolkata, India is assisting us in improving this system.

Why have you opted for a Trustee based succession system in place of a Board of Directors?My children are still at the University level and if God forbid, anything untoward happens then this Board of Trustees will take care of the business till they are ready to take over. Our legal advisor also sits on the Board of Trustees. The executive management, assistant general managers, the legal advisor and the management consultant meet every quarter and review strategic issues.

Facility management is very labour intensive business with a high HR turnover? How do you manage the business?One of the main challenges that we face is the turnover of manpower. You recruit people, train them and put them on the job, if someone leaves suddenly, then it requires us to go through the process all over again. In this kind of a business the turnover is relatively on the higher side. To counter this we have a very strong recruitment team, who work on getting replacements soon and there is a system in the pipeline. The other way of retaining people is by giving them better facilities and fringe benefits like good wages, overtime, accommodation, food and medical facilities.

How would you describe your management style – is it participatory or centralised?I believe in two or three things – putting in place a good system, identifying highly professional people, and then giving them the authority and responsibility, so I believe in decentralisation of authority. Secondly, I like being transparent, we discuss ideas in a very open way and then come to a decision.

You have built up Al-Nab’a from scratch. What accounts for your success and

is there anyone from whom you have learnt a few things in life?On the personal front, I have learnt a lot from my father, Hamad bin Saif al Busaidi who was a great scholar and he taught me a lot of good principles in life like having respect for people and the importance of relationships. Second, is commitment, once you commit yourself then you need to do things and that’s the reason why I am committed to the business to satisfy God, myself and the people around. From a management point of view I learnt a lot from my late father in law – Sheikh Saud Bahwan, the founder of the Saud Bahwan Group and one of the most successful businessmen in Oman and HE Mohammed Zubair, as he was my boss at the University as the Vice Chancellor. I learnt the importance of commitment, achieving your targets, hardwork and the importance of time from these two business leaders.

What is your advice to youngsters in Oman?First they have to be honest with themselves in whatever they want to do, whether it is education or work and they need to be committed. Once they have committed to do a thing then they have to do their level best to achieve their goals. This will help them and the society as a whole. To achieve this would require extreme hardwork. As Indira Gandhi, the late prime minister of India said, “The harder I work the luckier I get.”

What are your future plans for Al-Nab’a Holding?We have set our sights on diversification and this is happening in two ways. We have established a branch in the UAE, so we are diversifying geographically, whether it is for facility management, trade or catering services. After establishing ourselves in the UAE we will go to Qatar in a big way. We have a small office in the UAE and Saudi Arabia, but we want to strengthen our presence in the UAE. We are also looking at getting into an industrial joint venture with good manufacturing companies as this may be good for us in the long run.

90 April 2012

“Oman like any other country needs to review its education system in line with a clear vision as to what skill sets would we need for the next 20 to 30 years. We need to be able to compete globally and not just locally,” says Malak Al Shaibani, General Manager – HR Solutions, Talent2. She will take part as a panelist in Oman Forum – Building National Talent. Excerpts of an interview

Change the mindset

How important is the school education in building national talent? Do you think the current school education system is able to achieve its purpose?The education system of any country consists of school or basic education and tertiary or vocational education as an integrated building block for national talent. One needs all these to prepare national talent in any country.

As for basic education or school that is the first building block and like any country that competes globally we need to review it in light of global developments and requirements of new skills in the economy. Malak Al Shaibani, General Manager – HR Solutions, Talent2

HR

What type of competence do we want a high school graduate to have? How are our kids performing in maths and science and in reading and writing Arabic and English? If we look at vocational or technical training or even university education, are we meeting the requirements of the market? Do we have the skill pool that will attract a multinational corporation to set up in Oman and look at Omani talent as one of the key competitive advantages? Why is it that countries such as Singapore constantly score high when it comes to students’ performance?

Our institutes of education at all levels need to set benchmarks so that we could identify where we are, where we want to be and what needs to be put in place now to reach that goal.

In my opinion Oman like any other country needs to review its education system in line with a clear vision as to what skill sets would we need for the next 20 to 30 years. We need to be able to compete globally and not just locally.

What is the mindset of the corporate sector as far as incorporating best HR development practices in the overall business planning processes? What change you have observed in their HR planning and development practices over the years?The mindset of the private sector with regard to best HR practices has a long way to go. It starts initially with understanding the role of human resources and its strategic importance for any company. I am afraid many companies in Oman still practice personnel management which is basically a focus on the administrative tasks or transactional tasks of human resources such as attendance, payroll, leave management etc. In such companies, the HR role is limited and carries very little weight and it can therefore easily report to finance or any admin function. What typically happens is the individual appointed to run HR is not qualified. I have seen companies appointing PRO with high school

diplomas to these positions merely to comply with the labour law. In the process, they are being unfair to the individual and sends a clear message what they think of their human resources. Other companies have grown a bit further and also have a training element attached but still the understanding is that HR manages the people of the organisation and resolves employee issues.

Once again this is a limited role. There are only a few companies who are now recognising that HR has to play a strategic role and has to report to the CEO. These companies are in a transition mode but tend to support and introduce best practices and are advanced in some areas but need development on others.

However, best practices in HR is a journey and it takes time and needs a champion CEO, able and willing to do this. It is funny that leaders talk about human resources as the most important element while their actions or decisions are to the contrary! In a nutshell, very rarely is HR configured in the planning process. If it is, it is usually part of the budgeting process where one needs to plan for extra heads or salary increases.

Do you think the inhouse HR divisions within the private sector companies are competent enough to setup and implement effective HR development and training processes in place? What role can be played by independent HR consultancy firms in making them achieve this objective?

I think HR professionals are very few and far in between but what I have noticed is that good companies who understand the significance of HR are willing to seek the best and put in place the best practices.

I think more and more companies are realising that if you get your human resources wrong you can still function but it can come back and bite you and it will cost you financially as well as spoil your reputation. Therefore there is progress at least in understanding something needs to be done. However, the issue is what, when, by whom and for how long?

There are companies in the private sector specifically those in the oil and gas sector and financial services who are at the forefront of HR practices. However, one needs to be careful and customise what can work in Oman. As I said it is a journey. Consulting companies can help if they can customise a solution for a particular company. There is a danger when consultants come in to introduce the best.

Either it cannot be implemented or there is no knowledge transfer in the process. As a consultant, one has to have the honesty and integrity to even turn down business if it is not going to work. The danger comes when too many HR changes are introduced at one go causing instability and what I call ‘the flavour of the month syndrome’. In such cases, consultants get their money and management loses credibility. It is extremely important that the best HR practices should have support from the board level and the CEO. There is ‘buy in’ from the key stakeholders in the company and more importantly, they are introduced at the right time.

Finally what is more crucial is that the HR best practices have to be part and parcel of the that organisation’s vision and objectives so improvement is also measured in people’s performance and can be linked to the bottom line; if that cannot be proven, no one will do it.

I have seen companies appointing high school diploma holders as PROs merely to comply with the labour law

92 April 2012

National Training Institute has invited nominations for the sixth edition of NTI BizPro Awards

Creating a legacy of excellence

The sixth edition of National Training Institute (NTI) BizPro Awards 2012 was announced earlier this year with an aim

to acknowledge and reward Omanis who have shown creativity and revolution in pursuit of excellence in leadership skills. The awards promote the important achievements of Omani business professionals in the private sector. However, the message for the Awards this year has a wider focus that includes the society as well.

The guest speaker in 2012 is the social awareness campaigner, Yuthar Al Rawahy, founder and chairperson of the National Association for Cancer Awareness (NACA). Yuthar is a three-time cancer survivor, who has dedicated her life to promoting awareness, advocacy and research to enable early diagnosis and treatment of those suffering from cancer in Oman.

“Sharing one’s good fortune with society – as business leaders and as organisations – contributes positively to building strong, credible brands, as well as a sustainable and loyal customer-base,” says Lawrence Alva, CEO, NTI. The NTI BizPro Awards will have two categories; Business Leader

Award and Young Achievers Award. He continued, “The main objective of these awards has been to reward and promote the achievements of the Omani Business Leaders and Young Achievers by acknowledging their contribution to the corporate sector in the Sultanate”

Promoting achievements The main objective of these awards has been to reward and promote the achievements of the Omani Business Leaders and Young Achievers.

To be eligible for the nomination for the Business Leader Award the person should be an Omani national, employed at a senior management role and must have made substantial contribution to the organisation and society. “The corporate sector and the media play a very important role in the growth and development of a country, therefore nominations are invited exclusively from the Top 50 businesses and the media fraternity for nominating three leading business personalities from Oman,” said Poonam Sonakia, operations manager, NTI. To be eligible for the Young Achievers Award the nominee should be in the age group of 25 to 35 years,

EDUCATION

and have a minimum 5 years of work experience. The nominee should also have management aptitude, leadership qualities and effective communication skills and should be able to train, support and encourage team members. KPMG in Oman, a leading provider of audit, tax and advisory services evaluates the candidates. All the nominations are received and reviewed directly by KPMG.

Source of inspirationBizPro Young Achievers Award is an endeavour to be a true source of inspiration, motivation and encouragement for Omani youth.

Under Young Achievers Award the award committee filters down business professionals from hundreds of nominees. The selected participants will then participate in screening management aptitude test out of which 12 finalists will be selected. Based on the assessment done by the award committee three finalists will be chosen as winners. Under the Business Leader Award the finalist will be selected based on the nomination count per nominee. KPMG will invite additional information from all finalists and a panel will select the winners based on nomination information and additional information received from finalists.

Scholarship The winner of the Business Leader Award will receive a scholarship of Rial RO5000 for developing leaders in their organisation while each of the winners of the Young Achievers Award will receive a scholarship of RO2500 to enhance their management education. Both the scholarships will be sponsored by Renaissance Services.

Details on the eligibility, nomination and evaluation process for NTI BizPro Awards 2012 for Young Achievers and Business Leaders are available at the website, www.ntioman.com/bizpro.shtml.

www.omanprogress.com has the most coprehensive chronicle of Oman’s progress while maintaining the same

cutting-edge editorial standards. In-depth content, high-end interactive features combined with enhanced user

functionality keep you abreast with the nation’s development as it happens when it happens.

Easy search Access to archives Regularly updated information Ongoing improvements in design

Direct hyperlinks to organizations websites and e-mail addresses Quick reference to advertisers index

Oman’s Progress is online

www.omanprogress.com

94 April 2012

Zubair Automotive Group General Manager Serdar Toktamis looks at how a healthy automotive sector in Oman is a positive sign of economic growth and prosperity

Healthy car sales= healthy economy

It is often said that the car industry can be one of the most reliable barometers of economic prosperity and success. When sales are up – it is a pretty sure

sign that the economy is moving ahead and there is a real air of confidence among the consumers and of course the opposite can be just as true as well.

But in Oman, and increasingly across the whole of our region, the barometric pressure is getting higher every day thanks to new economic initiatives, well planned government investment and the benefits of a healthy oil price. New job entrants into the market, rising salaries and an underlying sense of confidence are now actively stimulating the automotive sector for 2012.

Exciting region for global automotive manufacturersThe Middle East region has seen some of the sharpest rises in GDP growth in the world over the past decade and a corresponding rise in personal wealth, that when combined with

low gasoline prices, has made the area an increasingly vital market for manufacturers. Models are now being developed with an eye on the Gulf, and Chrysler Group Middle East for example has recently conducted thermal testing programmes specifically with our region in mind as climactic conditions and vehicle usage differs greatly here from any other market in the world. And in a region where the bulk of the population is under 25 and with tens of thousands of young drivers entering the market every year, there is clearly enormous growth potential for the future – a fact that is now clearly recognised by the major global car manufacturers.

The Middle East has traditionally been dominated by Japanese manufacturers but the vital importance of the region is reinforced by the very strong initiatives from both European and US brands who are aggressively seeking ways to improve and enhance their share of the market. I think there is little doubt that we will seek fairly substantial gains from the US and

European manufacturers across the Middle East in the years ahead.

Global events impacting global playersThe automotive industry of the 21st century meanwhile is a truly global phenomenon. And that means no one is immune to situations such as the global economic slowdown of recent years or natural disasters such as the earthquake and subsequent tsunami in Japan. As a highly interconnected business what happened in Japan affected non-Japanese producers who could no longer source specialist paint colours; for example impacting producers in both Europe and the US, in addition to the direct manufacturing issues that struck Japanese producers.

It has also meant that as a global industry every major manufacturer establishing local production facilities around the world – with European brands such as Volkswagen for example setting up facilities in China solely for Chinese demand and in Mexico and the USA. It means supply

AUTOMOTIVE

chains are significantly reduced, companies can benefit from well priced skilled labour and it can also protect them against currency fluctuations.

Vibrant automotive marketWhen you consider that just over 40 years ago there was less than 20 kilometres of paved road in the Sultanate, it is quite extraordinary how the infrastructure and modern highway system has grown and developed in such a short space of time. What has also changed dramatically over four decades is the profile of the Omani driver. Today an Omani in his mid 20s is looking for something totally different to his father – who would have been more conservative in his choice of vehicle opting for practicality, family comfort and economy over style.

In the internet age however young Omanis are now looking for something highly individual – and they are influenced by design, style and how the car looks – approaching it far more from a sense of fashion and fun and wanting to drive away from the showroom in a car that will turn heads across town. And it is a trend that is being recognised by the big automotive manufacturers who are increasingly introducing great looking cars and SUVs into the market. Today the young Omanis and others who come into our showrooms really do care what they drive – it is no longer just an effective

way to get from one place to another. With information about brands around the world available at the click of a mouse – it means customers come to the showroom armed with facts, figures and statistics at their finger-tips. And that in itself means the automotive sales teams have to be better trained, more experienced and knowledgeable about the cars and SUVs they sell than ever before.

Customer-centric futureThe automotive market in Oman will naturally become more competitive – it is a simple fact of business life. And for a distributor like us to enjoy continued growth and success in the future the service relationship between the distributor and the individual customer will be absolutely vital.

I believe that prices in the future will not be the deciding factor. Yes of course customers will still want the best value for money, but they will equally be looking for the best design, a car that is economical to run – a good

cost of ownership – durability and most importantly excellent service. The service factor is a lot more than just when the vehicle needs to be maintained and checked. It has to be the whole customer experience from the moment an individual sets foot in the showroom, to the interaction with the sales staff, when they purchase the vehicle and the follow-up after care they receive. As a business it is our objective to build long-lasting relationships with our customers. Relationships that can last from model to model and from generation to generation.

We are confident that it can succeed – especially in such a positive environment for economic growth and development in the nation. I believe that Oman is on the verge of entering a period of outstanding growth and development that will transform the nation over the next five to 10 years.

Major infrastructure projects that are now starting will be completed, tourism will grow, manufacturing is set to expand and strategic projects such as the Muscat and Salalah Airport projects and Duqm will become operational and act as catalysts for expansion and prosperity. And driven by the deep rooted love in Oman for the motor vehicle in all its forms – I am sure that the Sultanate’s car industry is indeed set to mirror the success of the nation in the years ahead.

The automotive market in Oman will naturally become more competitive – it is a simple fact of business life

96 April 2012

Bilateral trades between Gulf Cooperation Council (GCC) countries and the US are vital to both sides. The GCC

states are a primary source of oil for the US while American products such as aircraft and vehicles help guarantee economic well-being of GCC states.

Undoubtedly, oil prices as well as value of durable American goods play a key role in determining final trade balances. Yet, value of the US dollar is largely insignificant in determining eventual trade activities between the two sides, as all GCC countries except for Kuwait peg their currencies to the dollar. Nevertheless, the American currency constitutes a key component of the basket of currencies used in determining the value of Kuwaiti dinar.

Thanks to steady increases, the six economies of the Gulf Cooperation Council (GCC) have succeeded in reversing the balance to their advantage in 2011 with regard to doing business with the US.

Calculating statistics released by the US Census Bureau, this writer feels that the GCC has collectively enjoyed a $10bn net trade balance in goods in 2011. By comparison, the US recorded a tiny $500mn trade surplus in 2010.

The shortage with the GCC is insignificant by American standards, having sustained a deficit of $737bn in goods trade last year. In fact, the GCC countries accounted for a mere 1.4 per cent of total US deficit in goods.

In contrast, China accounted for a hefty $296bn or 40 per cent of the

US’s trade deficit in the same year. The deficit would have been worse but for the rise in US exports to the UAE, which grew by a notable $4.2bn to $15.9bn in 2011. The development partly reflects the steady rise in exports of American transportation equipment.

In reality, the UAE stands out among fellow GCC countries by being home to four airlines, namely Emirates, Etihad, Air Arabia and flydubai.

Interestingly enough, the GCC countries were divided equally with regard to having surpluses and deficits in their trade relations with the US in 2011.

At $13.5bn, the US recorded the highest trade surplus with the UAE than with any other GCC state. This is extraordinary as the UAE is a key exporter of crude in the world, yet open for imports.

The size of the UAE’s trade with the US is second only to that of Saudi Arabia in the GCC. In reality, US-Saudi Arabia trade amounted to $62.3bn in 2011, an increase of 42 per cent in a span of a single year. The Saudi side enjoyed a $33.6bn surplus on the

Doing business with USThe two-way trade

between the US and all Arab countries stood at $153bn in 2011, up from $119bn in 2010

The author is an eminent economist and Member of Parliament, Bahrain (jasim.husain@gmail.com)

It remains to be seen whether the US would press for concluding a Trade and Investment Cooperation Agreement (TICA) with the GCC

CLOSE UP

back of rising exports by a notable $16bn.

The development chiefly reflects growing exports of crude oil from the kingdom to the US with oil prices remaining steady. More specifically, the increased net imports of petroleum products accounted for about two-thirds of the growth of the US trade shortage in goods last year.

Dependence on imported oil This phenomenon serves to prove that the US remains heavily dependent on imported oil and refined petroleum products despite all the talk of efficiency in the use of energy and home-grown options. Not surprisingly, Saudi Arabia plays a key role in trade between the US and the

Arab world. As such, trade between the US and Saudi Arabia accounted for 40 per cent of total US trade with all Arab states last year.

The two-way trade between the US and all Arab countries stood at $153bn in 2011, up from $119bn in 2010. Saudi Arabia enjoys numerous qualities such as being the largest Arab economy, boasting GDP of

$577bn, as well as serving as the largest oil exporter in the world.

Trade imbalanceIt remains to be seen whether or not the US would press for concluding a Trade and Investment Cooperation Agreement or (TICA) with the GCC bloc if only to offset the trade imbalance. At the moment, the US has separate free trade agreements (FTAs) with Bahrain and Oman. However, the two FTAs were meant to provide the two smallest GCC economies access to the US economy.

Certainly, TICA would serve in entic-ing investments from wealthy GCC economies currently enjoying wind-falls of oil revenues, and the US has to exert efforts for that to happen.

US-Saudi trade amounts to $62.3bn in 2011

It accounts for 40 per cent of total trade with Arab countries

Saudi enjoys a $33.6bn surplus

US-Saudi trade

By Dr Jasim Husain Ali

98

AUTO NEWS

April 2012

The new sixth generation BMW 3 Series was launched by Al Jenaibi International Automobiles, the exclusive importer of BMW Group in Oman, recently. Having sold 12.5 million cars since the first 3 Series was launched in 1975, the BMW 3 Series continues to be BMW Group’s best-selling model series; consistently accounting for more than a quarter of the company’s global sales. In 2010, every third BMW sold was a 3 Series and its success over the

past 37 years has made it the world’s best-selling premium car. “We are excited to start the year with the launch of such an important model,” says Rachid Zamani, general manager, Al Jenaibi International Automobiles. The new car is bigger, sportier and more dynamic, and the first BMW model to be available with three different lines: Modern, Sport and Luxury – three distinctive design personalities for the exterior and interior.

Geely Holding Group and Volvo Cars have recently signed a technology transfer deal, allowing Geely, the Chinese carmaker to enrich its product portfolio and boost its competitiveness. Geely Holding Group completed the acquisition of Volvo Cars from Ford Motor Co. in 2010. As the technology transfer agreement has been made, Geely will employ the advanced technologies authorised by Volvo cars in its vehicle quality

improvement and high-end brands building. At the signing ceremony, AN Conghui, CEO and president of Geely Holding Group and Stefan Jacoby, CEO and president of Volvo Cars represented both parties to sign the Technology Transfer Agreement in Shanghai. GUI Shengyue, president of administration of Geely Holding Group and other senior executives of both parties were present on the occasion.

GEELY, VOLVO TO SHARE TECHNOLOGY

SUNNY WITH A FACE LIFTChrysler’s Dodge Charger saloon car overcame tough competition in the large car segment to win Automan magazine’s 2011 COTY Award. Hatim Al Taie, CEO and editor-in-chief of Al Roya Publishing, presented the prestigious award to Chris Edwards, general manager of Dhofar Automotive at the Wattayah showroom. “This award is also testament to Chrysler Group’s vision of what a large executive saloon car should be,” says Edwards. “The Dodge Charger with rear wheel drive and its variants appeal to a wide audience base, thanks to an innovative blend of luxury and performance. The most important aspect of this award is that it recognises the brand and its products in a manner that best complements

our existing business. The Dodge Charger has received one of the more substantial redesigns of all the recently redone Chrysler Group vehicles. Charger’s exterior is sharper and its interior is no longer considered basic.

DODGE WINS AUTOMAN AWARD

ALL NEW BMW 3 SERIES ARRIVES

Suhail Bahwan Automobiles, the exclusive importers and distributors of Nissan vehicles in Oman, unveiled Nissan’s All New Nissan Sunny - the completely re-engineered tenth generation of the Sunny platform. This key model in the highly competitive C-segment market breaks new ground for entry-level

compact sedans. The All New Nissan Sunny was launched at a glittering ceremony held in Al Bustan Hotel, presided by Atsuo Kosaka, managing director Nissan Middle East, Ahmed Suhail Bahwan, chairman of Suhail Bahwan Automobiles and Divyendu Kumar, managing director of Suhail Bahwan Automobiles.

NEW 911 CARRERA ARRIVESPorsche Centre Oman celebrated the arrival of the new 911 Carrera and Carrera S Coupé with a thrilling reveal show at The Shangri-La’s Barr Al Jissah Resort & Spa recently. The icon, highly anticipated by sports car aficionados and now available in its seventh generation, has undergone a complete re-design. The new 911 Carrera features a flatter, stretched silhouette, exciting contours and precisely designed details. Its wheelbase is now 100

millimetres longer, sits lower to the ground and consequently offers even better handling dynamics for the enhanced driving pleasure of 911 connoisseurs. “This is a moment which marks a new era for our brand. The 911 Carrera is the re-definition of what a sports car should be. No fewer than 90 per cent of all components are either new or have been fundamentally revised,” says George Wills, managing director of Porsche Middle East and Africa FZE.

OFFERS GALORE WITH GMC GMC vehicles at Moosa Abdul Rahman are now available with additional value on all variants at no extra cost. The customers will be entitled to a number of free benefits such as 40,000 km service over two years, five years unlimited km warranty and complimentary registration on all models. All vehicles will be serviced at intervals of 10,000kms.

To top it all, each purchase will be accompanied by the latest 8.9 inch Samsung Galaxy Tab, at no extra cost. “We always try to offer our customers quality products that are affordable, and it is our pleasure to provide even more value with this limited time promotion,” says Virendra Agarwal CEO, Moosa Abdul Rahman Hassan & Co.

Land Rover has showcased its strongest ever product portfolio on the first day of the 2012 Geneva Motor Show. In addition to the brand’s 2012 lineup, three special vehicles highlighted the breadth and strength of the Land Rover brand – the 1,000,000th Land Rover Discovery, the DC100 Defender Concept vehicle and for the first time in public, the Range Rover Evoque Convertible Concept.

One of the most talked about vehicles at the Show, the Evoque Convertible Concept is the world’s first premium SUV convertible. It is a bold design study that builds on the current model’s success and reflects Land Rover’s expertise at identifying and leading new market segments. The soft-top concept vehicle features a fully retractable premium roof with a Roll Over Protection System [ROPS].

LAND ROVER SHOWCASED AT GENEVA MOTOR SHOW

Mercedes-Benz AMG performance division’s flagship SLS AMG supercar has ‘Performance Car of the Year 2011’ at the first ceremony of its kind to honour the cream of Oman’s automotive crop. Inspired by the original 1950’S Mercedes-Benz 300SL Gullwing, the SLS AMG was the first supercar to be designed and built from the ground up in Affalterbach. The SLS AMG took the top spot following a year of testing against competitors by the editorial team of Automan car magazine. Accepting the award for Zawawi Trading Company - sole distributor for Mercedes-Benz in Oman - Craig Hardie, CEO–Automotive says “To receive the first ever Omani award for

Performance Car of the Year is a real honour. In many ways the success of the SLS AMG reflects the winning formula of Oman, taking the heritage of its past and combining it with cutting edge 21st century technology to reach great new heights.”

SLS AMG IS PERFORMANCE CAR OF YEAR

100 April 2012

The Primary School at British School Muscat recently hosted a Primary Geography Conference on sustainability aimed at raising the importance of sustainability within the school and planning for a more sustainable future

The concept of sustainable school stems from the ethos of caring for oneself, for each other, across cultures,

distances and generations; and for the environment, far and near. Schools are by default caring places, but a sustainable school extends this commitment into new areas. It cares about the energy and the water it consumes, the waste it produces, the food it serves, the traffic it attracts and the difficulties faced by people living in its communities and in other parts of the world.

Driven by such a lofty vision, the Primary School at British School Muscat (BSM) recently hosted a Primary Geography Conference on Sustainability aimed at raising the importance of sustainability within

the school and planning for a more sustainable future. The first conference of its kind in the country was attended by delegates from British and International Schools within Oman and speakers and experts on sustainability and conservation.

Ahmed Sayed, Events Manager at United Media Services, did a presentation on Oman Green Awards (OGA), the Sultanate’s first environment awards which has emerged as unique platform to honour and appreciate outstanding environmental vision and achievements in Oman.

“The outcomes from the conference were to look into the possibility of running a sustainability conference for children and a photography competition to raise awareness of the

problems of littering in Oman,” says Tamsin Turner, primary humanities coordinator and green team leader at the school. “Most importantly it was an opportunity to recognise the power of working as a team rather than as a series of ‘islands’. I strongly believe that as ‘islands’ we achieve very little but as a team we can make long lasting, valuable and essential changes to our world.”

In BSM, sustainability is integrated in the curriculum of all pupils and students from nursery to year 13. “This is especially strong in science, humanities, literacy and CPSHE but elements are also found in other areas of the curriculum. The Primary School is very lucky to have the expertise of the Senior School to support our work,” adds Turner.

For a sustainable school

ENVIRONMENT

1

102 April 2012

BILLBOARD

BankMuscat donates wheelchairs BankMuscat, as part of its Corporate Social Responsibility (CSR) initiatives, donated 30 wheelchairs to physically challenged citizens. AbdulRazak Ali Issa, CE, presided over the ceremony held at the bank’s head office. The beneficiaries were referred by the bank staff as part of a new CSR initiative launched by the bank to instill a voluntary work culture in the community. “The BankMuscat CSR initiative is an earnest attempt to respond to reality,” says AbdulRazak Ali Issa. “The CSR initiative is a commitment to involve everybody in the bank in social activities. The bank aims to bring social responsibility in the blood of everyone and as the culture of the organisation.”

Evolve Lifestyle opens in Oman Habitat Furnishing, part of Al Jassar Group, has opened Evolve Lifestyle furniture showroom in Muscat. The showroom was inaugurated by the Ambassador of the Federal Republic of Germany, HE Angelika Storz-Chakarji. Evolve Lifestyle is a modern furniture store that showcases innovative designs and high quality luxury furniture. With its opening in Wattayah, top international furniture brand Hilker 1888 is now available in the Sultanate. Hilker founded in 1888 is one of the market leaders for German quality upholstery. It has established strong base in Germany, US, Holland, Singapore, Honk Kong and Scandinavian countries. In Oman, Hilker has joined hands with Habitat International to showcase its special collection of premium lifestyle furniture.

MHD’s new showroom opensThe new Mohsin Haider Darwish (MHD) showroom for office furniture and interior solutions was inaugurated recently by HE Sheikh Mohsin Haider Darwish, chairman, MHD. The senior officials of KNOLL - USA, NURUS, Turkey and Godrej Interio - India, were present on the occasion. Located in Al Wadi Al Kabir, the showroom is spread over 4000 square feet. Office furniture and interior solutions of MHD exclusively represents in Oman leading furniture brands from USA, Europe, Far East and Asia. This business unit deals with exclusive high-end office furniture, from world renowned brands like Knoll, Nurus, Godrej interio and other international furniture brands. The range of furniture displayed in the showroom includes executive desking, seating, workstations, open plan systems, storage solutions and flooring etc.

AHE launches Black & Decker’s Tradesman seriesStanley Black & Decker joined hands with its long standing partner Al Hassan Electricals (AHE) to launch new Tradesman series in Oman at a function in Hotel Crowne Plaza. The Black & Decker Tradesman series is custom-designed for carpenters, mechanics and fabricators, amongst others. AHE, the sole distributor in Oman for Tradesman range, invited all its dealers and semi-professionals from the capital region to give an overview of the strategy behind the launch and to showcase the range. Manoj Panikkal, marketing manager for Black & Decker in the Middle East Africa (MEA) region presented the details of the new Tradesman Range which includes 17 robust tools and is fully supported with a one year trade use warranty. Key products include the corded and cordless drills, pneumatic hammer drill, angle grinders, planer, sander, heat gun and a workshop blower. These are complemented by a range of sawing tools like jigsaw, circular saw, chop saw and mitre saw.

NBO academy launches Omega CertificationNBO Academy of Excellence (AoE), the training arm of National Bank of Oman (NBO) has recently introduced ‘Omega Credit Skills Development Certification’ programme for the bank’s corporate bankers, risk managers, and internal auditors. Omega Certification, offered by the reputed Omega Performance, UK, aims at training and up-skilling delegates with best-practice lending and credit risk management skills that would enable them increase lending efficiency to corporate and SME clients, and improve loan quality through sound risk management and loan documentation techniques. Delegates are expected to learn how to grow more profitable, lower-risk business loan portfolios and how to increase lending efficiency.

CBFS to train Ahlibank staff Ahlibank has joined hands with College of Banking and Financial Studies (CBFS) for the training of its staff in different areas of banking and managerial skills. As many as 34 courses covering different requirements of the banking industry will be provided to the bank’s staff at the CBFS campus. These staff training courses are in line with ahlibank’s commitment to human resources development stemming from the Royal directives of His Majesty Sultan Qaboos bin Said. Abdul Aziz Al Balushi, CEO of ahlibank, says, “Ahlibank is aware of the constant need to develop and train human resources. This is vital not only for the bank’s successful performance but also for overall national prosperity. After all well-trained and skilled manpower is an important cornerstone of national economic growth.”

JSIS completes two CSR projects in LiwaJindal Shadeed Iron & Steel has completed the construction of kerbstone and interlock pavements at the side of Nabr-Liwa road; and a football ground in Liwa. These two projects were inaugurated and dedicated to people recently. HE Sheikh Hamid al Aghbri, Wali of Liwa, inaugurated the ceremony by unveiling the foundation stone at the football ground in the presence of Shura Council members, deputy Walis of Liwa and Sohar along with other guests. A friendly match was played between the football teams of Jindal Shadeed and Nabr village. This was followed by a visit to Nabr-Liwa road by the guests. “The government of Oman has provided all the support and infrastructure to Jindal Shadeed in reviving the plant and has been providing continuous cooperation since then,” said DK Saraogi, executive president & head of Jindal Shadeed.

Khimji’s Watches promotion till April 12Khimji’s Watches has announced that its super promotion on some of the most popular products will continue until April 12. Shoppers can continue to flock to the Shatti Al Qurum showroom to marvel at the many great bargains on offer which include an incredible 70 per cent off on a range of premium watches, accessories, sunglasses, jewelry and luxury phones. The collection includes a vast array of prices and styles for both men and women. Many of the pieces which are part of the promotion are available at never-before-seen prices thus enabling shoppers to give themselves a much needed treat or surprise to their loved ones. Khimji’s Watches is well known for its luxurious branded jewelry and diverse designs.

OMZEST partners with NOVA Medical NOVA Medical Centres, India’s leading ambulatory surgery group, announced its expansion into the Middle East region with the launch of its first facility in Muscat. NOVA Medical Centres Middle East is a 51:49 per cent joint venture between NOVA and the OMZEST Group. Additionally, OMZEST has acquired a 12.5 per cent stake in NOVA’s Indian operations. NOVA Medical Centers Middle East has commenced operations with the launch of a state of the art polyclinic in Al Khuwair. The NOVA Polyclinic will have a panel of super-specialists consultants. In addition, the Polyclinic is equipped with comprehensive diagnostics including a pathology lab, digital x-ray, and ultrasound. The polyclinic will offer multi specialties with own specialists.

104 April 2012

MARKET WATCH

Frontier DL600 for increased efficiency

Photocentre has introduced in Oman the latest addition in Fujifilm’s line-up

-- the Frontier Dry Minilab DL600. The Frontier DL600 represents a new level

of efficiency in inkjet application for minilabs. It is based on five-colour ink

reproduction and hence is able to produce vivid images with enhanced grain

and gradation in high resolutions up to 1,440dpi. Print size flexibility for

commercial applications by end users is also factored in -- from small 3.5in

x 5in right up to 12in x 48in at speeds up to 650 prints per hour for 4in x 6in

print sizes. Production efficiency is also improved with new 180 metre length

of paper rolls, available in widths up to 6in, while 700ml cartridges optimise

ink consumption. Its cutting edge technologies enable printing of high

quality, consistent images, in a user-friendly design, requiring minimal user

involvement and training.

Avant-garde watches

The Urwerk brand of watches, a new generation of avant-garde timepieces,

was launched in Oman at the Mistal Boutique, making it the third regional

location to market one of the world’s most exclusive timepiece designs.

Urwerk, from Switzerland, was formed in 1997 by brothers Felix and

Thomas Baumgartner and their friend Martin Frei who did away with

traditional watch design and came up with a contemporary moving hour

hand. The design was inspired by an Italian designed clock from 1682.

Watchmaking industry would have never seen this design before but the

concept is a very simple. The emphasis is on the mechanical innovation.

Around 150-200 watches are produced each year by the 12- strong

company split into two divisions in Geneva and Zurich. Presently three

models are available in Oman namely UR-103T , UR-110 Torpedo and

UR-202S Hammerhead.

World’s first tropical inverter

Panasonic has introduced world’s first tropical inverter air conditioners

designed to specifically meet the climatic challenges of the Middle

East. The new range of air conditioners comes with the Smart Inverter

Compressor, which are powerful, fast and extremely energy efficient.

With searing temperatures in the region, the new technology has made it

possible for an 18000 Btu Air conditioner to reach upto 22000 Btu, and

a 24000 Btu model to reach up to 27000 Btu, based on the requirements

resulting in faster cooling. Furthermore, the new technology precisely

manages the speed of the compressor, resulting in up to 30 per cent

less energy consumption compared to a non-inverter model. The

existing ECONAVI feature has also been upgraded with the addition of

the Sunlight Detection system, which will help the AC control its cooling

based on ambient light conditions.

GIZMOS

Unmatched entertainment experience

Sony Mobile Communications has launched its Xperia S smartphone in the

Middle East recently at Armani Hotel, Burj Khalifa. The Middle East launch

follows a successful global debut at international Consumer Electronics

Show (CES) 2012 and Mobile World Congress (MWC) 2012. The event

offered a demonstration of the feature-rich smartphone highlighting key

functionalities such as the ‘connected entertainment experience’. Xperia

S sports ‘Iconic Identity’, an innovative transparent design element at

the base, that creates a simple, strong, instantly recognizable look with

illumination effects and integrated antenna components. The user interface

has been restyled to match the minimalistic design of the hardware.

Wireless charger

As smartphones become the defacto medium for consuming multimedia content

and communicating, it is not unusual to find oneself having to recharge a phone a

couple of times a day. It only made sense to turn that charging time into a positive

user experience by making the smartphone useful while sitting in the cradle. LG’s

newest advanced wireless charger, WCD-800 is designed in the shape of a cradle

to allow to the phone to be positioned vertically to make video calls and send text

messages or horizontally to view TV programs and HD movies while charging. The

LG charger also eliminates the inconvenience of the cable that must be plugged into

the smartphone when recharging. With the WCD-800, charging is accomplished by

simply placing the phone on the deck of the 75.8mm wide cradle. The charging area

is double the size of LG’s previous wireless charger, the WCP-700.

Eco-friendly smartphone

Nokia’s smallest ever smartphone, the Nokia 700, is feature-packed and

powered with the innovative Nokia Belle operating system, designed

to enhance consumer experience and smartphone performance.

Weighing only 96gm, the Nokia 700 not only becomes Nokia’s most

compact smartphone in the Belle range, it is also the most compact

touch smartphone in the world. What

it lacks in size it makes up for in

functionality, with single-tap NFC

sharing and pairing capabilities, a

1Ghz processor, 3.2 inch AMOLED

ClearBlack display, 2GB of internal

memory (with the option of using

a 32GB microSD card for a total

of 34GB), HD video capture and

5MP full focus camera with LED

flash. The Nokia 700 is also Nokia’s

most eco-friendly smartphone. It

is constructed using materials

such as bio-plastics, recycled

plastics and recycled metals.

Thanks to the AMOLED screen,

ambient light sensor and power-

save mode, the Nokia 700 will

remain environmentally responsible

throughout its life.

106 April 2012

Luke Donald is the world No 1 again after winning the Transitions Championship in Miami recently. Two weeks

before players gather at Augusta National for the first major tournament of the year, Donald won a four-man play-off to take back the top ranking spot he surrendered to McIlroy.

The Englishman needed a win in Florida to reclaim top spot from his Ryder Cup team-mate and he did just that by holding his nerve to win a four-man play-off. Robert Garrigus, Jim Furyk and Bae Sang-Moon were the players edged out by Donald after the quartet had finished the fourth round on 13 under par.

A run of five birdies in the first 11 holes moved the 35-year-old into contention, before he consolidated with seven successive pars to ensure a 16th top-10 finish in his last 22 events. He hit an excellent approach shot on the first hole of the play-off with a seven iron from the rough and holed the putt to seal his victory.

Hoping to finally capture his elusive first major title at Augusta National next month, reigning US and European prize money champion Donald took his tension-packed triumph in stride.

‘‘It’s another step in the right direction to winning majors,’’ Donald said. ‘This is prefect preparation - two weeks off now and looking toward Augusta.’’

The playoff took place on the par-4 18th hole, with Donald the only player to find the dense rough off the tee. He blasted his approach six feet from the hole but Garrigus put his second shot only seven feet from the cup. After Bae and Furyk missed long birdie putts, Garrigus pushed his birdie bid just left of the cup, setting the stage for a dramatic birdie putt that brought Donald his first US playoff win.

‘‘I certainly was a lot more nervous the first time trying to get to No.1,’’ Donald said. ‘‘This time I was just focused on winning the tournament and it all worked out.’’

McIlroy was quick to praise his Ryder Cup team-mate, saying on Twitter, “Well I enjoyed it while it lasted! Congrats LukeDonald! Impressive performance!”

Donald’s victory made it three European victories in a row in America after McIlroy triumphed at the Honda Classic and Justin Rose did likewise at the Cadillac Championship. Donald admitted the win was a morale booster

ahead of the Masters.

After his record-setting year in 2011, Luke Donald has had a slow start in 2012. Donald was the first player to ever win the money titles on both the PGA and European Tours in the same year. He had two wins and an amazing 14 top 10s in 19 starts on the PGA Tour; plus, he added two more wins and six more top 10s on the 2011 European Tour.

At the helm Luke Donald has reclaimed the world No 1 ranking from Rory McIlroy after winning the US PGA Transitions Championship

GOLFUPDATE

The Rules Of Wealth delivers sterling ideas for becoming wealthy. The book is overflowing with critically important subjects centered on getting rich. The

book aims to distill the mindset and strategies of the super-wealthy into an easy-to-follow set of rules that might lead anyone to personal prosperity. There are one hundred rules in total, and these are split across five sections; Thinking Wealthy, Getting Wealthy, Get Even Wealthier, Staying Wealthy, Sharing Your Wealth.

The author enlightens the reader on business subjects that are highly useful. The best thing about the book is that you don’t have to sift through page after page of written text to finally get to the main point. Templar cuts to the core on every topic. As a result, you don’t waste time on insignificant details. The author also simplifies difficult concepts in the business world.

Light read The book’s strength is its breadth rather than its depth - the rules are intended to shape one’s financial behaviour without delving into the minutiae of its recommendations.

The writing is fairly easy to read and there is no unnecessary use of technical language which might intimidate the amateur economist. On the whole, Templar comes across as a well-grounded and self-effacing individual, his writing is personable and he acts as a wholly amiable narrator.

One of the small drawbacks of the book is its lack of a defined target audience. Most financial development books are aimed at either the individual, or at the entrepreneur. In trying to appeal to the widest possible audience the book does neither satisfactorily. Indeed, there are times when this causes an internal dissonance. For example, on the matter of loans. While for an individual, personal loans are normally financially unwise, for an entrepreneur a

business loan is an ideal form of leveraging. While it’s possible to sit these two viewpoints side-by-side it creates a rather jumbled and somewhat imprecise feel.

The information contained in The Rules of Wealth is nothing one couldn’t find on a good financial blog; but the attempt to codify a set of wealth rules is admirable. Templar’s moral code provides a refreshing backdrop to the financial advice as does his endorsement of hard work. The book’s simplicity is probably one of its most salient selling points, the rules that Templar has gathered together, is unlikely to make anyone extremely wealthy, but it certainly provide some basic financial pointers to keep your money life in good order.

Nuggets of wisdom The Rules Of Wealth by Richard Templar intends to shape one’s financial behaviour without resorting to abstract business jargon. An OER review

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