Bank of the Year Awards 2021

The cream of the crop for 2021 from the Middle East.

Bahrain

Ahli United Bank

In an extremely competitive contest, Bahrain’s Ahli United Bank (AUB) has emerged as the country’s Bank of the Year for 2021, in recognition of its digital advances and consolidation of overseas operations.

Like other Bahraini lenders, AUB’s 2020 financial performance was hit hard by the Covid-19 pandemic, affected by the US Federal Reserve’s interest rate cuts and higher provisions in the midst of economic uncertainty. While NPLs increased only slightly, return on equity fell to 10.4% in 2020 from 17.7% the previous year.

As part of the bank’s digital transformation project, AUB launched its digital customer onboarding service in January 2021, enabling customers to open an account from home within five minutes with a smart device and a national ID card. Backed by a large publicity campaign, the new system contributed to a near doubling of new account openings.

The bank also rolled out an enhanced business-to-business system for its corporate customers, providing a single-screen interface consolidating all their banking activities, enhancing functionality and ease of use. The total number of customers onboarded on the system grew to 6500 customers by the end of 2020, compared with 840 at the end of 2019.

Among the new products recently launched by AUB is POS Merchant Financing, a financing product for merchant services that allows AUB point-of-sale customers to get a loan of up to three months’ average sales turnover based on their business performance, without any collateral. The bank also rolled out WhatsApp banking services.

On the international front, AUB — itself in the process of protracted merger talks with Kuwait Finance House — took the opportunity to bolster its own international investments, increasing its shareholding in AUB Egypt to 95.7% from 85.7%, and also raised its stake in Commercial Bank of Iraq from 75% to 80.3%.

Iran

Bank Pasargad

In one of the most challenging banking environments in the Middle East, Bank Pasargad has been selected as Iran’s Bank of the Year for 2021 in recognition of its digital ambitions.

The primary vehicle for these ambitions is the Project on Digital Banking Smart Land (POD), the bank’s platform that will form the basis of an ecosystem for producers, consumers and other sub-platforms. The bank intends POD’s platform architecture to be open to a wide range of businesses across education, financial services, energy, healthcare, tourism and other sectors.

Bank Pasargad intends its new platform to generate revenue from the provision of basic software services, infrastructure and enterprise resource planning, while expanding its own service offering and customer base.

The bank has also overhauled its popular e-wallet solution Kipod, which had two million users at the end of 2020, rebranding it as Paypod. The relaunched wallet service has a more intuitive design that further streamlines the payment process, while also offering road fine and toll payment services via a phone number-based funds transfer system, and bonus offers.

The year 2020 also saw Bank Pasargad introduce its Podium open banking platform, a secure and trusted digital services platform for storing the bank’s application programming interfaces (APIs), as well as hosting a wide range of web services and APIs from third-party providers. The platform was principally designed to meet the growing demand in the market in providing digital banking and financial services to small, medium-sized and large businesses.

The core of the platform provides access to all Bank Pasargad’s banking and financial services portfolio and POD Smart Land capabilities to the bank’s corporate and private clients. Using Podium, businesses can access a wide range of APIs including bank-specific payments infra-structures, capital market trading, insurance, map location services and bill enquiries and payments.

Jordan

Arab Bank

Arab Bank retains its title of Bank of the Year for Jordan in 2021, in recognition of its commitment to nurturing programming skills among recent graduates and the attendant benefits in the form of new products and services.

Since 2019, Arab Bank has run ‘tech academies’, six-month training programmes for new graduates on new technology trends and practices, after which their training is put to use within the bank. The academies programme has enabled the bank to tackle the shortage of tech competencies in the region, while employing graduates to build next-generation digital platforms and solutions at its in-house Development Factory.

The programme has borne fruit in 2021, in the form of services including the bank’s new mortgage app, improved mobile-based customer onboarding and instant loan applications.

In the third quarter of 2020, Arab Bank launched a payment acquisition service in Jordan, providing holistic payment solutions to partner merchants across the country. This service is bundled with a variety of value-added services that assist merchants in providing seamless payment options to their customers, while helping them manage their cashflow. After the successful Jordanian launch, the service was launched in Palestine in the second quarter of 2021.
Arab Bank’s finances took a hit in 2020 as interest rates and oil prices plunged, with the cost of risk increasing significantly. While the bank’s return on equity declined from 9.3% to 2.1% during the year, customer deposits and lending grew by 7% and 1%, respectively.

“As we go forward, factors such as increased complexities of customer expectations, interdependency of economies and communities and technological innovations will continue to disrupt all industries, and banking is no exception,” says Arab Bank CEO Nemeh Sabbagh.

“Our digitalisation strategy and investments in innovative products and services over the past few years are serving us well in weathering the pandemic’s impact, and providing responsive and seamless services to our customers throughout our network.”

Kuwait

National Bank of Kuwait   

National Bank of Kuwait (NBK), the country’s largest lender by assets, regains the title of Kuwait’s Bank of the Year for 2021, enduring a difficult financial year while making progress on its digital transformation journey.

Kuwait suffered its worst recession since the first Gulf war in 2020, with a slump in oil revenues causing gross domestic product to shrink by 8.9%. While oil prices have since risen to multi-year highs, the country’s economy remains sluggish, with the International Monetary Fund forecasting growth of just 0.9% in 2021.

“All business sectors in Kuwait were affected by the Covid-19 pandemic, and its adverse impacts on the operating environment,” says NBK CEO Salah Al-Fulaij. “However, we succeeded in maintaining the course of our strategy and continued along with the execution of our digital transformation roadmap. This uplifted the capability of our digital channels, innovative banking offerings and payment solutions provided to our customers to cater to their evolving needs.”

Addressing the challenges of the pandemic, NBK’s IT and operations department worked hard to support the set-up of remote operations, rolling out virtual private networks to staff to ensure seamless home working, while completing the migration of core systems to the bank’s new headquarters in the Sharq business district of Kuwait City. All the while, the bank strived to stay at the forefront of emerging technology in its quest to meet customers’ ever-changing needs.

In November 2020, NBK Group successfully redeemed its 125m dinar ($414m) 2015 Subordinated Tier 2 bonds, and issued 150m dinars-worth of Tier 2 bonds, as well as $300m Resetting Subordinated Tier 2 notes, due in 2030. The 150m dinar issuance was 1.5 times oversubscribed, and was the first liability management transaction on a Basel III-compliant dinar-denominated Tier 2 instrument. It was also the largest local bond issuance ever to be actively marketed to fixed income investors on a private placement basis.

Lebanon

Blom Bank

Blom Bank has been selected as Lebanon’s Bank of the Year for 2021, managing to remain profitable in the midst of unprecedented economic challenges.

Following a 25% contraction in Lebanon’s economy in 2020, there are few reasons for optimism in 2022, despite the formation of a new government in September 2021. The World Bank describes the country’s economic crisis as ranking possibly in the top three most severe financial crises globally since the mid-19th century.

Against such a backdrop, Blom Bank saw its asset base shrink by 11% in 2020, with profitability all but wiped out. Non-performing loans, meanwhile, rose to 21.26%, compared with 7.1% in 2019.

“We have moved from a focus on horizontal and vertical expansion to a focus on minimising losses and protecting the interests of our stakeholders, while abiding by all regulations set by the central bank,” says Saad Azhari, Blom Bank chairman and general manager.

“Our future plan is to emerge from the crisis in a shape that allows us to grow and to function as a solid ‘new’ bank in the post-crisis period,” he continues. “This means preserving our capital base, maintaining our talented staff, meeting the demands of our clients, and strengthen-ing our co-operation and services with the international and regional organisations.”

In a bid to ease the pressure on customers in the midst of the Covid-19 crisis, Blom Bank waived all late payment fees from March 2020 until the end of 2021. Additionally, about 3000 clients were granted special loans at 0% interest rate to settle their dues from March until June 2020. The bank also reversed all late credit card payments starting in March 2020 until the end of that year.

The bank built on its existing partnership with OMT, an accredited Western Union agent, to offer an OMT prepaid dual-currency Visa card across the agent’s 1200 outlets across Lebanon. A nationwide campaign was launched to introduce the card to the market, with successful results in terms of applicant numbers.

Oman

Bank Muscat

Bank Muscat retains its position as Oman’s Bank of the Year for 2021, refreshing its customer experience management framework while introducing important upgrades and new services.

“Over the past 18 months and during the Covid-19 pandemic period, Bank Muscat focused on safety, security and sustainability,” says the lender’s CEO Sheikh Waleed K Al Hashar.

“The bank’s business plan and medium-term strategy were reviewed and aligned with the new dynamics,” he continues. “By working diligently, Bank Muscat has been able to achieve commendable results in a challenging macroeconomic environment. Moving ahead, we hope to further sharpen our focus on customer-centricity, sustainability, employee development and being future-ready.”

In 2020, the bank gathered responses from more than 55,000 customers through surveys and 12 customer focus groups for both individuals and companies, ensuring that a thorough analysis was conducted on all customer complaints.

The year also saw the bank introduce a simplified, standalone remittance app. With five language options catering to the large number of guest workers in Oman, the new lightweight app is helping customers remit funds conveniently and secure-ly to their families in Bangladesh, India and Pakistan during multiple lockdowns and greater social distancing over the past year.

Overall, the bank’s IT department delivered about 40 technology projects in 2020, while running more than 50 projects simultaneously.

In line with its commitment to financial inclusion and provision of banking facilities to all segments of society, Bank Muscat launched the Woqar Banking Package for pensioners, the first package of its kind for the retiree segment in Oman. Flexible-term loans ranging from one to 10 years and credit cards based on the value of the pension are a key part of the package. The loan facility is available for pensioners up to 70 years of age, while the credit card facility is available for those aged up to 75 years.

Qatar

Qatar Islamic Bank  

In an extremely competitive contest, Qatar Islamic Bank (QIB) has retained its position as the country’s Bank of the Year for 2021, in recognition of its solid financial performance and significant digital service upgrades.

QIB reported a small increase in net profits for 2020, even as return on equity slipped from 18.1% to 16.7% and Qatar’s economy struggled in the wake of lower oil prices. The bank’s results have rebounded as rising crude prices ease the pressure on the economy, with net profit up 13.9% year-on-year for the first nine months of 2021.

QIB’s mobile app witnessed a 50% increase in active users in 2020 in the midst of Covid lockdowns. Among the many updates to the app is an instant credit card solution, enabling customers to apply for a fully-digitally approved credit card that is ready for use within hours of the application. More than 2500 credit cards have been requested digitally since the launch of the initiative, with over half of all credit card applications now conducted via digital channels.

In 2021 the bank also launched its Zaki smart assistant, designed to provide relevant and contextual responses to QIB existing and new customers’ queries in a more convenient and instant manner.

“We aim to enrich QIB’s ecosystems by partnering with fintechs and third-party providers so as to target a larger audience with new products and services,” says QIB group CEO Bassel Gamal.

“At the same time and as the world is emerging from the pandemic, we realise that it is essential to rebuild our societies in ways that will deliver sustainable benefits to our community, as well as the environment and the economy,” he says. “For that reason, we have developed our sustainability framework with important elements of our strategy addressing how we can enhance consideration of sustainability criteria in our financing activities, continue to support local communities, and take initiatives that reduce our environmental impact.”

Saudi Arabia

Saudi National Bank  

Saudi National Bank (SNB) — formed in April 2021 from the merger of National Commercial Bank and Samba Financial Group — is the clear choice for Saudi Arabia’s Bank of the Year for 2021.
As with other major lenders in the region, the bank’s profitability was affected in 2020 by higher expenses and impairment charges, with return on equity falling to 16.8% from 18.5%, even as non-performing loans remained steady at 1.7%.

The bank made great strides on its digitisation journey in 2021, as lockdowns placed restrictions on physical transactions. Aided by the bank’s advanced data analytics and agile operating model, significant enhancements were delivered in the digital sales and services offerings in both retail and corporate. Expanded functionalities drove retail digital sales penetration, increasing from 51% to 65% year-on-year.

Retail digital account opening rose to 88% from 71%, and the volume of digital transactions reached 77% of the total base, an annual increase of 15%. Branch financial transactions declined further and accounted for only 1.5% of total transactions compared with 2.2% a year earlier. Corporate transaction banking services’ digital penetration reached 64%, up from 42% in 2019.

At the back end, gains in operational efficiency saw the usage of bots rising by 245 to total 300, with 200 processes automated, resulting in savings of as many as 1157 working hours per day. Under the bank’s ‘lean branch’ strategy, additional technology and self-service options were introduced to complement the physical distribution network, with the number of self-service kiosks increased by 91 to 406.

As part of a private sector support programme to help smaller businesses absorb the impact of the Covid pandemic, SNB partnered with the Saudi Central Bank to defer 9bn rials ($2.4bn) of payments by smaller businesses. To safeguard employees, the bank implemented all precautionary measures in line with the directives set by the health authorities in combating the spread of Covid-19.

UAE

Emirates NBD 

In one of the closest races in the Middle East, Emirates NBD has prevailed once again as the UAE’s Bank of the Year for 2021.

Long a pioneer of digital services in the UAE, Emirates NBD launched a slew of new digital banking solutions across its divisions, maintaining its focus on reducing the reliance on manual operations and encouraging straight-through processing for all its transactions.

One of the key milestones of 2020 was businessONLINE, the bank’s next-generation corporate banking platform, offering 115 features across account information payments and collections for Emirates NBD Group entities. The new platform provides simplified back-office onboarding, new products and features, improved user experience and improved efficiency. Clients can undertake cross-border transactions seamlessly, access a consolidated view of their balances across regions and currencies, and make the most of tailor-made advice for their business needs.

The bank also launched its smartSCF platform in 2020, catering to the growing need for digitisation of supply chain management and financing, which has emerged as one of the key priorities for the bank’s corporate clients. Through the smartSCF platform, clients can digitise their payable process across the region, and benefit from improved cashflow and working capital efficiencies.

Outside the UAE, Emirates NBD launched its digital standalone bank Liv — which has signed up around half a million customers in the UAE since its launch in 2017 — in Saudi Arabia in March 2020. The service features fully-digital ID verification through integration with the Saudi government’s Absher app. The service had signed up around 75,000 customers by the middle of 2021.

“We believe our market-leading products and services, digital innovation, and superior customer-first experience will serve as key catalysts for our continued growth across the markets we operate in,” says Emirates NBD group CEO Shayne Nelson.

He continues: “Going forward, we will aim to further strengthen our value proposition for customers and shareholders as we continue to set benchmarks among our peers, thus contributing to economic development in the Middle East and north Africa region, as well as Turkey.” 

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