Awards for Excellence 2020
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Under the stewardship of chief executive Jean-Christophe Durand, formerly head of BNP Paribas’s Middle East and Africa operations, National Bank of Bahrain (NBB) embarked on a radical transformation programme in 2017 that delivered impressive results during the awards period.
“We were always a solid, old-fashioned retail bank,” says Durand. “In 2017 we drew up the road map. Most importantly the transformation was made by people. We have a mindset of change, a mindset of transformation.”
Digital development was core to the bank’s strategy, with management deciding that every aspect of the banking experience had to be modernized. The bank began investing heavily in the latest technology, which included the transformation of systems, the digitalization of internal processes, the improvement of risk-management structures and improving compliance functions to international standards.
Its financials have improved markedly as a result, with profits up 6% year on year in 2019 to BD74.2 million ($197 million) and total operating income at BD125.8 million. At the end of 2016, profits were BD58.2 million with total income of BD96.9 billion.
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Jean-Christophe |
NBB has maintained a return on equity of around 14.7% over the last five years, although operating expenses have risen from BD31.4 million pre-transformation to BD45.2 million. The bank’s cost-to-income ratio was 35.9% in 2019.
One of the most important developments in 2019 was the acquisition of a 78.8% controlling stake in Manama-based Bahrain Islamic Bank as part of a plan to deepen its activity in Islamic banking and help it enter new markets.
“We had a stake in Bahrain Islamic, but felt it necessary to develop our penetration in the Islamic markets,” Durand says. “We completed the first eight weeks and validated the target operation model for the new group. We were looking at synergies, efficiencies, cross fertilization, cross selling and ensuring we invest together and align our digital strategy. We’ve now moved onto the execution phase with a first 100 days wave.”
The bank has also expanded to key GCC markets including Riyadh in Saudi Arabia and Abu Dhabi in the United Arab Emirates, with Dubai soon to follow.
“Another area where we have invested and want to continue is increasing our footprint in the main GCC economies,” says Durand. “We have licences in Saudi Arabia and the UAE, and we need to capitalize on the excellent relationship between these brotherly countries.”
Digital has been at the heart of the bank’s transformation. In 2019, it became the first bank in Mena to roll out open banking, as well as sign up to Swift to ensure faster and more efficient international payments.
“Penetration was slow at the beginning, but we have seen a sharp acceleration,” says Durand. “It isn’t necessarily a case of branches versus digital, but we have much more digital services in branches. We’re not going to expand our branch network. We will rationalize and transform it. It is a dual approach.”
The open-banking platform provides users with a consolidated insight into their financial management, spending habits and data across all their banks in Bahrain.
First to launch
NBB was also the first bank in Bahrain to launch tap-and-go payments, cash deposit machines and adherence to the requirements of data protection. It now has the largest network of branches and ATMs in Bahrain, having expanded the ATM network further to 102 locations across the kingdom.
In corporate and institutional banking, the bank continues to expand its transaction banking capabilities and it is acting as the pilot for the nationwide deployment of direct debits.
“We feel that we are now top of mind with the large corporates in the country, and have adopted an approach based on advisory and structuring solutions – not only transactions,” says Durand.
In the latter part of 2019, the bank launched a new financial restructuring business as part of its diversification and efforts to step up its participation and support for local and regional markets.
In May 2019, NBB launched Al Watani Trade service, providing online equity trading through multi-digital channels.
NBB also implemented environmental, social and governance reporting last year.
In response to the Covid-19 pandemic, NBB launched a medical insurance mobile app and ensured the delivery of medication to employees. It launched a number of initiatives, which included deferment on all monthly loans for Bahraini citizens for up to six months with no additional interest charges and temporarily increased the daily transaction limit on its debit cards from BD1,000 to BD2,000.
To minimize the risk of contact exposure, NBB issued cash deposit cards to its cash depositors at no cost.
A rebrand in 2019 with a newly designed logo and ‘Closer to you’ slogan topped off a good year for the bank.
