History repeating itself
Ewan Stirling, CEO, HSBC Bank Oman
speaks about the integration process of HSBC and Oman
International Bank in a candid interview with Mayank Singh
Now that the HSBC-Oman International Bank (OIB) merger has
been formalised, what are the top three priorities for you as
the CEO of the new bank?
It’s really hard to list a set of priorities; but always you
have to be led by your responsibilities and our top
responsibility is towards our staff and our customers. Without a
doubt, happy staff means happy customers, happy customers means
good business and this is good for the country. We are very
focused on what we should be providing to our staff and
customers in terms of everything – the terms and conditions,
business opportunities and other propositions. It is very
important for us that our primary stakeholders who are our
customers and staff really enjoy the benefits of this merger as
soon as they possibly can. Leading from that is the second part
which is the integration process.
We have set up a very challenging timeline to complete the
integration, as you know the merger was completed on May 31,
2012, when we had the OGM appointing the current Board of HSBC
Bank Oman and we intend to complete the technical integration,
to have one operating platform, common systems across the whole
bank and the branch network by December 2012. We hope that by
December, customers should be able to see the HSBC Bank Oman
branding across all the branches in the Sultanate, and wherever
you see this branding you will get the whole proposition on a
combined platform. The third priority is business growth and
that is not selfish as we have a duty to our shareholders. We
should not forget that while HSBC owns the majority of the
shares at 51 per cent, we have a duty towards 49 per cent of our
local Omani stakeholders.
We also have a responsibility to the Omani banking sector, as we
are the second largest bank and it is vital that we contribute
to the growth of the banking sector. We are in a unique position
with HSBC Bank Oman and we are delighted to be in this banking
sector as a local bank now. We are here to provide an
alternative to the other banks in the market and also to
cooperate with them on larger deals that no bank would like to
take on exclusively.
While we are a true local bank, unlike any other local bank, we
can also provide a window to the world for Oman. We can bring
the best of financial services from wherever we operate into
Oman and ensure that we are an ambassador for Oman wherever HSBC
operates. We see ourselves as not only focusing on business
growth here for our shareholders but also on business growth for
Oman as we are going to promote international trade into Oman
from all the 85 countries where HSBC operates. We feel that we
will be playing a serious role in connecting Oman
What are the potential synergies of the merged entity in
terms of larger capital base and networth. Will HSBC Bank Oman
participate in large project financing deals and can we look
forward to cross border deals under HSBC Group umbrella?
When you look at a larger capital base, it gives us the ability
to help more companies in Oman, which we will leverage, but
frankly that is not the prime motivator for HSBC Bank Oman. We
have a tremendous distribution network that allows us to garner
local funding and which puts us on a level playing field with
BankMuscat and NBO. There is much more than that, HSBC has been
in Oman since 1947 and we have been integral to the banking
community. But frankly HSBC had a six-branch network and it was
not able to bring the benefits that we have internationally into
Oman completely. Then we look at OIB and what a legacy they have
had. If you put HSBC’s international experience along with OIB’s
legacy and proven track record, that has to be a winning
combination for all stakeholders, customers, staff and the
How would HSBC use the current network of OIB branches? Are
there any plans to rationalise the branch network?
On the integration side, we are on a tight schedule as we want
to be on one platform and one offer by December 2012. Customers
should be able to walk into any of our branches by December and
enjoy the full proposition in terms of customer service and
product offerings which are seamlessly linked across our entire
branch network. During that period, we will also have a fairly
comprehensive refurbishment plan. That’s not to say that all the
branches will be refurbished, as a number of OIB branches are
already in a fantastic shape right now under their own
refurbishment programme, but we will look at those branches
which have not been on the top of that list. We have already
given some branches a new coat of paint, in preparation for the
full refurbishment. There is a quite comprehensive branch
network strategy being developed.
Will the existing products of OIB and HSBC be retained or
rebranded and how will the process work till December 2012?
Frankly, customers need not do anything as of now. Former OIB
customers can continue to enjoy all the services that they used
to enjoy at OIB before the integration and the same goes for
HSBC customers. For people having an account in both the banks,
they can continue operating both their accounts. Once the
integration is complete, then customers will be given a choice
of either continuing with both the accounts or merge both the
accounts, with the same signing authority. I would like to
request all our customers both at OIB and HSBC to come to us and
update their details, so that we can get in touch with them and
advise them properly about all the things that are going on and
explain to them the various benefits that we offer.
We want to offer the best products for the local market and the
best of international products and services, so we are looking
at our portfolio very closely. The question that I get asked
most often nowadays is – what will happen to Mandoos, as it
remains a favourite. We are not likely to discontinue something
that our customers like and want, so probably you will see
Mandoos being continued in an enhanced form. We will look at all
our products and see that we are offering the best value to our
clients. There will be some rationalisation as we are not going
to offer two versions of the same loan – as OIB and HSBC did, it
will be the HSBC Bank Oman loan proposition only and that will
be the best of both worlds.
HSBC has a strong Islamic Finance service under the Amanah
brand. Are there plans of introducing Islamic product and
services in Oman under the Amanah Brand?
As you know we are very quick to react, but we are also very
respectful of local regulations. We would prefer to wait and see
what the local regulations that the Central Bank of Oman and
other regulators advise us on so that we can react
HSBC operates on strict global practices in terms of risk and
lending. Will the application of such stringent standards impede
growth in the local market?
It is not going to restrict growth and it is not going to
restrict anything that our customers want, but I do not want to
mislead you. If you look at HSBC, we have grown very
effectively, and our lending policies have not restricted our
growth in anyway. Definitely there are differences amongst all
the banks and I would like to draw your attention to trade
finance. We are a trade finance bank, it is our bread and butter
and that’s where we have grown in Asia and the Middle East. If
you look at our trade finance share in Oman before the merger,
it was significantly higher than our overall market share. You
will not see HSBC massively changing its policies and
procedures, but what you will see are policies and procedures
that safeguard the bank, safeguard the banking sector and allow
us to grow and best serve our customer needs.
The bank will be incurring higher expenses towards
up-gradation of systems and process, infrastructure etc. What
impact will this have on your cost to income ratios?
As a listed entity, I am not allowed to comment on any forward
looking statements, but as you mentioned there will be a cost
for the integration process and that is one of the reasons why
we want to achieve that as fast as possible and then drive our
business forward. We have a very robust plan approved by our
board and which will show a very robust performance in the years
Can one expect HSBC Bank Oman to be more aggressive on the
investment banking side after the merger?
Given our status and size as a local bank, you will see a lot of
more activities as we will be looking at participating in all
the infrastructure projects and big ticket items both in terms
of funding and in terms of advisory work. The way in which we
deliver will not change markedly as we have world leading teams,
who have garnered a succession of awards in corporate advisory,
equity analysis and security services and we will continue
calling on their services. We will have a much larger team on
the ground to deal with what we hope will be a much larger
Whenever two established entities merge, there is a risk of
the culture of the two organisations clashing. Is this a concern
I would like to make two points regarding this: I don’t think
that there is much of a cultural difference. I have seen and
heard from many of our staff from OIB that they were former
employees of British Bank of the Middle East. If you look at OIB
and your readers would recognise this, it is a conservative,
traditional bank with very high standards of excellence, and it
is exactly the same with HSBC. There is no culture clash also
because these are two entities that know each other very well.
For example, OIB purchased 12 of our branches and a number of
those staff are still with us. One of OIB’s former general
managers HE Yahya Al Jabri was HSBC’s branch manager in Nizwa
and he rose to be the general manager of OIB and we both know
him as the regulator running the Capital Market Authority before
he became the chairman of the Special Economic Zone Authority at
Duqm (SEZAD). This merger is not new but history repeating
The second point is that how different can cultures be anyway in
banking. It is an incredibly responsible industry where we are
looking after the future of our customers. In terms of retail,
we are allowing them to invest for their families or look after
their savings. On the corporate banking side, we are allowing
companies to grow and that is a national service. So the culture
won’t be dissimilar.
HSBC has very strong values that are well recognised. Our
leading value is courageous integrity and that’s knowing when to
do the right thing and having no fear in doing the right thing.
I believe that this is a universal value and I have seen that my
new colleagues share the same. We break this value into three
things – being very open, so we have an open management style,
and we allow people to speak up and we expect them to do so,
without fear. Secondly, we believe ourselves to be connected –
not just being connected internationally, but being connected
with our customers, regulators and staff, and finally we are
dependable. For HSBC and OIB, we are going to do something we
tend to do. We are focused on things that we have said we will
be doing and a culture clash is not something that I will be
losing my sleep over.
May - 2013
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