Aggressive moves on retail banking [Archives:2004/742/Business & Economy]

By Peter Willems
Yemen Tiems Staff
A number of banks in the Yemeni market have been developing retail banking in the last few years. But International Bank of Yemen's pace of unleashing new products and services this year may put the bank out front, taking retail banking further in the banking sector.
“We are focusing on offering a wide variety of retail products to give our customers what they need,” said Ahmed Al-Absi, General Manager of International Bank of Yemen. “This should help increase our customer base.”
International Bank of Yemen will be the first in Yemen to initiate a point-of-sale service. Customers will be able to use cards to make purchases at retail outlets, such as supermarkets, restaurants, hotels, pharmacies, gas stations and hospitals.
This week a team from India and Dubai has been implementing the system, and according to Al-Absi, the point-of-sale service will be up and running at 200 locations early next month.
The bank's goal is to have 1,000 outlets using point-of-sale by the end of the year.
“This will be very convenient to customers,” said Al-Absi. “They will not have to worry about going to get or carrying cash. They will be able to buy nearly everything with only a card.”
International Bank of Yemen is also expanding on its ATM network. Along with ATMs at some of its branches, it has placed four ATMs standing alone away from the branches in different locations in Sana'a. By mid-July, 19 independent ATMs will be operating in the capital and 10 others will be located in other major cities, such as Aden, Taiz, Hodeidah and Ibb. The bank's goal is to have up to 100 ATMs operating across the country by the end of the year.
Last month, International Bank of Yemen was the first bank in Yemen to offer services to customers using mobile phones. The Short Message Service (SMS) gives customers the convenience of checking on information without going to the bank. Information for customers includes balances, transactions, bill payments and the time to collect new checkbooks, ATM cards or credit cards.
The bank has also been aggressive in the world of plastics. It has secured important relationships with two major credit card companies: It is the Representative of American Express and the Principal Member for Visa in Yemen. It is now the sole provider of American Express cards, and in the next few months, Visa cards issued by Yemeni financial institutions will be carried out through International Bank of Yemen.
According to Al-Absi, the development of debit and credit cards will make life of customers easier. Different cards, such as American Express, Visa and Mastercard, will be accepted at the bank's ATMs and the outlets involved in point-of-sale. The advantage of using plastics will not only be for local clients; foreigners who have cards issued in other countries will be able to use them in Yemen as well.
Although International Bank of Yemen has decided to become more aggressive on the retail banking front, branching out into new territory is not new. It has been the agent for Western Union for a few years, and it now has 60 different locations across Yemen offering fast money transfers to and from over 190 countries.
Yemeni banks have paid more attention to developing retail banking recently to help boost their fee-based income and attract more customers. Arab Bank, based in Amman, Jordan, and the largest bank operating in Yemen based on total deposits, was the pioneer in offering new products and services to customers in the local market.
It was the first to setup ATMs both at its branches and at public locations. Arab Bank was also the first to issue credit cards under the bank's name and offer phone banking.
When Yemen Gulf Bank was established in 2001, one of its main goals was to focus on retail banking to attract customers. Soon after it opened, it was the first bank in Yemen to offer online banking.
International Bank of Yemen is expecting positive results focusing more of its attention on offering new products. Al-Absi expects the bank's fee-based income to jump from 15% of total income to 30% and gross profits to increase from $900 million in 2003 to $1.6 billion this year.
And the bank is expecting the results not from just offering more products, but from offering more at a fast pace.
“Our goal is not only to develop retail products, but to get them out at a very rapid pace,” said Al-Absi.
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