BBK (Bank of Bahrain and Kuwait) is one of the premier regional financial services enterprise in providing superior products and services of highly quality through innovation, technology and lifelong client relationships. The bank has expanded in its overseas presence in more locations in which it chooses to operate in order to satisfy the diversified needs of clients. Their project and strategy is to gain a competitive advantage by implementing new projects in the Kingdom and abroad. New projects are opening new Financial Malls across the country, acquire and acquisition of business opportunities arises, and therefore be the leading Bank in Bahrain.
The bank have planned to increase its operation abroad through opening it subsidiary company CrediMax in Kuwait market to better support and expand in its credit card services. While their branch in UAE is an investment branch that does not have a commercial banking services; which it differs in Kuwait and India where they have a full commercial bank with all its benefits and activities.
The format of the income statement is in multistep form. The increase in gross profit and net income shows that the bank is growing and it is in the right path within becoming the financial leaders in Bahrain market. The bank is in progress and it shows in its financial statements that the bank is growing and will expand in the future to reach its maximum potential and to benefit from its financial services.
The management may decide to keep a high gross margin from sales and increase sales and the amount of gross margin by increasing operating expenses. You can see that BBK have invested a lot in advertising, by building a new hospital in Muharraq city in the Bank’s name or by the posters on the Highway and commercials in TV.
Even though this shows that most of the banks financing is by creditors, but in a commercial bank as BBK its finance must be from loans, deposits and customer accounts for the bank to operate. But this shows that the creditors are interested in the bank as it pays its creditors with interest. The more debt the bank is the more profit it must earn to ensure the payment of interest to creditors. BBK strong Interest Coverage Ratio of 1.5 shows that it was in no danger of being unable to make interest payments. As the market price is 5 times earnings, investors are paying a high price in relationship to earnings. They do so in the expectations that this bank will continue to be successful. High PE ratios should be interpreted cautiously because low earnings can produce an artificially high PE ratio.
As this is a bank and not company, it does not have most of the liquidity ratios and some other related to inventory and sales ratios.
I personally choose this topic due to their strong project management team that is being reflected in the growth of the country. I work in a competitor Bank, but these facts should be taken into consideration and highly appraise the project management team in BBK. As we studied this course that project management has several benefits to any organization as per the following: a) better efficiency in delivering services b) improved customer satisfaction c) enhanced effectiveness in delivering services d) improved growth and development internally within the organization e) gain competitive advantage f) better flexibility g) increased risk assessment h) increase in quality and quantity.
It would be interesting to see how the coming years will benefit BBK and maybe by this strategy and plan be the leading Financial Institute in the Kingdom.
Operation management in the banking sector is challenging for me since I’m holding the duties of branch manager. Last class we have learned about operation management in the service sector. I didn’t realize that what I’m doing is considered as operation management. As you all know customer wants and satisfaction is the success measure of any business; i.e. if customer left our branch dissatisfied he will be unwilling to deal with the bank and it will affect the bank reputation.
I have just faced customer complaint last week when his car loan application went into a long process over our bank departments. He was saying that his friend applies for the same in other bank and he got the car after three days only. When I contact the other department asking about the reason for the delay it was not reason that will stop processing the loan and the loan can be processed now and then the customer is going to provide us with the requested document.
What I have realized here, bank departments that have no direct customer interaction will not do their job based on customer is first, what they do basically is to make sure that all documents needed are provided.
What do you think about operations, credit and risk department? How can they be involved in providing excellent customer service?
Moreover, the customer was complaining that the customer service representative was not clear about the missing document. I have talked to the customer service representative and realized that she did not read the document properly before sending it to the concern department and at the same time the car loan were approved from three departments without realizing the missing document.
I think the problem was from all departments starting from the front line to the back line. At the end his requested was processed in exceptional bases because the bank policy prohibits processing such loan without the required document.
Do you think the bank policy is a source of not meeting customer expectations? What about exceptions? Does it meet customer expectations?
At the end, the customer gets his car in the same day he raised the complaint and he left the bank satisfied and happy. He will be dealing with the bank as his loan will last for seven years which will leads for a strong customer relationship. As you all realized the problem was from the front line at the beginning, I have explain the problem with the customer service representative and instruct her how to deal with such cases.
How can the customer service representative avoid customer complaint? Is training enough?
With the innovation in technology and services being offered by banks today it would be logical to think that the volume of physical mail being sent out will shrink substantially seeing a corresponding reduction in the amount of return mail. However over the past year my Bank has been facing an issue of having to deal with huge amounts of returned bank statements.
There were various reasons as to why the statements were being returned; in this case it mostly attributed to a change in banking regulation-obliging banks to print statements to all deposit accounts where previously were only printed for specific accounts. With the unanticipated amounts of mail pouring in, it deemed essential to start to analyze all the different reasons to why the pieces returned and what is it costing us. What is the total operational cost of postage, printing, handling, research and re-mailing? What about the value we lost with returned communications? The delayed or missed payments, unawareness of bank charges and the overall customer service expenses?
The bank has already approved a project to centralize, automate and monitor return mail operations. By having all statements to be printed with bar codes and returned back to a central operation that will be able to simply scan the bar codes and capture how many times the statement has returned, and to ultimately stop printing upon the third time. We will also be able to capture all the problematic accounts and attempt to contact the customer in different methods in order to update their information and encourage them to use e-statements.
I have highlighted one small operation that possibly was not be seen to have a dramatic impact on the banks performance but it is a growing problem and may have a huge impact in the future with our customer base growing everyday. As Head of Customer Resolution I am able to see a lot of the operational and process issues we are facing with at the bank through customer complaints, and by taking this class it has stressed the importance of how reducing operations cost is the best method to optimize in an organization. I am also looking forward to learn the importance of managing quality, and conducting process redesigns and how they ultimately lead to improved efficiency, profitability and operational excellence.
This after all is my view, so do you think our Bank is on the right track with their cost management initiatives?