Arab National Bank in Financial Cards and Payments (Saudi Arabia)

STRATEGIC DIRECTION
¦ Arab National Bank will continue to invest strongly in its infrastructure during the forecast period and aims to differentiate itself through a focus on targeted banking and high technology. The bank is for example set to expand its Affluent Ladies Center branches throughout the country, with these focusing on high-income female customers. The bank also opened a new high-tech branch in Riyadh in January 2013. This offers interactive digital touch-screen kiosks, the first of their kind in Saudi Arabia, with these offering product information and offering information on eligibility for consumer credit and potential loan amounts. December 2012 meanwhile saw the bank launch a new generation of ATMs, offering real¬time product information thanks to a direct link to the bank’s headquarters.
KEY FACTS
Summary 1 Arab National Bank: Key Facts
Full name of
company: Arab National Bank
Address: PO Box 56921, Riyadh 11564, Saudi Arabia
Tel: +966 (1) 402 9000
Fax: +966 (1) 402 7747
www: www.anb.com.sa
Activities: Islamic and conventional banking, including personal current and savings accounts,
corporate current and savings accounts, private banking, mutual fund management, brokerage, consumer finance, financing, investment, telephone banking, mobile banking, online banking, Tadawul, international brokerage, ATMs and POS
Source: Euromonitor International from company reports, company research, trade press, trade sources
Summary 2 Arab National Bank: Operational Indicators
20 0′ 2011
SR3.9 billion SR3.5 billion SR3.9 billion
SR2.4 billion SR1.9 billion SR2.2 billion
Source: Euromonitor International from company reports, company research, trade press, trade sources
COMPANY BACKGROUND
¦ Arab National Bank was established in Saudi Arabia by Royal Decree in 1979, taking over the existing operations of Arab Bank, which had previously been founded in 1949. Arab Bank owned about 40% of Arab National Bank at the end of the review period, while the governments of Saudi Arabia and Kuwait together owned around 8%. The remaining share is held by around 5,000 Saudi shareholders. Arab National Bank is listed on the Saudi Stock Exchange.
¦ The bank offers a comprehensive range of personal, commercial and investment banking, including mortgages/housing. The bank is also one of the largest providers of remittance services in the country.
¦ The bank has a number of subsidiaries and affiliates, with ANB Invest being its investment banking arm. Al-Arabi Heavy Equipment Leasing is 63% owned by the bank and specialises in lease-financing for heavy equipment. Saudi Home Loans is meanwhile 40% owned by the bank in partnership with the International Finance Corporation and Dar Al-Arkan, with this focused on mortgages/housing.
¦ The bank is in the process of creating an insurance company in partnership with MetLife Alico and Chartis (AIG).
¦ The company focused on increasing its personal banking revenue towards the end of the review period, for example promoting card lending with its Free Shopping for a Whole Year campaign. Any customer using ANB credit cards or Al Mubarak charge cards from 28 January to 28 March 2012 was entered into a draw to win free shopping for a year or one of 100 other cash prizes.
¦ The bank had 189 branches in Saudi Arabia at the end of the review period, including 44 outlets specifically dedicated to women. The bank’s headquarters are in Riyadh, while the bank also operates regional offices in Jeddah and Khobar. The bank meanwhile operates 980 ATMs and around 10,000 POS terminals.
¦ Beyond Saudi Arabia, the bank has operated a branch in London since 1991. This mainly focuses on Saudis who are regular visitors to the UK or who have business or investment interests in the country.
COMPETITIVE POSITIONING
¦ Arab National Bank ranked fifth in overall card payment transactions in 2011 with a value share of almost 6%. This was mainly derived from debit cards, where the company has its largest share of transaction value at 7% and ranked fourth. The bank meanwhile accounted for 5-6% transaction value share in both commercial and personal credit cards and charge cards in the year. The bank’s strength in debit cards results in it having a higher card volume share in comparison to transaction value share, with the bank ranking fourth in overall financial cards with 10% card volume share in 2011.
¦ The bank gained share marginally in overall card volume in 2011 over the previous year. However, it lost share in card payment transactions, with this linked to increasing competition. Despite seeing a strong current value growth of 11 % in card payment transactions in 2011 over the previous year, the company remained slightly below overall growth as many international players increased their focus on Saudi Arabian financial cards.
¦ The bank is highly innovative. For example, the bank benefited from focusing innovation on female customers towards the end of the review period. In addition to its existing women-only branches, the bank launched its Affluent Ladies Center in Riyadh in May 2012, providing a comfortable environment and swift and smooth services that are targeted to high-income women. The bank plans to expand this concept to all major cities in Saudi Arabia.
¦ The bank offers a wide range of financial cards and benefits from a large customer base. It offers both conventional and Islamic banking and thus attracts a wide range of consumers in Saudi Arabia.
Summary 3 Arab National Bank: Competitive Position 2011
Product type Value share Rank
Charge Card Transactions 5.4% 4
Credit Card Transactions 5.6% 7
Debit Transactions 7.3% 4
Source: Euromonitor International from company reports, company research, trade press, trade sources, trade interviews
make analysis for the cases by using the points mentions dounw and make font size 7
Guidelines for Conducting Case Analysis

Current Situation………………………………………………………………………….

Issue…………………………………………………………………………………………

Mission……………………………………………………………………………………..

Objectives……………………………………………………………………………………….

PEST Analysis:
Political…………………………………………………………………………….
Economic…………………………………………………………………………..
Social………………………………………………………………………………
Technology………………………………………………………………………..

External Analysis– Porter’s Five Forces:
Barriers to entry…………………………………………………………………….. .
The Bargaining Power of Suppliers……………………………………………….
The Bargaining Power of Buyers…………………………………………. ………
Competitive Rivalry…………………………………………………………………..
The Threat of Substitution………………………………………………………….

Opportunities……………………………………………………………………………
Threats……………………………………………………………………………………..
Overall evaluation of the external environment………………………………….

Internal Analysis:
Organizational strategy…………………………………………………………….
Value chain analysis………………………………………………………………..
Strengths…………………………………………………………………………….
Weaknesses…………………………………………………………………………
Market share……………………………………………………………………….
Overall evaluation of the internal environment………………………………….

Key Success Factors…………………………………………………………………………

Alternatives (Strategic Choice of Business Strategies and Corporate Strategies)

Criteria Matrix to Evaluate Alternatives ……………………………………………..

Recommendation…………………………………………………………………………….

Action Plan……………………………………………………………………………………

Contingency Plan …………………………………………………………………………….

References..…………………………………………………………………………………

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