In India, <strong>BBK</strong>’s Mumbai and Hyderabadbranches were affected by the high rise ininterest rates and inflation that reflected on theentire banking sector during 2004. However,<strong>BBK</strong> identified new opportunities in bothcorporate and retail banking, introducingsecuritization of rent and credit card receivables,and extending buyers’ credit on imports toIndia. A new insurance-linked deposit product– <strong>BBK</strong> Life Line – was introduced for NRIs inthe Gulf – in association with the NationalInsurance Company. The Bank also boostedfee income by becoming a referral agent ofAviva Insurance Company and NationalInsurance Company for life and non-lifeinsurance products respectively.The Bank’s representative office in Dubaienjoyed a year of increased business activity.Average assets sourced in the UAE increasedby 92%, while total net interest income grewby 120%. <strong>BBK</strong> increased its participation inkey project financing transactions, includinghigh profile projects such as the DolphinEnergy gas transportation initiative betweenthe State of Qatar, the UAE and the Sultanateof Oman; and the Etisalat mobile phoneconsortium in the Kingdom of Saudi Arabia.Important new corporate business was alsosecured with a number of leading companiesacross various sectors of the UAE economy.Community<strong>BBK</strong> has always recognised its responsibilityto contribute to the social well being ofBahrain’s society. To date, over BD 3 millionhas been donated in support of the localcommunity with financial support for numerouscharitable, medical, scientific, cultural, sportingand social institutions and organisations.The Bank’s staff is also closely involved incommunity activities. These are organisedby <strong>BBK</strong>’s Staff Social Committee – whichinitiated events involving Bank employeesand their families with local charities andworthwhile causes.Internal processes<strong>BBK</strong>’s new strategy, implemented in 2003,defined the value addition role of financialcontrol and planning and during 2004 thiswas further evidenced by a number ofinitiatives. <strong>BBK</strong> was one of the first banksin Bahrain to introduce the concept of riskadjustedreturn on capital (RAROC), which is asophisticated tool for measuring the profitabilityof customers against associated risk exposures.In line with best market practice, the conceptof matched funds transfer pricing (FTP) wasfurther refined, helping to determine the actualprofitability of each business unit. The Bank’scustomer profitability analysis continued to beenhanced and is currently being extended to<strong>BBK</strong>’s overseas branches.Eradicating inefficiencies in banking,operations is a key strategic objective of<strong>BBK</strong>, in order to establish cost efficienciesand improve customer service. In 2004, theBank completed the implementation of a fullyautomated Trade Finance System. This willnot only help to increase productivity but alsoenhance client satisfaction, thereby providingan important competitive edge. The newsystem incorporates FaxMaker, whichautomatically informs customers when theirLCs have been processed.Straight through processing (STP) is another keyobjective in achieving operational effectiveness.During 2004, STP was implemented for tradefinance, treasury, and investment advisoryactivities and good progress was made inapplying it to inward remittances, standingorders, and salary processing for corporateclients. New processes were also introducedin 2004 to meet the revised BMA regulationsfor faster and more timely clearing of cheques.TechnologySupported by a strategic investment ofBD 1.7 million, <strong>BBK</strong> initiated theimplementation of new core banking andbranch automation systems during 2004.These major IT infrastructural developmentswill provide significant benefits – to the Bank interms of operational agility and efficiency –and to clients in the form of new sophisticatedproducts and delivery channels, andenhanced levels of service.Another important IT development during theyear was the introduction of InfoGate – theBank’s new information gateway. This willspeed <strong>BBK</strong>’s transition to a ‘smart enterprise’through the provision of an intelligentinformation resource, which will improvemanagement <strong>report</strong>ing, and enable fasterand easier sharing of information by all staff.In a first for Bahrain’s private sector, <strong>BBK</strong>launched a pilot project in 2004 to enablewireless communications between the headoffice and branches. This alternative to atraditional lease line provides a multiple of35 in improved bandwidth, reducingcommunications costs and improvingspeed, reliability and security. Wirelessnetworking has also been introducedwithin the Bank’s head office.
34%Utilization in internet home banking of <strong>BBK</strong> and third party e-channels<strong>BBK</strong> is committed to remaining at the forefront of electronic banking. The number of clienttransactions conducted electronically now exceeds 800,000 transactions, excluding thosethrough ATMs.Annual Report 2004 14 | 15
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