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Critical Success factors of Abu Dhabi Islamic Bank

Contents1.0 Introduction: ............................ ......................... ............................... ............................ ................ 2

2.0 Company Overview .............................. ........................... ........................ .............................. ....... 3

3.0 Critical Success Factors of ADIB ............................ ................................ ...................... .................. 4

3.1 Abu Dhabi Islamic Banks view on Social Awareness and responsibility .............................. .............. 4

3.2 Banking As it should be .................................................................................................................. 6

3.3 Logo and Branding ......................................................................................................................... 8

3.4 Products and Services .................................................................................................................... 8

3.5 Providing Better ways to Bank ........................... ................................ ...................... ....................... 9

4.0 Conclusion ................................ ........................ ............................... ............................ .............. 10

5.0 References .............................. .......................... ............................... ............................ .............. 11

Appendix A ............................................................................................................................................ 12

ADIB First Quarter Report for 2010: ................................................................................................... 12


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1.0 Introduction:

This report will discuss the critical success factors (CSF) of an organization. The organization

that will be discussed in this report is a relatively new organization that has grown

exponentially over the course of a decade. It comes under the name Abu Dhabi Islamic Bank

(ADIB).

CSF basically means the key elements that are practiced by an organization that leads to it its

success. "Critical success factors are those few things that must go well to ensure success for a

manager or an organization, and, therefore, they represent those managerial or enterprise

area, that must be given special and continual attention to bring about high performance. CSFs

include issues vital to an organization's current operating activities and to its future

success." (Boynlon, A.C, Zmud and R.W, 1984)

This report will take an in-depth look into the CSF s of ADIB and try and understand what the

driving forces are behind its success.


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2 .0 Company Overview

Abu Dhabi Islamic bank was officially registered on the 20 th of May 1997. It was listed as a

public joint stock company through the Amiri Decree No.9 of 1997. It officially commenced

operations on the 11 th of Nov 1998 and all contracts and fundamentals practiced by this

organization are carried out in accordance with the principles of Islamic Shari a. (Webmaster [a] ,

2006)

They setup their operations on a capital of One Billion United Arab Emirates Dirham s which

was then divided into a hundred million market shares, with an IPO (Initial Public Offer) of 10

Dirham s per share. Their mission is to provide financial solutions for the community byapplying the principles of Shari a and their vision is to be a top tier Islamic Financial service

group.

Abu Dhabi Islamic Bank P.J.S.C. provides banking, investing, and financing services. It handles

small and medium businesses and individual customers' deposits; and provides consumer and

commercial murabahas, Ijarah, Islamic covered cards and fund transfer facilities, and trade

finance facilities. The company also involves in providing financing and other credit facilities;

and deposits and current accounts for corporate and institutional customers, and high net

worth individuals. In addition, it offers money market brokerage, trading, and treasury services;

and involves in the acquisition, development, sale, and leasing of land and buildings, as well as

management and resale of properties and various other activities. Further, the company

provides deposit products, which include current, electronic, savings, short term investment,

and recurring investment accounts. (Web master [b], 2010) One of the main reasons behind

Abu Dhabi Islamic Banks success is its sense of social responsibility towards the public who

generate its wealth.


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3 .0 Critical Success Factors of ADIB

There are many factors over the last decade that have been practiced by ADIB but the two main

factors which are its driving force, for its monumental growth from obscurity to a regionalfinancial power house are:

y Its sense of Social responsibility

y It strives to make banking as it should be; simple and trusting

y Logo and branding

y Products and services

y Providing better ways to bank

3 .1 Abu Dhabi Islamic Banks view on Social Awareness and responsibility

In the modern world any principles with religious views attached to it are frowned upon. There

are many reasons for this. It could be due to the escalating tensions between the east and the

west, or the general mistrust and stereotyping which are rampant these days.

It is admirable that with all the negative media on Islam in general that ADIB still managed to

grow from strength to strength. While at the same time increasing awareness in regards to

Islamic Banking ethics and attracting more customers who come from various different

religious back grounds.

One of the main reasons behind Abu Dhabi Islamic bank success is that it uses the principles of

Islam as a guide. The reason behind this is because Islam is a religion that helps an individual

navigate, through all aspects of life. It acts as a guide on matters of spirituality, business and

social justice because it takes into consideration the entire socio economic system (Rice, 1999).

For a clearer understanding to the principals which have made Abu Dhabi Islamic Bank very

popular among the general public refer to Table.1. It highlights the ethics behind Abu Dhabi

Islamic Banks practices.


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U nity Justice Trusteeship

Belief in one God Due to its sense of social responsibility

they believe in the eradication of

inequity, injustice, oppression andexploitation. (Rice, 1999)

People believed as trustees of God on

Earth (Rice,1999)

Every customers life is based on this

sense of unity

No bearer of burdens can bear the

burdens of another man can have

nothing but what he strives for

(Quran, 53; 38-9)

Recourses should be gained by the

means of honest dealings and

consumed in the righteous way and the

well fare of everybody should be taken

into consideration in the disposition of

recourses. (Rice, 1999; Faruqi, 1976)

They observe the principles of a sense of

brotherhood and equality.

Uphold promises, full fill contract and

no deception. (Rice, 1999)

Every transaction is regarded as worship

which is conducted in the right way.

(Chapra 1992)

Every customer is considered as an

equal partner.

Basic needs of the poor should be taken

care of. (Rice, 1999)

Constant circulation of wealth. (Chapra,

1992)

Table.1: Abu Dhabi Islamic Bank s Ethical Principals

One of the main reasons ADIB is more successful then a Private bank in a capitalist system is

because a private bank is solely based on personal interest and believes that every possibleaction should be taken for achieving the monetary interest of the owners of a particular

business entity (Fama, 1980; Fama and Jenson, 1983). This is greatly different from ADIB

because they emphasize on trusteeship (Amanah) which is based on Islamic teachings and the

business is considered to be a sacred trust with the managers.

The other reason people find it highly attractive is its sense of morality (right and wrong). They

limit the number of business transactions and don t take part in all forms of business for

investment purposes. For e.g. Interest, gambling, alcohol and pornography are not taken part in

at all due to the belief in a fair social system that takes into account distribution of wealth fairly

to overcome social evils. Many people find this highly attractive because they trust a bank

which steers away from practices which lead to social evils.


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Many banks preach about trust but seldom practice it. This has lead to a growing resentment

felt by the public who feel discarded and not looked after, which has lead them to look for

other options. ADIB emphasizes on trust and practices it rigorously.

The reason behind this is because its people are the primary source of its wealth and they come

first. Managers are expected to always act in a way that is always beneficial for the owner

and not take part in any form of transactions which interferes with the owner s best interest.

That being said they cannot use any means to achieve profit maximization and have to take into

account of overcoming social evils.

The most critical factor for its popularity is that while profit making is not negated in Islam,

doesn t put other stake holders at risk to achieve their objectives (Badawi & Beekun, 2005) and

it reduces the amount of unnecessary claims on recourses (Chapra, 1992)

3 . 2 Banking As it should be

ADIB is also very successful because they strive to make banking as it should be; a bank which is

tailored for the individual. They genuinely care about the individuals who bank with them and

conduct intensive researches to find out new ventures that would suit an individuals needs.

This makes people have a lot of confidence in them because ADIB is introducing a new brand

identity as a symbol of a new promise (Webmaster [a], 2006).

Due to its simplicity and transparency nothing is hidden behind a red tape. It makes sure every

individual is aware of its dealings and that they are on the same side and works on an

individual s success as the building block for its success. Its uniqueness and simplicity is its

biggest success factor.

ADIB is an Islamic institution yet its customers come from various different back ground.

Individuals who have no idea how a Shari a system works, what makes them gravitate towards

ADIB? What factors of their operations attract these individuals?


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We have worked hard to implement these simple but powerful promises in the way we do

business. We have introduced a number of new offerings and improvements already. We

simplified a number of processes from the way we open accounts to the way we deliver

financing solutions. We have been bringing ADIB closer to you by rapidly expanding our

network to 60 branches and ATM network to 256 and by extending branch opening hours in our

in-mall branches and even introduced a 24-hour branch at the Abu Dhabi Airport. We have just

launched an upgraded version of e-ADIB Internet banking to help you bank with us online more

safely and conveniently.

Over the next few months we ll be launching many new products and services. What won t

change is our main priority: your satisfaction. In 2009 we were named one of the Top three

banks in the UAE with the fastest improving customer service*. And improving customer

satisfaction scores** show you re benefiting from the results of our efforts. - ADIB (Webmaster[a], 2006).

In other words they make themselves available to the customers during and off office hours.

ADIB insists on making transactions convenient for individuals and for them to be able to find

them. They also emphasize on simplifying the process of opening a new account with them

which is still a very daunting task at various different organizations. ADIB up holds its promisewhen it says Banking as it should be . This is another reason behind its growing popularity and

success. (Webmaster [a], 2006)

ADIB promises that banking should be simple, easy and work with not profit but mutual benefit

in mind. It should be transparent and honest and helps every individual make the correct

decisions concerning his finance. It treats everyone equally and takes all its practices from

Shari a. Due to all these factors ADIB is very successful and will continue to grow.


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3 . 3 Logo and Branding

They have successfully created a brand which many people around the emirates and

surrounding regions have heard about. When people think ADIB, they think Shari a, trust,honesty and simplicity. ADIB s also coming up with a new logo which captures both their history

and future-on which to build its relationship with all its customers as it prepares to leap into the

new financial year from 2010.

The new logo has a 3D element which captures a unique property of ADIB. This is a promise of

good quality and excellent service. (Webmaster [a] , 2006)

The new logo which is a circle tries to capture ADIB s plans for global expansion from a regional

power house, which they plan to achieve by using experts from various different backgrounds

and field of study. The interlocking crescents symbolize mutual benefit, transparency and

Shari a compliance. (Webmaster [a] , 2006)

This successful utilization of branding and symbolism behind their logo has successfully

captured the hearts and minds of many individuals. When people think ADIB they think honesty

and a bank that keeps their promises.

3 .4 Products and Services

ADIB s ability to always come up with new products for their customers, that are tailor made to

adapt to the financial scenario at any given time and the attention to service is one of their

biggest advantages. ADIB has partnered with Etihad Airways to bring you the most rewarding

Shari a compliant airline card in the UAE, you ll be awarded up to 50,000 Etihad Guest Mileswhen you apply, and earn more miles every time you use your card. The new co-brand cards

will launch in summer 2010. (Webmaster [a] , 2006)

The purpose behind this is to reward their customers and fulfill its obligations to reward the

individuals who contribute to their success.


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They are the first bank in the middle-east to successfully utilize the use of mobile banking into

their system. An individual can check account balances and recharge phone balances and pay

bills in the comfort of his house.

They also provide a service in the form of security to an individual. The new cards issued by

ADIB are armed with the latest state of the art chip technology which has enhanced security.

This is done to give their customers a total sense of freedom and peace of mind. Customers

with the old cards are automatically sent a replacement card to their residences. In addition,

our Covered Cards feature Paywave technology, which enables contactless payments - just

wave your card over the scanner in participating outlets. (Webmaster [a], 2006)

ADIB s very popular among the females for the unique services designed just for them. They

have special services and products to suite the life style of the females and have woman only

areas and branches. In a society where woman find it hard to socialize and move around freely,

ADIB has taken a special interest to their needs and provided them with a service that no other

banks in that region provides except in KSA (Kingdom of Saudi Arabia).

3 .5 Providing Better ways to Bank

The current age people live in everybody makes use of the internet and it has become a way of

life. ADIB has made its online page very simple and easy to use. Customers or potential

customers can find the details the want easily to make the right financial choices.

They make themselves easy to reach by rolling out new branches in diverse locations. .

Inspired by our values, it is designed to provide you with better, more personal service than

ever before by leveraging new technology and best international practices -ADIB


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4.0 Conclusion

Abu Dhabi Islamic Bank has always been associated with taking care of society and being an

honest and transparent financial institution. It is due to this recognition that ADIB has enjoyed

from a strong brand awareness and image. In the 21 st century where people are loosing faith in

the banking system ADIB has grown from strength to strength. It is because of the management

of five simple reasons:

y Its sense of Social responsibility

y It strives to make banking as it should be; simple and trusting

y Logo and branding

y Products and servicesy Providing better ways to bank

At the end of the day a bank should exist for the people and not the other way around. ADIB

has realized this and it is due to this factor they will continue to grow and be successful. Refer

to Appendix A: for a detailed First Quarter Report for the Financial Year of 2010. It shows the

growth of the company due to its adherence to its CSF s.


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5.0 R eferences

1. Al-Faruki. (1976). On the Nature of Islamic Da'wah. International Review of Mission .

65 (2), pp 391-400.2. Boynlon, A.C., and Zmud, R.W. (1984). An Assement of Critical Success

Factors. S loan Managment Review . 4 (25), pp 17-27

3. Chapra, M. 1992. Islam and the Economic Challenge. Herndon: International

Institute of Islamic Thought.

4. Fama,E.. (1980). Agency Problems and Theory of the Firm. Th e Journal of Political

Economy . 88 (2), pp 288.

5. Fama, E.,and Jensen,M.. (1983). Agency Problems and Residual Claims. Th e Journal of Law and Economics . 26 (2), pp 327.

6. Rice.G. (1999). Islamic Ethics and the Implications for Business. Journal of Business

Et h ics. 18 (4), pp 345-358.

7. Web master [a]. (2006). Mission & Objective. Available:

http://www.adib.ae/mission-objectives. Last accessed 11th Nov 2010.

8. Web master [b] . (2010). A BU DHA BI ISLA MIC BANK ( A DIB:A bu D h abi). Available:

http://investing.businessweek.com/research/stocks/snapshot/snapshot_article.asp?ticker=ADIB:UH. Last accessed 11th Nov 2010.


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Appendix A

ADIB First Quarter R eport for 2 010 :

Subject: ADIB First Quarter 2010 Financial Results

Dear All,

I am very pleased to share with you the financial performance highlights of ADIB for the first quarter of

2010. I am sure that you will share my joy at the turnaround these numbers indicate from the last quarter.

I attribute our grand performance in the last quarter to the commitment and dedication shown by all of

you to ADIBs growth and development and to our prudent approach.

It has been a strong performance from all business lines as per the followings:

y G roup operating profit (margin) for Q1 2010 was AED 398.5 million vs. AED 361.3 million

for Q1 2009, an increase of 10.3%.

y G roup net profit for Q1 2010 was a record AED 293.3 million vs. AED 268.3 million in Q1 2009,

an increase of 9.3%.

y ADIB remains the most liquid bank in the UAE as customer deposits grew by 28.4% year-on-

year, and total number of customers increased by 22,983 in Q1 2010 to 365,080

y Total number of branches increased by 3 in Q1 2010 to 55

An ever increasing focus on customer service and delivery channels, along with our outstanding capital

and liquidity position has led to sustained growth in the future. We have continued to enhance our

customer focus while simultaneously applying prudent banking risk practices, continued to win market

share and expand our operations. Investment in 11 new branches in the past 12 months, related

infrastructure and human capital is adding to the growth.

The theme for the coming quarter and indeed for the coming few years is growth. G oing forward, we need

to press on with our plans to achieve our goal of being a leading Islamic bank in the world.We will continue to grow our Retail Banking presence across the UAE, where our target is 70 branches

by year end. A new e-banking platform and growing array of convenience channels will be launched. Our

Wealth Management and Private Banking propositions will be formally launched to customers this year.

The Wholesale Banking franchise will continue to gain momentum as our Corporate Finance and


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Transaction Banking propositions are built to support corporate, commercial and public sector clients. All

of this will be backed by the continued investment in talented individuals and systems to support them.

We need to take full advantage of the UAEs economic growth and leapfrog into the higher league of

world players from being a regional player. Your continued support and commitment will be much

appreciated and rewarded.Thank you,

Tirad

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