In: Operations Management
Case:
Barwa Bank has announced the formal completion of its legal
merger with Qatar International Bank (IBQ). This merger will lead
to the union of two of the most dynamic and dynamic financial
institutions in Qatar and the formation of a strong banking entity
in compliance with Islamic Sharia law at the local and regional
levels, supported by high levels of liquidity and solvency. In
light of the first banking merger in the history of Qatar, the
joint entity will enjoy a solid financial position with a total
assets of more than 80 billion riyals and a strong shareholder base
and customers, Barwa Bank will be able to expand the scope of its
operational activities and develop its products and services in
line with the growing expectations of customers and shareholders
alike. .
Consequently, Barwa Bank will provide a variety of products and
services that meet the needs of the customers of both banks, while
adhering to strict quality control and ensuring that they are
always achieved based on the latest banking technologies and
innovations. The joint entity will also continue to operate through
the network of existing branches of the two banks during the
transitional period, where employees will provide clients with
services that are in compliance with Islamic Sharia.
Source: Islamic Securities Company
Answer all questions please:
1. What are the desired goals for each of the banks participating
in this process? What are the positive and negative aspects of each
bank?
2. Explain the factors that must be considered in order to ensure
the successful implementation of the merger?
3. What kind of change has occurred in the participating
banks?
4. Assuming that you are the CEO of Barwa Bank, Qatar International
Bank, what change could be more effective for increasing the market
share of the two banks compared to the merger that was
implemented?
1. Desired goals for both the banks are -
Barwa Bank ->
The scope of the operational activities of Barwa Bank will expand a lot.
It's products and services will develop in line with the growing customers and geographical area too.
New products and services will also be launched looking at the new market opportunities.
Latest banking technologies will be implemented and innovations will take place.
Qatar International Bank ->
The quality control will improve.
It's reach in the local market and small towns will increase.
Thus it would be providing banking services to the common people of Qatar.
Negative of Barwa Bank - It does not have reach in the international market. Thus the technology and services are also not latest.
Negative of IBQ - It's reach is not good in small towns. Also the quality control is not that good.
2. Following things must be kept in mind during the merger -
A) The services should not hault for a longer period as it would create difficulties for the customers.
B) New services and technologies should be implemented gradually rather than suddenly.
C) No cash issues should be there during the transition period.
3. Barwa Bank will be able to expand the scope of its operational activities and develop its products and services in line with the growing expectations of customers and shareholders alike.
IBQ will improve its hold in the local market and also the quality control.
4. The first thing to be considered is the number of branches present.
The branches with low scope and customer base needs to be shut. This will reduce the expenses and improve the focus on more productive branches.
It needs to be checked how much employees are actually required after the merger. No need to waste revenue in extra employees.
During the transition period there is a need to hire contractual staff as there would be a lot of paper work for the customers.