INNOVATION IN RETAIL BANKING – THE PROMISE Gulf Bank, State of Kuwait 1

Overview Gulf Bank established in 1960, is the second largest commercial bank (excluding the Islamic Bank, KFH), with total assets of USD 17 billion, employing over 1,400 people. Gulf Bank is active in Consumer, Wholesale, Corporate and Trade Finance and Treasury services, with around 13% market share in Loans and Deposits. Gulf Bank has a large distribution network representing 18% market share of branches located in Kuwait. The Bank has amongst its shareholders, Kuwait Investment Authority (Kuwait’s sovereign Fund) and is managed by an independent nine-member board including a representative of Kuwait Investment Authority. The new CEO’s focus was on “rebuilding trust” and on returning the Bank to profitability; the new Management team was given only a 2-year window to do so and established strategic clarity for the Bank. 2

Relevant, Compelling, Differentiating Innovation Review of existing research for source of possible differentiators. Gulf Bank identified it was perceived as having a strong understanding of its customers needs. Hypothesis developed that product differentiation was insufficient. Qualitative research undertaken to investigate customer expectations versus experience – the results were as follows : No banks were delivering against customers’ desired turnaround time for loans (3 days), Credit Cards (2 days), Current Account with KNet Card (1 day) and Salary deposit (same day). Most banks were meeting existing ‘promises’. Further research to understand expectation, if Gulf Bank failed to meet guaranteed TAT. If a bank failed to meet its promises, customers only expected to be advised personally that the ‘promise’ would not be met and when would it be. 3

Domino’s Pizza Project What did we do? Project planning and preparation kick-started during the 1st week of Feb 2011 and clear accountabilities for each of the 5 streams was established. Cross functional teams were set up to work on the process improvement and automation and to manage change management across the network to ensure an effective execution. Marketing & PR team worked with agencies to develop comms strategies. Weekly meetings driven by CEO to ensure Consumer Banking and Support Groups focused on incremental improvement/resolution every week. Reinvented way of doing business - questioned procedures, policies, eliminated duplication, delegated responsibility and accountability. 4

“We Promise” Campaign 5

What was the Customer & Competitor Response to the Campaign? Customer feedback was overwhelmingly positive with over 1000 specific positive comments and less than 20 negative comments. Competitor feedback indicated ‘surprise’ and hoped that it was only a limited time offer as staff received many queries on how could we possibly manage this level of service on a long-term basis. Doubled our loan bookings. ‘Promises’ met in more than 97% of the TATs. Program participation has touched on : 73% of UHNW Customer Base 76% of HNW Customer Base 33% of Mass Customer Base 55% of Business Banking Base. Net Promoter Score increased from 46% in Q3 to 62% in Q4 of 2011. 6

What were the Learnings ? Innovation is too often considered to be something new for early adopters. Transformative innovation is changing the existing rules of the game. Teamwork, respect & empowerment are powerful tools of change. The impact, customer awareness and competitive advantage that can be driven doing what customers want more effectively. Quality assurance during the whole life cycle of the project. Exploiting the existing infrastructure and systems to deliver outstanding improvements in a cost-effective manner. Developed a sense of pride in working for Gulf Bank. 7

Where do we go from here ? “Best and Fastest” service now incorporated as ‘OUR PROMISE’ across the whole bank. Service Delivery Models across the business groups and key segments are now being reviewed for alignment. Embedding the ‘Best and Fastest Service’ as the key element in our image communication. 8

The Next Steps for Gulf Bank Looking ahead, our focus now shifts more towards growth At the same time we recognize that markets remain as challenging as ever; therefore, efforts at further strengthening our balance sheet and governance structure must continue. We have “earned the right” to grow, and we can aspire to become even more relevant – dominant – over the next few years. Our next strategic plan will therefore take a longer (4-year) view. Our ambition is to gain market share without sacrificing returns. 9 13

What have we added since implementation Automated – all promises apply to online banking Corporate Banking – all promises apply to Corporate Banking NPS improved even further 10 13

WE PROMISE % of customers who were served by the “We Promise” campaign and met campaign promise i.e. loans/cards delivered same day and queuing time below 10 minutes

Thank You ! 12