BankMuscat net profit up by nearly 26%
BankMuscat has achieved a net profit of RO 34.1 million during the year ended 31 December 2004 as against a net profit of RO 27.1 million for the year ended 31 December 2003, an increase of 25.8%. Net Interest Income has grown by 9.3% from RO 68.8 million in 2003 to RO 75.2 million in 2004. Non-interest income has also grown from RO 19.8 million in 2003 to RO 22.8 million in 2004 an increase of 15.1%. The operating profit of RO 55.3 million in 2004 is 13.1% higher than the RO 48.9 million achieved in 2003. The operating expenses of RO 42.7 million in 2004 are 7.7% higher than the RO 39.7 million incurred in 2003. The Cost to Income ratio for the year improved from 44.7% in 2003 to 43.5% in 2004.
The return on average assets has improved from 1.75% as of 31 December 2003 to 2% as of 31 December 2004. The return on average equity has improved from 21.5% as of 31 December 2003 to 22.9% as of December 31,2004. The basic earnings per share has improved from RO 0.498 as of 31 December 2003 to RO 0.570 as of 31 December 2004.
BankMuscat commands a market share of 36.7% in terms of total assets, 37.5% in terms of total credit and 34% in terms of total customer deposits. The Bank’s share of total savings deposits was 35.1% as at 30 November 2004.
The Bank’s net loans and advances portfolio grew by RO 85 million to RO 1,329 million on 31 December 2004 compared to RO 1,244 million on 31 December 2003. Customer deposits have grown by RO 83 million to RO 1,162 million on 31 December 2004 compared to RO 1,079 million on 31 December 2003. Savings deposits increased by 21% from RO 237 million on 31 December 2003 to RO 287 million on 31 December 2004.
The Bank issued RO 29.8 million worth of bonds with a coupon rate of 6.25% during the year. The bonds, which were very well received by investors, are non-convertible in nature, with a maturity of 10 years and listed on the Muscat Securities Market. Further, the Bank issued floating rate notes amounting to USD 250 million under its Euro Medium Term Note programme. The notes carry a floating rate interest rate of Libor plus 70 basis points. These are non-convertible and listed on the Luxembourg Stock Exchange.
The Bank made loan loss provisions of RO 20.4 million during the year ended 31 December 2004 compared to loan loss provision of RO 21.8 million made during the year ended 31 December 2003. The Bank holds a general loan loss provision of RO 8.9 million as at 31 December 2004. The Bank has recovered RO 6.3 million from classified assets in 2004, compared to RO 6.1 million in 2003.
The Bank absorbed a net loss of RO 1.42 Mio for the current year from its Indian associate, Centurion Bank (CBL). CBL as part of its restructuring, recapitalisation and clean up plan as agreed with the investors reported a loss for the year ended 31 March 2004, which is the financial year-end for CBL. Our share of loss was RO 2.07 Mio. Having effected a total clean up of the balance sheet as of 31 March 2004 CBL has now announced a profit for the 9 months ended 31 December 2004. The Bank’s share in the profit amounted to RO 0.65 million. We are confident that CBL is now well positioned to achieve sustained business momentum and profitability with a strong new management team and strategy in place.
The Board of Directors recommended a cash dividend of 49.9 percent for the year 2004, subject to shareholders and due regulatory approvals, thus keeping up the practice of consistently providing good returns to the shareholders.