BankMuscat’s Results Soar
BankMuscat (SAOG), the nation’s premier bank has achieved a net profit of RO 45.4 million for the year ended 31 December 2005, as against a net profit of RO 34.1 million for the year ended 31 December 2004, an increase of 33.1%. The results are subject to regulatory and shareholder approval.
Net interest income increased by 3.8% from RO 75.2 million in 2004 to RO 78.1 million in 2005. However, Net interest income has increased by 9.1% when compared with Oman Operations of 2004. Non-interest income grew from RO 22.8 million in 2004 to RO 23.3 million in 2005, an increase of 2.2%. On a like-to-like basis, Non-interest income increased by 17.6% in 2005. Operating profit of RO 57.3 million in 2005 is 3.6% higher than the RO 55.3 million achieved in 2004. Operating expenses of RO 44.3 million in 2005 are higher by 3% than RO 42.7 million incurred in 2004. The Cost to Income ratio for the year was at 43.5% as compared to 43.6% in 2004.
The return on average assets improved from 1.95% in 2004 to 2.33% in 2005. The return on average equity improved from 20.0% in 2004 to 20.2% in 2005. The basic earnings per share increased from RO 0.493 in 2004 to RO 0.642 in 2005.
The Bank’s net loans and advances portfolio grew by RO 43 million to RO 1,372 million as at 31 December 2005 compared to RO 1,329 million as at 31 December 2004. However, net loans and advances portfolio of Oman operations grew by RO. 157 million, an increase of 12.9%. Customer deposits grew by RO 171 million to RO 1,333 million as at 31 December 2005 compared to RO 1,162 million as at 31 December 2004. Savings deposits increased by 17.7% from RO 287 million as at 31 December 2004 to RO 338 million as at 31 December 2005.
The Bank made loan loss provisions of RO 24.4 million during the year compared to RO 20.4 million made during the year ended 31 December 2004. Loan loss provision charge of RO. 24.4 million for the year 2005 includes RO. 13.2 million towards general loan loss provision as per the requirement of Central Bank of Oman. As of 31 December 2005, the Bank has fully met the general loan loss provision requirement of Central Bank of Oman though banks are allowed to comply by 2006. The Bank holds a general loan loss provision of RO 22.2 million as at 31 December 2005. During the year 2005, the Bank has recovered RO 15.9 million from provision for possible credit losses compared to RO 6.3 million in 2004. In addition, the Bank made a recovery of RO. 1.9 million from provision for placements in 2005.
It may be recalled that on 1 January 2005, the Bank’s Bahrain branch was disposed off to a newly formed bank by the name of Bank Muscat International (BMI), in which the Bank acquired 49% stake. Investment in BMI is accounted as investment in associate using the equity method. Accordingly, the results of Bahrain operation are not consolidated line-by-line in the Bank’s results of 2005 whereas the comparative figures of 2004 include the results of Bahrain branch.
The Bank made a net profit of RO. 2.8 million in 2005 representing the excess of sale consideration over net assets of Bahrain branch, on disposal of the branch. The Bank’s associates contributed RO. 3.7 million as share of profits during the year 2005 as against a net loss RO. 1.4 million of 2004.
The Board of Directors are pleased to recommend a cash dividend of 40% and stock dividend of 10% for the year 2005, subject to due approval by the shareholders and regulatory authorities, thus keeping up the practice of consistently providing good returns to shareholders.
About BankMuscat (SAOG)
With assets worth over US $ 5.2 billion, BankMuscat (SAOG) is the largest bank in Oman today with a strong presence in Corporate Banking, Retail Banking, Investment Banking, Treasury, Private Banking and Asset Management. The Bank has a network of 90 branches in Oman and a representative office in Dubai (UAE). BankMuscat also has a strategic stake in Centurion Bank, a private sector bank in India and has recently set up BankMuscat International (BMI) an independent Banking entity that will be focused on becoming a truly GCC regional bank.
The international financial and banking community has lauded BankMuscat’s performance and pioneering efforts at setting new standards of excellence in the Banking industry in Oman and in the countries in which it operates across the region for several years now. BankMuscat holds the rare distinction of being voted the ‘Best Bank in Oman’ four times in a row by The Banker, FT London, five times by Euromoney and Global Finance Inc. The Bank was awarded the People Development Award at Oman Awards for Excellence, in 2003 and 2004. Last year, the Bank also won the prestigious Gulf Excellence Award for Oman.