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BankMuscat posts RO 33.4 million Q1 net profit; board approves results

MUSCAT, 23 April 2012 – BankMuscat, the flagship financial services provider in the Sultanate, on Monday (23 April 2012) announced the Q1 financial results, approved by the board of directors.

The Bank posted net profit of RO 33.4 million for the three months ended 31 March 2012 compared to RO 27.8 million reported during the same period in 2011, an increase of 20 per cent. Net interest income at RO 54.4 million in Q1-12 compared to RO 53.7 million in Q1-11 an increase of 1.2 per cent. There was a one-off income in Q1-11 net interest income and hence the year on year comparison shows only a marginal increase. But for the one-off income, the net interest income would have increased by 13 per cent. Non-interest income at RO 24.6 million was higher by 8.8 per cent compared to RO 22.6 million for the three-month ended 31 March 2011. Operating expenses for the three-month period ended 31 March 2012 at RO 33.5 million increased marginally by 6.5 per cent as compared to the same period in 2011. Increase in operating expenses is mainly attributable to increase in manpower cost.

Impairment for credit losses for the three-month period in 2012 was RO 12.5 million as against RO 13.1 million for the same period in 2011. Recoveries from impairment for credit losses was RO 5.8 million as against RO 3.0 million for the 3-month period ended 31 March 2011. Share of profit from associates was RO 32 K for the three months ended 31 March 2012 as against a share of loss RO 1.8 million in Q1'11.

Net Loans and advances increased by 24.7 per cent to RO 4,988 million as against RO 3,999 million as at 31 March 2011.Customer deposits, including CDs, increased by 33.5 per cent to RO 5,055 million as against RO 3,787 million as at 31 March 2011. The increase in customer deposits was driven by mix of both low cost deposits and term deposits.

The Bank's strategic initiatives during the Q1 period included board approval to raise additional capital of RO 100 million through rights issue and RO 57.75 million (USD 150 million) through private placement of shares with a reputable international institution.

The Board of Directors also assigned RO 150 million capital for the proposed Meethaq Islamic banking window operations. The final allocation will be determined by business opportunities in the market and the assigned amount may increase if required. The capital allocation is subject to regulatory approvals.