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Bank Muscat announces preliminary results for the first quarter of 2013

MUSCAT, 17th April, 2013: Bank Muscat, the flagship financial institution in the Sultanate, announced its preliminary results for the first quarter of 2013. The Bank posted a net profit of RO 25 million for the period, compared to RO 33.4 million reported during the same period in 2012. An exceptional operating loss provision of RO 15 million relating to the Prepaid Travel Card fraud incident (as disclosed to the market on February 25, 2013 and February 26, 2013) has been considered in the first quarter accounts in accordance with IFRS. The Bank is working on various channels to recover the loss arising from this exposure and will update the market on any material developments in this regard.

 

The Bank’s key business lines continued to perform well and in line with expectation and market potential. The Bank commenced its Islamic Banking window ‘Meethaq’ at the start of the quarter and is now offering a suite of Islamic banking products to its clients. We maintain a complete segregated book of accounts for Meethaq business in compliance with Sharia rules and the Central Bank of Oman Islamic Banking Regulatory Framework. Meethaq financial results are consolidated in the Bank’s financial statements for the purpose of consolidated financial reporting and include appropriate disclosures relating to Islamic Banking business.

 

The key highlights of the results for the period are as follows:

 

1)      Net interest income for conventional banking stood at RO 54.9 million for the first three months of 2013 compared to RO 54.4 million for the same period in 2012. The Net Interest income did not increase in line with the asset growth in 2013 due to reduction in net interest margins.

2)      Net Income from Islamic Financing for the first quarter in 2013 stood at RO. 1.5 million.

3)      Other Operating Income at RO 24.3 million was comparable to RO 24.6 million for the first quarter of 2012.

4)      Operating expenses for the first quarter of 2013 at RO 51.3 million as compared to RO 33.5 for the same period in 2012.  Excluding the operating loss provision as stated above, bank's operating expenses would have increased by 8% as compared to the first quarter in 2012.

5)      Impairment for credit losses for the first quarter period in 2013 was RO 7.4 million as against RO 12.5 million for the same period in 2012.

6)      Net Loans and advances increased by 10 per cent to RO 5,486 million as against RO 4,988 million as at March 31, 2012. Customer deposits, including CDs, increased by 9 per cent to RO 5,506 million as against RO 5,055 million as at March 31, 2012.

7)      Islamic financing receivables amounted to RO 188 million during the quarter and Islamic Banking customer deposits amounted to RO 126.4 million.

 

Key figures

Q1-2013

(millions)

Q1-2012

(millions)

Net interest income and income from Islamic Financing

56.4

54.4

Other operating income

24.3

24.6

Operating expenses

51.3

33.5

Operating profit

29.4

45.5

Net profit

25.0

33.4

 

The full results of the first quarter period ended March 31, 2013 along with the complete set of financial statements will be released after the approval from the Board of Directors at its meeting scheduled later during April 2013.