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27 Apr 2009 07:00
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BankMuscatΒ postsΒ 82 per cent increaseΒ inΒ 2009Β first quarterΒ net profits
MUSCAT - The board of directors ofΒ BankMusact, the leading financial institution in the Sultanate, yesterdayΒ (Sunday, 26 April 2009)Β approved the 2009 first quarter results,Β which recordedΒ a net profit of RO 48.4 million for the three months endedΒ 31Β March 2009 as against RO 26.5 million reportedΒ during the same period in 2008, an increase of 82%.
TheΒ first quarterΒ net profit includes RO 35.3 million of post-tax gain on sale of HDFC Bank investment. The Bank sold 81% of its 2.67% stake in HDFC Bank,Β IndiaΒ in March 2009. The Bank also accounted for RO 7.5 million of impairment losses on its Available-for-Sale investment portfolio in the first quarter.Β
Net interest income increased byΒ 7% to ROΒ 39.6Β million from ROΒ 37.0Β millionΒ inΒ the corresponding period in 2008.Β Β Non-interest income grewΒ by ROΒ 31.5Β million to ROΒ 49.4Β millionΒ as compared to ROΒ 17.9Β million forΒ the same period in 2008 mainly on account of gain on HDFC Bank investment. However, non-interest income,Β excluding the gain on HDFC Bank and realised losses on Available-for-Sale investment,Β isΒ lower by 16% as compared to the same period in 2008.Β
TheΒ Bank has accounted for RO 7.5 million towards realisedΒ (RO 5.8 million)Β and unrealised lossesΒ (RO 1.7 million)Β on the AFS investment portfolio and believes it has substantially de-risked its investment portfolio and therefore does not expect any major write-downs on the AFS investment portfolio during the remaining course of 2009.
The Bank was able to contain the operating expenses in 2009 with various measures to reduce variable cost. Operating expenses for the first quarter 2009 at RO 21.3 million remained around the same level as pervious year.
Impairment for credit losses was ROΒ 11.2Β million as compared to ROΒ 6.5Β million during the corresponding period in 2008, an increase of RO 4.7 million.Β Share ofΒ lossΒ from associatesΒ was atΒ ROΒ 0.3Β millionΒ due to share of loss from Saudi Pak Commercial Bank.Β
The basic earnings per share on an annualised basisΒ wereΒ 81Β baizas for everyΒ 100Β baiza share of the Bank.Β
The Bank's net Loans and Advances of ROΒ 3,778Β million has grown byΒ 26.8% as compared to the positionΒ on MarchΒ 31, 2008. Customer deposits,Β including CDsΒ also sawΒ a growth ofΒ 20.7% from ROΒ 2,671Β millionΒ as of MarchΒ 31, 2008Β to ROΒ 3,225Β million.Β
Commenting onΒ the Bank'sΒ strategic initiatives, Sheikh AbdulMalik bin Abdullah Al Khalili, Chairman, said:Β "Despite theΒ fundamentals of theΒ Sultanate'sΒ economyΒ remainingΒ unchanged, the banking outlook in 2009Β has been influenced byΒ the fall in oil prices and the general slowdown in global economic activity.Β Against this backdrop,Β BankMuscat is focused on raising low-cost deposits, attracting customers with schemes that offer high value proposition."
Notably, the ongoing certificate of deposit (CD) auction accepted a total amount of RO 86.20 million of bids against the subscription of RO 192.10 million till the sixthΒ CD issuance. The Bank targets a total of RO 250 millionΒ from theΒ CD programme within one-year timeframe.Β The objective of the CD programmeΒ is to develop a long-term yield curve for Riyal Omani.
TheΒ Bank, which has always been at the forefront of financial innovation inΒ Oman, launchedΒ a subordinated bond issue carrying 8 per cent annual yield. TheΒ 7-yearΒ bond issue targetsΒ to raise RO 60 million.Β Β The Bond is an extension of the CDΒ initiative, aimed at creating greater visibility on the long end of the Riyal Omani yield curve.Β The subordinated bonds are considered as tier 2 capital and thereforeΒ strengthen theΒ capital adequacy of the Bank.Β
TheΒ Bank's popularΒ al Mazyona savings schemeΒ was relaunched,Β offeringΒ high-value dailyΒ cash prizesΒ of RO 10,000 and RO 1,000Β throughout the year.Β The all-newΒ al Mazyona operatesΒ on the basic principle of rewarding customers daily up to 10 times their balance in their savings amount.Β
In step with eOman launched and led by Information Technology Authority (ITA),Β theΒ BankΒ has been mandatedΒ to launch an e-Purse project as part of the ambitious e-Governance initiative. In another projectΒ implemented during the first quarter,Β MuscatΒ MunicipalityΒ teamed up with BankMuscat to introduce electronic card payment facility for all fee-based municipal services.
TheΒ BankΒ has also beenΒ mandatedΒ as one of the two fund managers of the RO 150 million InvestmentΒ Stabilisation Fund instituted by the government to shore up investor confidence on Muscat Securities Market (MSM).
Committed to serving the community and making a difference to the nation, BankMuscat remains focused on its mission of attracting one millionΒ satisfiedΒ customers by 2010.
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