Bank Muscat posts H1 net profit of RO90.5mn

Date

7/14/2016 12:46:52 AM

(MENAFN- Muscat Daily) Muscat-

Bank Muscat has posted a net profit of RO90.47mn for the six-month period ended June 30, 2016, a marginal increase of 0.7 per cent from the RO89.82mn net profit reported during the corresponding period last year.

Announcing its preliminary results, the bank said net interest income from conventional banking stood at RO124.42mn for the first six months of 2016, compared with RO115.45mn for the same period last year, an increase of 7.8 per cent. Net income from Islamic financing jumped 27.7 per cent to RO11.76mn from RO9.21mn a year earlier.

Bank Muscat's non-interest income at RO74.58mn was 1.2 per cent lower compared with RO75.51mn a year ago. Operating expenses increased 2.4 per cent to RO86.12mn from RO84.13mn.

The bank said impairment for credit losses for the six-month period of 2016 was RO32.72mn, as against RO27.6mn in the same period last year. Recoveries from impairment for credit losses were RO15.66mn compared with RO16.49mn last year.

Bank Muscat's loan book grew by 7.1 per cent as net loans and advances increased to RO6.85bn as on June 30, 2016. This stood at RO6.39bn a year earlier.

Customer deposits marginally decreased 0.1 per cent to RO6.9bn from RO6.91bn.

EFG-Hermes, in its note, said Bank Muscat's second quarter 2016 net profit stood at RO46.7mn and came ahead of its estimates of RO41.8mn on lower-than-expected provisioning costs.

'Apart from an almost halving of credit costs, there is not much in the results to highlight. Revenues eased on lower non-interest income - driven by a slowdown in volume growth. We estimate that net interest spreads were broadly stable on a quarter-on-quarter basis, while operating costs eased marginally compared to the previous quarter,' EFG-Hermes said.

EFG-Hermes added that bank's loans and deposits were flat in the second quarter on a quarter-on-quarter basis, suggesting slow business activity during the quarter. It added that credit costs eased to 28 basis points in the second quarter of 2016 from 59 basis points in the first quarter, as NPL recoveries doubled on sequential basis.

Bank Muscat's Islamic finance receivables jumped by 61 per cent to RO749mn as of June 30 this year compared to RO465mn a year ago. Islamic customer deposits amounted to RO733mn compared to RO510mn a year ago.

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