Bank Muscat posts slight Q4 profit rise

Bank Muscat posts slight Q4 profit rise

Q4 net profit 30.4 mln rials - Reuters calculations; Slightly ahead of analysts' expectation, Q4 2010 numbers; Full-year net profit up 15.6 percent

January 15, 2012 2:35 by Reuters

Bank Muscat, Oman’s largest lender by market value, posted a fourth-quarter net profit of 30.4 million rials ($79 million), a small rise on the same quarter last year, according to a regulatory filing posted on Sunday.

The net profit was 3.1 percent higher than the 29.5 million rials that the bank reported in the same three months of 2010, according to Reuters calculations, and was just ahead of the average forecasts of five analysts, who expected 30.1 million rials.

Full-year net profits for the bank stood at 117.5 million rials, a 15.6 percent rise on the 101.6 million rials it reported for 2010, the statement said.

Impairments for the final three-month period stood at 15.3 million rials, taking them to 56.2 million rials for 2011.

While this was 20.6 percent higher than the 2010 full-year impairments, Joice Mathew, United Securities’ head of research said the figure was manageable in the context of wider growth at the bank.

“Provisions continue with the same trend as carried from the third quarter,” Mathew said. “Given the huge size of assets and 20 percent increase in loan book, this is quite okay.”

Net lending and advances grew to 4.82 billion rials at the end of 2011, up from 4.01 billion rials at the same point in 2010.

“It’s positive Bank Muscat is keeping up its momentum on loan additions,” Mathew said.

“We expect the same trend to continue in 2012, albeit at a slower pace, on the back of increased government spending.”

Deposits increased 31.7 percent in 2011, the bank said, rising to 4.85 billion rials from 3.68 billion rials at the end of 2010.

However, Mathew added the shrinking spread between deposit and loan rates was impacting on the bank’s operating income, causing it to miss United Securities’ own expectations.

Net interest income for the fourth-quarter was 52.2 million rials, down from the 54 million rials it posted in the third quarter of this year but up slightly on the 50.1 million rials it recorded in the final three months of 2010.

Bank Muscat’s shares were down 0.5 percent at 0623 GMT. ($1 = 0.3850 Omani rials) (By David French; Additional reporting by Matt Smith; Editing by Reed Stevenson)