Bank Muscat’s Q1 profit rises 42% on lower provisions

Bank Muscat’s net profit for the first quarter of 2021 rose 41.8 per cent to RO47.15mn compared to RO33.25mn net profit recorded in the same period of 2020, according to the bank’s preliminary unaudited financial results announced on Thursday.

The sharp rise in the first quarter net profit was mainly due to lower provisions recorded by the bank this year compared to the first quarter of 2020.

Bank Muscat’s net interest income from conventional banking and net income from Islamic financing increased by 3.1 per cent to RO83.74mn for the three months period ended March 31, 2021 compared to RO81.23mn for the same period in 2020. Non-interest income rose by 9.6 per cent to RO37.68mn in the first quarter of 2021 as compared to RO34.39mn for the same period in 2020.

The bank’s operating expenses during the January– March period of 2021 decreased by 6.9 per cent to RO47.11mn as compared to RO50.60mn for the same period in 2020.

Bank Muscat said that net impairment for credit and other losses for the first three months of 2021 dropped at RO18.08mn as compared to RO25.73mn recorded in the same period of last year.

‘The decrease in net impairment (for credit and other losses) is mainly attributed to the precautionary and collective provisions created by the bank during the first quarter of 2020, at the onset of the COVID-19 pandemic and the historic decline seen in global crude oil prices,’ Bank Muscat said in a press statement.

The bank added that it remains vigilant of the continuing stress in the macroeconomic and business conditions and its potential impacts.

Bank Muscat’s loan-book grew by 2.2 per cent in the first quarter of this year as net loans and advances (including Islamic financing receivables) increased to RO9.278bn as of March 31, 2021 from RO9.076bn a year ago.

Of total loans and advances, Bank Muscat’s conventional loans and advances marginally increased by 0.8 per cent to RO7.960bn at the end of first quarter of 2021, while Islamic financing receivables substantially grew by 11.5 per cent to RO1.318bn.

Total customer deposits (including Islamic customer deposits) increased by 2.1 per cent to RO8.446bn as of March 31, 2021 against RO8.269bn a year ago.

Of total deposits, Bank Muscat’s conventional customer deposits increased by 1.8 per cent to RO7.372bn in the first quarter of 2021, while Islamic customer deposits rose by 4.6 per cent to RO1.074bn.

Bank Muscat said its full results for the first quarter along with the complete set of unaudited financial statements will be released following the approval of the board of directors at its meeting scheduled later during April.