Bank Muscat posts net profit of RO 113m for 9M 2020

Key feature: Noninterest income was RO 96.72 million this year, compared to RO 113.76 million for the same period in 2019, a decrease of 15.0 per cent mainly due to subdued business conditions due to COVID-19 related lockdowns in Q2 and Q3 2020 and the waiver of certain fees due to regulatory measures.

WASHIINGTON: US business formation soared 77 percent in the third quarter, hitting the highest level on record despite the coronavirus pandemic, according to government data.

Applications for tax identification numbers surged to 1.6 million in the period from July to September, the highest posted since the government began keeping records in 2004, the commerce Department said.

The biggest increases were in the country’s Northeast and Midwest, while the West lagged but still saw a jump of 60 percent.

The gains were all the more remarkable because applications increased in the second quarter as well, during the height of the Covid-19 shutdowns, so the surge was not a rebound from a bad period.

Randal Quarles, the Federal Reserve’s vice chair for supervision, noted the positive data report in a speech Wednesday where he gave an upbeat view of the economic recovery.

“I attribute a good portion of that strength to the inherent dynamism and flexibility of the American economy,” Quarles said.

And though he noted the “deeply depressed” labor market, with unemployment falling hardest on low-income households, he said, “I am optimistic that the recovery from the COVID event will continue to be robust.” The report does not break down the type of businesses being created, but more than a third were companies highly likely to pay wages.

Leading Omani lender Bank Muscat announced its preliminary unaudited results for the nine months ended September 30, 2020. The bank posted a net profit of RO 113.21 million for the period compared to RO 141.43 million reported during the same period in 2019, a decrease of 20.0 per cent.

Net Interest Income from Conventional Banking and Net Income from Islamic Financing stood at RO 240.07 million for the nine months period ended September 30, 2020 compared to RO 237.97 million for the same period in 2019, an increase of 0.9 per cent.

Non-interest income was RO 96.72 million this year, compared to RO 113.76 million for the same period in 2019, a decrease of 15.0 per cent mainly due to subdued business conditions due to COVID-19 related lockdowns in Q2 and Q3 2020 and the waiver of certain fees due to regulatory measures.

Operating expenses was RO 137.19 million this year as compared to RO 144.54 million for the same period in 2019, a decrease of 5.1 per cent. Net Impairment for credit and other losses for the nine months period in 2020 was RO 64.82 million as against RO 38.14 million for the same period in 2019. The increase was mainly on account of precautionary and collective provisions made in the first half 2020, on a forward-looking basis, given the emerging stress in the economic and business conditions as a result of the impact of COVID-19 and the continued pressure on oil prices, the Bank said.

Net Loans and advances including Islamic financing receivables decreased by 1.3 per cent to RO 8,846 million as against RO 8,965 million as at September 30, 2019. The reduction in the loan book is mainly attributable to prepayment of certain large corporate exposures in the last quarter of 2019.

Customer deposits including Islamic Customer deposits increased by 6.7 per cent to RO 8,714 million as against RO 8,164 million as at September 30, 2019.

“The full results for the nine months ended September 30, 2020 along with the complete set of unaudited financial statements will be released following the approval of the Board of Directors of the Bank at its meeting scheduled later during October 2020,” Bank Muscat added.