Bank Muscat (S.A.O.G.) Nine-month Results 2022
Dear Shareholders,
I am pleased to share with you the promising results achieved by Bank Muscat during the nine-month period ended 30 September 2022. The Bank continued to perform well and maintain its leadership position in Oman’s financial services sector.
Financial Overview
The Bank posted a net profit of RO 148.29 million for the period compared to RO 140.16 million reported during the same period in 2021, an increase of 5.8 per cent.
Net Interest Income from Conventional Banking and Net Income from Islamic Financing stood at RO 254.93 million for the nine months period ended 30 September 2022 compared to RO 252.48 million for the same period in 2021, an increase of 1.0 per cent.
Non-interest income was RO 117.02 million for the nine months period ended 30 September 2022 as compared to RO 105.85 million for the same period in 2021, mainly due to higher income from sale of investments.
Operating expenses for the nine months period ended 30 September 2022 was RO 156.18 million as compared to RO 144.33 million for the same period in 2021, an increase of 8.2 per cent.
Net Impairment for credit and other losses for the nine months period ended 30 September 2022 was RO 41.58 million as against RO 46.77 million for the same period in 2021. The decrease is mainly attributed to the precautionary and collective provisions created by the bank during 2021.
Net Loans and advances including Islamic financing receivables increased by 0.8 per cent to RO 9,229 million as against RO 9,158 million as at 30 September 2021.
Customer deposits including Islamic Customer deposits increased marginally to RO 8,709 million as against RO 8,698 million as at 30 September 2021.
Strategic Initiatives & Key Developments
During the quarter, the Board of Directors approved a proposal to optimise the Bank’s current capital structure by proposing a oneoff dividend comprising issuance of bonus shares and perpetual bonds to shareholders. The proposed dividend is designed to improve the efficiency of the Bank’s capital and in turn improve returns to shareholders without impacting the capital position and liquidity.
Bank Muscat entered into an agreement with Bahrain-based SICO BSC, to sell its remaining 27.29 percent stake in SICO Capital KSA (previously Muscat Capital) and acquire an additional stake in SICO BSC in lieu of the sale consideration. The Transaction is now completed and Bank Muscat increased its stake in SICO BSC, which is designated as an associate in the Bank’s financial statements, to 13.14 percent.
Guided by its customer-centric vision, Bank Muscat continued to move further ahead with digitalisation and enhanced ease of banking for customers through a number of well executed plans. The Bank launched the first Soft Token app in Oman to help customers easily authenticate Internet banking transactions using a mobile without the need for carrying a hardware token with them. Meanwhile, registered mbanking customers rose to over 1.36 million users, reflecting overall progress towards a digital economy.
Other important developments included the launch of a new Najahi Helpdesk to enhance the customer experience of small enterprises, while the activation of new sales channels for select insurance products including health insurance, and good growth in motor insurance sales reflected positively on Bancassurance. The Bank’s exciting FIFA campaign, the biggest in Oman, also drew to a close with a grand draw to choose winners of 51 hospitality packages to FIFA World Cup Qatar 2022, courtesy of Visa, during the quarter.
Continuing its customer-centric approach during the bank’s 40th anniversary celebrations, Bank Muscat organised customer meets in business hubs like Salalah and Sohar to enhance its partnership with government institutions and corporates, and to further speed up digital transformation in the country. The Bank sustained its leadership role in facilitating trade and economic development, both in Oman and in the wider region. An all new Trade Portal, accessible through the Corporate Online Banking platform, was launched for online initiation of trade transactions such as issuance/amendment of Letters of Credit, Guarantees and Trade Financing. This is greatly enhancing customer experience, convenience and accessibility.
Meanwhile, Bank Muscat’s investment banking and capital markets franchise maintained its market leadership amid challenging international capital markets and geopolitical developments. The Money Market Fund registered its highest-ever Assets under Management ( AUM) since inception in 2012, a clear recognition of the fund’s ability to deliver attractive returns. The Bank also continued to advise leading government-related entities and corporates in Oman on strategic transactions across debt and equity solutions. Meanwhile, Bank Muscat’s proprietary investments book recorded an impressive growth of more than 25 percent so far this year as the business pursued attractive investment opportunities, which became available amid volatile market conditions.
Meethaq Islamic Banking, which is celebrating its 10th anniversary, continued to grow its asset book at a healthy rate during the quarter. Adding further overall optimism was the good growth in customer deposits as well as an increase in the number of customers, which has now crossed the 114,000 mark. The operating profit and net profit too reflected the continuing growth story of Oman’s leading Islamic banking services provider.
CSR & Sustainability
Bank Muscat is all set to provide free advanced entrepreneurial programme to 30 top graduates of the bank’s Al Wathbah SME Academy as part of its ongoing efforts to support the SME sector in the country in line with goals of Oman Vision 2040.
At the same time, the Bank continues to undertake efforts to develop new services that provide greater accessibility and financial inclusion to people in Oman. Notably, more than 210 employees of the bank in select branches across different governorates have so far completed various levels of Sign Language to better serve hearing-impaired customers. Also, the bank’s Ghubra branch has been suitably equipped as part of a pilot programme, while a further 19 conventional and Islamic banking branches will be ready in the coming months to enable better service delivery to persons with different types of disabilities.
The Bank continued to partner with the Royal Oman Police on its long-running antifraud awareness programme. The latest campaign being carried out across different media channels aims to make the general public aware of new types of cyber fraud like romance scams, fake cryptocurrency trades and money laundering.
Reinforcing its commitment to Omani youth and sports, the Bank announced the 20 beneficiaries of this year’s Green Sports, taking the total number of beneficiaries to 163. Also, to strengthen national development and youth empowerment, Bank Muscat extended its support to the School Beach Games Championship 2022 organised by the Oman School Sports Association in Salalah.
Strong support was similarly extended to a number of tourism-promotion activities including Khareef Dhofar and the inaugural Salalah Eat Festival, in line with commitment to Public-private Partnership. The Bank also completed 6 kiosks in the Wilayat of Bidbid for use by social welfare families and jobseekers.
Awards and Accolades
The Bank continued to demonstrate its leadership role, winning several international and local awards. Bank Muscat was once again named by Forbes Middle East among the Top 30 Banks in the region. It was recognised by Euromoney as the Best Bank in Oman as well as being the Market Leader in Oman for both Digital Solutions and CSR. The Bank also won the Best Corporate Digital Bank and the Best Consumer Digital Bank awards, while Meethaq won the similar Best Islamic Digital Bank Award from Global Finance. Other honours received during this period included the Best Trade Finance Bank in Oman from Global Trade Review, Best Performing Company in the Large Cap category at Alam Al Iktisaad Awards and the Market Leadership Award in Islamic Banking Window Operations at the Global Islamic Finance Awards (GIFA).
In Conclusion
On behalf of the Board of Directors, I would like to take this opportunity to thank all our shareholders for their strong confidence in the Bank. The Board of Directors welcomes and supports the measures taken by the Central Bank of Oman and the Capital Market Authority to strengthen and diversify the financial markets in the Sultanate.
We would like to express our sincere gratitude and appreciation to His Majesty Sultan Haitham Bin Tarik for his wise leadership and pray to the Almighty Allah to bless and protect His Majesty the Sultan and our beloved country as we journey forward on the path of Renewed Renaissance. I would also like to take this opportunity to convey our best wishes to His Majesty the Sultan and the people of Oman on the occasion of the Glorious 52nd National Day.