BankMuscat shareholders approve annual results of the bank

The shareholders of the Bank duly considered and approved the report of the Board of Directors, the report on Corporate Governance and the Auditor's Report and financial statements of the Bank for the financial year ended 31 December 2007. The shareholders also approved the Board of Director's recommendation to distribute cash dividends at the rate of (50%) of the issued share capital of the Bank (being 50 Baisa per share) for the financial year ended 31 December 2007.

It may be recalled that BankMuscat declared its audited financial results in February this year prior to approval of the shareholders. The Bank achieved a net profit of RO84.2m for the year ended 31 December 2007, as against a net profit of RO60.4m for the year ended 31 December 2006, an increase of 39.4%.

Net interest income increased by 25.1% from RO99.8m in 2006 to RO124.8m in 2007. Non-interest income grew from RO30.8m in 2006 to RO48.1m in 2007, an impressive growth of 56.2% as a result of increased business volumes, product cross selling and new products & services. Operating profit of RO102.6m in 2007 is 32.7% higher than the RO77.3m achieved in 2006. Operating expenses of RO70.3m in 2007 are higher by 31.8% than RO53.3m incurred in 2006. Increase in operating expenses was attributable to increase in salary costs and other administrative costs due to expansion of delivery network, products and business lines. The Cost to Income ratio for the year was at 40.6% as compared to 40.8% in 2006.

The return on average assets was at 2.35% in 2007 as compared to 2.4% in 2006. The return on average equity substantially improved from 21.9% in 2006 to 25.8% in 2007. The basic earnings per share increased from RO0.066 in 2006 to RO0.090 in 2007, which works to be a return of 90% on a nominal value of a share.

The Bank's net loans and advances portfolio grew by RO852m or 46.4% to RO2,687m as at 31 December 2007 compared to RO1,835m as at 31 December 2006. Customer deposits increased by RO505m or 27.8% to RO2,322m as at 31 December 2007 compared to RO1,817m as at 31 December 2006. Savings deposits had an impressive growth of 53.5% from RO426m as at 31 December 2006 to RO654m as at 31 December 2007.

The Bank made loan loss provisions of RO17.8m during the year compared to RO18.4m made during the year ended 31 December 2006. Loan loss provision charge of RO17.8m for the year 2007 includes RO9.2m towards non-specific loan loss provisions as per the requirement of Central Bank of Oman. The Bank holds a non-specific loan loss provision of RO40.2m as at 31 December 2007. During the year 2007, the Bank recovered RO7.7m from provision for possible credit losses compared to RO7.3m in 2006.

The Bank's associates contributed RO5.5m as share of profits during the year 2007 as against a RO4.1m in 2006.