• Home
• /
• Business

National Bank of Oman cuts loss by 96 per cent

It said net loss last year was just RO242,426.

The loss before taxation totalled RO1.9 million but, after a deferred tax credit, resulted in a net loss of RO262,426, chairman Khalfan bin Nasser al Wuhaibi said.

Operating profits grew by 23 per cent from RO26.6 million to RO32.6 million. Mr Wuhaibi said: "For the third consecutive year there was a heavy level of provisioning for impaired indebtedness which in aggregating RO 35.3 million, more than surpassed the level of operating income. The board of directors has decided to pass the dividend for the second consecutive year.

Markets, which were expecting the bank to report a much higher loss, reacted favourably to the announcement with NBO shares rising to RO1.390 on Monday from Sunday's closing of RO1.310 on the Muscat stock exchange.

"Provisions arose in the proportion of 51 per cent in Oman and 49 per cent in respect of overseas debtors, reflecting the harsh impact of economic adversity especially in the Egyptian operations."

Deposits grew from RO547 million to RO593 million, an increase of eight per cent. Inter-bank borrowings were reduced by 30 per cent to RO178 million. Net advances declined by five per cent from RO719 million to RO683 million. Loan loss provisions of RO35.3 million were up 12 per cent over 2001.

John Finigan, chief executive officer, described the results as very disappointing, but said the bank had drawn up a seven-fold mission to restore profitability and re-build shareholder value. He added that the bank's capital position remained strong with a BIS capital adequacy ratio of 13.3 per cent at the year end, in excess of the minimum level stipulated by Central Bank of Oman.

He said: "With a unique customer franchise, a branch network of 55 offices staffed by over 1,250 dedicated, diligent and well-trained personnel we have a strong underlying business model."

He added that in the immediate future NBO would continue to face margin and volume pressures on short-term earnings but he felt confident that these would be restored to more appropriate levels before too long.