National Bank of Oman (NBO) has reported a 19 per cent growth in net profit for full-year 2012 on the back of good growth in assets and low-cost deposits. Net profit grew to RO40.7mn in 2012 from RO34.2mn in the previous year.
In preliminary numbers posted on the Muscat Securities Market (MSM) website on Sunday, NBO said net interest income increased 15 per cent to RO67.2mn from RO58.2mn, while operating income rose seven per cent to RO98.6mn from RO92.2mn a year ago.
Speaking to Muscat Daily, V Balasubramanian, chief financial officer at NBO, said that growth in assets and a good deposit-mix helped the bank achieve higher net interest income.
He said, “We have managed to bring down the cost of funds as there has been a quite strong growth in low-cost deposits helping us to a good spread. However, there is the continuing impact from the regulatory changes in retail lending last year, but we believe that our spread-loss has been lower than the market average. Operating income would also have been better without the regulatory changes.”
NBO's loans and advances grew 14 per cent to RO1.91bn in 2012 from RO1.67bn a year ago. Customer deposits rose 18 per cent to RO1.88bn compared to RO1.6bn in 2011.
Balasubramanian said that with a 14 per cent growth in its loan book, the bank might have reflected the overall credit growth in the market.
“We were aggressive in lending to some sectors, but also decided shy away from some deals. On the corporate-loan side we grew strongly, but at the same time we also choose to grow cautiously depending on the quality of assets,” he said.
NBO's total assets increased 14 per cent to RO2.54bn from RO2.23bn a year ago. Its operating expenses rose seven per cent to RO46.7mn in 2012.
He added that 2013 will be a challenging year for the banking sector in terms of competition.
“We will wait and watch to see how things roll out this year. Banks that are more innovative in product offerings and competitive in pricing are going to be more successful and we are focusing on these things,” added Balasubramanian.