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Sohar International reports 39percent decline in first quarter net profit

22 Apr 2020

Sohar International Bank on Tuesday reported a 39.2 per cent decline in net profit for the three months period ended March 31, 2020 at RO6.17mn. The bank had a reported a net profit of RO10.15mn in the same period of 2019.

Sohar International’s operating income declined by 9.4 per cent to RO23.07mn in the first quarter of 2020 as against RO25.45mn in the same period of last year, according to the bank’s preliminary results disclosed to the Muscat Securities Market (MSM).

Sohar International’s loan book grew by 5.3 per cent as the bank’s net loans and advances rose to RO2.461bn as of March 31, 2020 from RO2.336bn a year ago. Similarly, total assets also grew by 10.6 per cent to RO3.415bn as of the end of the first quarter of 2020 from RO3.087bn a year ago.

With the bank’s strong focus on funding diversification, its customer deposits jumped by 17.2 per cent to RO2.13bn as of March 31, 2020 from RO1.818bn a year ago.

‘By adopting a prudent approach in anticipation of the deteriorating operating environment following the outbreak of COVID-19 and maintaining cost efficiency, Sohar International has been working closely with its clients to support them through these unprecedented times,’ the bank said in its disclosure to the MSM.

The bank said its net impairment charges and other credit risk provisions for the first three months of 2020 was at RO5.03mn compared to RO2.54mn a year ago.

‘Increase in impairments reflect both IFRS9 credit provisions as well as an element of management overlay in response to expected credit deterioration due to the economic impact of COVID-19 outbreak and lower oil prices,’ Sohar International said.

Earlier in April, Sohar International disclosed a direct exposure of RO3.45mn to the UAE-based troubled NMC Healthcare, the Middle East’s largest hospital operator.

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