Bank Muscat has reported a 12 per cent year-on-year decrease in its profit for the full year 2020. The bank posted a net profit of RO163.36mn for the year ended December 31, 2020 compared to RO185.55mn reported during the same period in 2019.
Bank Muscat announced its full year preliminary unaudited financial results through a disclosure to the Muscat Securities Market on Thursday. It said the financial results are subject to the approval of external auditors, board of directors, the Central Bank of Oman and the shareholders of the bank.
The bank’s net interest income from conventional banking and net income from Islamic financing marginally grew by 1.6 per cent to RO322.13mn in 2020 compared to RO316.97mn reported in the previous year.
Non-interest income, however, dropped by 13.4 per cent to RO134.41mn for the year ended December 31, 2020 from RO155.20mn recorded in 2019. The sharp decrease in non-interest income was mainly due to subdued business conditions due to the COVID-19 related lockdowns in the second, third and fourth quarters of 2020 and waiver of certain fees due to regulatory measures, Bank Muscat said.
Bank Muscat’s loan-book witnessed a slow growth of just 0.5 pr cent last year as net loans and advances (including Islamic financing receivables) increased marginally to RO8.918bn as of December 31, 2020 from RO8.878bn a year ago. While Bank Muscat’s conventional loans and advances marginally deceased by 0.3 per cent to RO7.688bn, its Islamic financing receivables grew by 5.5 per cent to RO1.230bn for the year ended December 31, 2020.
On the other hand, the bank’s customer deposits (including Islamic customer deposits) increased by 4.2 per cent to RO8.377bn at the end of 2020 as against RO8.043bn as of December 31, 2019. Conventional customer deposits recorded a 5 per cent year-on-year growth at RO7.364bn, whereas Islamic customer deposits decreased by 1.8 per cent to RO1.013bn as of December 31, 2020 from RO1.032bn a year ago.
Operating expenses for the full year 2020 were reduced to RO179.85mn as compared to RO195.93mn in 2019, a decrease of 8.2 per cent due to cost management measures taken by the bank.
Bank Muscat’s net impairment for credit and other losses for the year 2020 rose to RO81.04mn in 2020 as against RO56.13mn in the previous year. ‘The increase was mainly on account of precautionary and collective provisions made in the first half of 2020, on a forward looking basis given the emerging stress in the economic and business conditions as a result of the impact of the COVID-19 pandemic and the continued pressure on oil prices,’ Bank Muscat said.