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This was posted in the Oman Daily Observer today

Business news
NBO posts net profit ofRO 45.4m for 2008
By A Staff Reporter
MUSCAT — National Bank of Oman (NBO) announced on Tuesday a net profit of RO 45.4 million for 2008, which it said, reflected sustained evidence of the Bank’s successful growth strategy. The operating profit for the year 2008 increased by 49 per cent to RO 54.3 million compared with RO 36.4 million for the prior year .

The Bank’s Board of Directors has proposed a cash dividend of 17.5 per cent of capital to shareholders subject to receipt of regulatory and shareholder approval. Shaikh Suhail Salim Bahwan, Chairman of the Board of Directors, said: “Our performance continued to be inspired by Oman’s vision and its leadership.

Despite a very turbulent fourth quarter, and after an impairment charge of RO 3.7 million on available-for-sale investment in the income statement, the Bank reported satisfactory results for the full year with a Net Profit of RO 10.5 million for the fourth quarter. Our strategy, that focused on business growth and alignment of business activities with our strategic partner, Commercial Bank of Qatar, has resulted in a robust earnings performance from all of our core businesses. We would also like to acknowledge the trust and confidence of our customers in the services that the Bank provides.”

The Bank’s results for year 2008 indicated sustained growth momentum across all businesses. Net loans and advances grew by RO 494 million to RO 1.4 billion and customer deposits also increased significantly by RO 406 million to RO 1.3 billion during the year. Net interest income grew by 16 per cent to RO 47.5 million and non-interest income climbed by 69 per cent to RO 41 million.

The Bank’s asset quality continued to improve and capitalization ratios remained strong. Operating costs increased by 18.2 per cent to RO 33.8 million over the same period in 2007 as the Bank maintained a strong level of investment in the business. The cost to income ratio improved to 38.4 per cent from 44 per cent in 2007, indicating increased productivity on a year on year basis.

The Bank is committed to further investment in its people, delivery network and established brands that support the Bank’s drive towards achieving increased value for its stakeholders, it said. Non-performing loans have now reduced to 3.5 per cent of total loans and 100 per cent of these are covered by provisions.

The capital adequacy ratio based on the regulatory capital stood at 13.92 per cent according to Basel II requirements of the Central Bank of Oman, comfortably exceeding the mandated requirement of 10 per cent. NBO’s CEO, Murray Sims commented, “The growth in operating profit over the last year has been very encouraging.

We recognise, however, that 2009 will pose significant challenges for the GCC states, with lower crude oil prices expected to slow growth across the region. With the commitment of our employees, the loyalty of our customers, continued enhancement of the strategic alliance with Commercial Bank of Qatar and strong focus on cost discipline and risk management processes, the Bank should be well positioned to meet the challenges that lie ahead. Service delivery improvement to achieve better customer experience remains a key priority for our operations. Going forward, the Bank will focus on expanding customer access and developing value-added propositions and business efficiencies aligned with global best practice.”
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