HSBC Bank Oman profit drops 4.2pc
Muscat, October 24, 2012
HSBC Bank Oman, formed earlier this year by a merger of HSBC's Oman unit and Oman International Bank, posted a 4.2-percent fall in net profit for the first nine months of 2012 as higher impairments impacted earnings growth.
The lender, now Oman's second-largest by market capitalisation, made a nine-month net profit of 10.57 million rials ($27.45 million), compared with 11.03 million rials in the same period of 2011, a bourse statement said on Wednesday.
Third-quarter net profit stood at 3.4 million rials, according to Reuters calculations based on the bank's half-year financial statements.
It is only the second time that HSBC Bank Oman has published results since its merger - first-half profit at the bank was 7.2 million rials, up 4.3 percent on the corresponding period last year.
Loan impairment charges were the main drag on earnings, rising to 2.3 million rials in the nine months to Sept. 30 versus 0.6 million rials during the same period last year.
"The increase was mainly due to higher general provisions and the downgrade of some customers to non performing advances," the bank said in the statement.
The rise in provisions overshadowed a 60-percent gain in net interest income, which climbed to 26.7 million rials from 16.7 million rials in the same nine-month period of 2011.
The formal completion of the merger was announced at the beginning of June, with HSBC holding 51 percent of the new entity. Previously, OIB was Oman's fifth-largest bank, with the second-largest branch network in the country and gross assets of $3.2 billion.
Earlier this month, one of Oman's richest businessmen increased his shareholding in the bank to 25 percent from 18.39 percent. - Reuters
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