Bank Muscat Q1 Profit Drops 25.1%, Misses Forecasts

Bank Muscat, Oman’s largest lender, posted a 25.1 per cent drop in first-quarter net profit, missing analysts’ forecasts, as it booked a provision after some of its prepaid travel cards were hit by fraud.

The lender made a quarterly profit of OMR25 million ($64.9 million) in the three months to March 31, compared with a profit of OMR33.4 million in the prior-year period, it said on Wednesday.

Five analysts polled by Reuters had, on average, estimated a first-quarter profit of OMR26.5 million.

The bank’s shares were trading down 0.9 per cent at 0630 GMT on the Muscat bourse. The shares have risen 10.4 per cent year-to-date.

Bank Muscat made a OMR15 million one-off provision after some of its prepaid travel cards were hit by fraud, it added.

The lender said in late-February it would have to take an impairment charge of up to OMR15 million after a small number of the cards were hit by fraud – an amount United Securities calculated was around 10.5 per cent of the bank’s estimated 2013 earnings.

The cards allow users to carry currencies abroad rather than using their debit or credit cards in foreign countries, which can be expensive.

Credit impairments for the three-month period stood at OMR7.4 million, down 40.8 per cent on the corresponding period of 2012, the bank said..

Loans and advances grew to OMR5.49 billion at the end of the first quarter, up 10 per cent from OMR4.99 billion at the same point last year. Deposits increased nine per cent over March 31, 2012, the bank said, rising to OMR5.51 billion from OMR5.06 billion.

Bank Muscat priced a $500 million bond on March 18, the first time it has printed a dollar deal since 2004.

It also raised OMR75.1 million through an equity placement with the International Finance Corporation, a unit of the World Bank, in February.