Oman’s Bank Dhofar Q3 Net Profit Declines 10.8%

Bank Dhofar, currently in talks to merge with smaller rival Bank Sohar, recorded a 10.8 per cent decline in third-quarter net profit, Reuters calculated on Sunday.

Oman’s second-largest bank by market value made a profit of OMR8.3 million ($21.6 million) in the three months to Sept. 30 compared to a profit of OMR9.3 million in the prior-year period, Reuters calculated from previous financial statements.

Two analysts polled by Reuters had estimated a quarterly profit of OMR9.2 million and OMR8 million respectively.

Reuters calculated third-quarter profit from previous financial statements. Nine-month profit was reported as OMR49.1 million, according to a statement to the bourse, a significant jump on the OMR28.7 million Bank Dhofar made in the corresponding period of 2012.

The profit hike was fuelled by Oman’s Primary Court returning OMR26.1 million to Bank Dhofar in March after the country’s appeals court overturned a judgement relating to a 2011 case involving Oman International Bank and Ali Redha Trading and Muttrah Holding over the ownership of 1,925,000 Bank Dhofar shares.

The move resulted in first-half net profit more than doubling over the same period of 2012.

Despite the Q3 net profit decline, shares in Bank Dhofar closed Sunday 0.6 per cent higher in light trading. The volume of shares traded on the wider Muscat bourse was also reduced due to much of the region celebrating the Eid al-Adha holiday this week.

Net loans and advances grew 13.7 per cent to OMR1.89 billion from OMR1.66 billion at the end of Sept. 2012. Deposits were also up over the same period, rising 19.3 per cent year-on-year to OMR1.91 billion.

In July, Bank Dhofar said it had approached Bank Sohar with a view to merging the two entities and creating Oman’s second-largest bank, with the latter saying it would consider the move later that month.

The new entity would have total assets worth OMR4.1 billion and a market capitalisation of around $1.8 billion.

Abdul Oman al-Ojaili was appointed acting chief executive of Bank Dhofar on Sept. 26, taking over from Anthony Mahoney who resigned for personal reasons.