National Bank of Oman (NBO) achieved a net profit of RO 9.6 million for the three months ended March 31, 2012, a 24 per cent increase over the comparative period in 2011. Net interest income grew by 21 per cent to RO 16.2 million in the first quarter of 2012. Net spreads improved to 3.23 per cent at the end of March 2012 from 3.14 per cent for the same period in 2011 due, mainly, to the lower cost of funds, Omar Hussain al Fardan, Chairman, stated in the Chairman’s Report of the bank’s financial performance for the quarter.
Operating income increased by 12 per cent to RO 8.6 million in the first quarter of 2012 compared to RO 7.6 million for the same period in 2011. Total expenses were at RO 10.9 million, an increase of 5 per cent over the first quarter of 2011, mainly on account of higher marketing expenses. The cost to income ratio improved from 49.4 per cent as at the end of March 2011 to 44.3 per cent at March 31, 2012.
Net impairment losses for the first quarter of 2012 stood at RO 2.6 million, RO 0.9 million higher than for the same period in 2011 due, mainly, to an increase in impairments of investments classified under the available for sale category.
The non-performing loan ratio improved to 2.8 per cent at March 31, 2012 from 2.9 per cent at December 31, 2011, while the bank’s provision coverage ratio stands at over 100 per cent at the end of the first quarter of 2012.
Total net loans and advances grew by 7 per cent to RO 1.79 billion from RO 1.67 billion at December 31, 2011. Total customers’ deposits grew to RO 1.72 billion at the end of the first quarter of 2012, an increase of 7.5 per cent over December 2011, as the bank increased its low cost deposits by RO 178 million.
The bank’s capital adequacy ratio was 14.5 per cent as at March 31, 2012 compared to 15.3 per cent as at December 31, 2011.
“The bank’s capital position will continue to be carefully managed and maintained at a level well above Central Bank’s minimum requirement of 12 per cent,” the Chairman said.
On Islamic banking, he said NBO is continuing to develop the Islamic banking product and service offerings and is well positioned to take advantage of this opportunity once the regulatory framework is finalized, Oman Observer reported.