(MENAFN- Muscat Daily) Muscat- Bank Muscat reported a net profit of RO176.82mn for the year ended December 31, 2017 compared to RO176.56mn reported for the year 2016, an increase of 0.1 per cent.
The bank announced its unaudited preliminary results for 2017 to the Muscat Securities Market on Monday. Its net loans and advances, including Islamic financing receivables, grew 4.7 per cent to RO8.33bn as of December 31, 2017 from RO7.96bn a year ago.
Customer deposits, including Islamic customer deposits, decreased 0.5 per cent to RO7.42bn from RO7.46bn as at December 31, 2016, according to a press release. Bank Muscat's net interest income from conventional banking and income from Islamic financing rose 2.6 per cent to RO281.34mn for 2017 compared to RO274.15mn in 2016.
Non-interest income at RO154.62mn was higher by 8.9 per cent compared to RO142.03mn in the previous year. This includes a one-off investment gain of RO12.8mn on sale of certain investments. The bank's operating expenses for 2017 rose 5.7 per cent to RO184.08mn from RO174.08mn in 2016.
Impairment for credit losses was RO63.15mn for 2017 as against RO70.29mn in 2016. Recoveries from impairment for credit loss was RO41.17mn for the year as against RO36.24mn in 2016. Bank Muscat said its share of income from an associate for the year was RO2.44mn against RO1.73mn for the same period in 2016.
In December 2017, Bank Muscat's investment in Al Salam Bank was reclassified from an equity associate governed under International Accounting Standards (IAS) 28 to available-for-sale investment under IAS 39 due to change in significant influence. 'Unrealised loss at the time of reclassification from equity associate to available-for-sale investment of RO17.54mn has been accounted in the income statement,' Bank Muscat said. EFG-Hermes, in a research note, said that Bank Muscat's net income for the fourth quarter of 2017 came at RO46.6mn, which is 17.4 per cent higher compared to the corresponding period of 2016. 'Fourth quarter earnings exceeded our forecast of RO40.4mn by 15 per cent.
The key driver of the earnings beat is higher-than-expected non-interest income likely on the back of non-recurring investment gains. Revenue growth in the fourth quarter surprised positively, up 20 per cent year-on-year, mainly boosted by strong non-interest income'.
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