Bank Muscat (BKMB) H1 2024 earnings summary

Executive summary

• Net profit for H1 2024 rose 7.5% year-over-year to RO 112.12 million, reflecting resilience amid global challenges and growth in both conventional and Islamic banking segments.

• Maintained strong market leadership in Oman with a 34% share of total assets and 31% of deposits as of June 2024.

• Digital banking adoption increased 17% year-over-year, with a 51% rise in PoS and e-commerce transactions and a 22.7% surge in transaction volumes.

• The branch network expanded to 185 branches, with new service centers and accessibility enhancements.

• The bank maintained its leadership in project finance and investment banking, with assets under management reaching approximately US$3 billion.

Financial highlights

• Net interest income and Islamic financing income rose 3.2% to RO 191m in H1-24; non-interest income increased 13.2% to RO 75.27m.

• Operating profit reached RO 164m, up 6.5% year-over-year; operating expenses increased 4.8% to RO 102.13m.

• Net impairment losses remained stable at RO 29.96m; provision coverage at 1.64x NPLs.

• Net loans and advances including Islamic financing receivables increased 3.3% to RO 10,209m; customer deposits including Islamic deposits rose 5.3% to RO 9,563m.

• Earnings per share for the period was RO 0.013, up from RO 0.012 a year earlier.

Outlook and guidance

• Economic growth in Oman is expected to remain moderate in 2024 due to extended oil production cuts, with acceleration above 4% projected for 2025.

• IMF projects Oman GDP growth of 0.9% in 2024 and 4.1% in 2025, supporting continued sector stability.

• The bank expects mid-single digit growth in credit and deposits, aligned with economic recovery and government initiatives.

• The bank continues to focus on digital transformation, financial inclusion, and expanding its service network.

• Short-term volatility in asset quality is anticipated, but credit costs are expected to remain stable at around 0.5%.