Agenda
I. Bank Muscat Introduction 4
II. Operating Environment 7
III. Bank Muscat Business Overview 12
IV. Financial Performance 23 I. Bank Muscat Introduction Bank Muscat at a Glance
Overview Ownership
#1 Bank in Oman with a significant customer base in excess of 1.2 million clients and a workforce of 3,210 employees as of 31st December 2012 Royal Court Established in 1982, headquartered in Muscat with 136 branches across Affairs Oman, 2 branches overseas, and 2 representative offices 25%
. Fully diversified commercial bank offering corporate and retail banking Local Market services 45% Ministry of Defence . Primarily domestic dominated operations with over 95% of operating Pension Fund income generated in Oman 7% . Meethaq – pioneer of Islamic Banking services in Oman, officially Civil Services launched in January 2013 Pension Fund Rated A1/A-/A- 4% Listed on the Muscat stock exchange with a market cap of US$3,305 million as of 28th February 2013 GDR Dubai Financial . Largest market capitalization in Oman 6% Group LLC 13%
Bank Muscat Growth – Footsteps of a Leader Throughout Decades
Merger between Establishment Acquisition of the Acquisition of strategic Muscat Capital LLC Meethaq launched of Bank Muscat Bank of Muscat & Bahraini operations stake in Mangal Keshav launched Bank Al Ahli Al Omani of ABN AMRO Holdings
1982 1993 1996 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Merger with Dubai Rep Acquisition of 49% 1st Branch in st Singapore Rep Commercial Bank 1 Branch in Office stake in BMI Bank Saudi Arabia Office 4 of Oman Kuwait Source: Bank Muscat. Bank Muscat – Key Highlights
Dominant Franchise in Oman
Largest Bank in Oman with a market share of 38% in terms of assets as of 31st December 2012 Largest branch network with 136 domestic Solid Capital Position branches Highest Government Ownership Well established and recognized brand Strong capitalization levels offering room for Highest Government Ownership among substantial growth Omani Banks CAR of 17.0% as of 31st December 2012* . Royal Court Affairs: 25% Indirect Government ownership of c.15% through various funds
Stable Asset Quality Stable Operating Environment
Conservative lending approach Solid macroeconomic conditions Ratings: A1/A-/A- Strong risk architecture and policies Stable banking sector Adequate asset quality metrics . Prudential regulatory environment
Strong Financial Metrics Management
Most profitable bank in Oman Stable and experienced management with Strong and sustainable profitability metrics proven track record of successful organic and inorganic growth . Operating profit 2007-2012 CAGR of 13% Good corporate governance . Net profit 2007-2012 CAGR of 11%
*pre – dividend 5 II. Operating Environment Sultanate of Oman – Overview
(1) Overview Key Indicators 2011 2012E Sovereign Ratings A1/A/- 2nd Largest country in the GCC with an area covering approx. 309.5 thousands Current Account US$10.2bn US$8.9bn Km2, strategically located, sharing borders with Saudi Arabia and UAE International Reserves US$14.3bn US$14.7bn Stable Political System – Monarchy led by His Majesty Sultan Qaboos who commands wide popular support and respect from Omani citizens Net Public Debt (% GDP) 4.5% 4.3% Afghanistan (1) Economist Intelligence Unit – January 2013 Population of 2.77 million predominantly represented by Omanis which account for 70.6% of the total population Pakistan . Young and active population with over 49% below the 25 years age bracket Libya Egypt Saudi Resilient and Solid Economy Arabia India . Stable macroeconomic conditions supported by hydrocarbon revenues and North government spending plans Oman Chad Sudan . Expansionary fiscal policy to finance infrastructure projects, ports and tourism Yemen sector development “Vision 2020” – diversification program aiming at reducing economic reliance on oil revenues and the hydrocarbon sector contribution to GDP GDP Growth GDP Composition – “Vision 2020” US$ billion 12.8% 2010 2020 72.6 5% 4%1% 8% 19% 60.7 59.2 13% 48.2 41.8 5% 17% 36.8 4.8% 4.0% 47% 6.7% 14% 17% 5.5% 1.1% 8% 16% 26%
2006 2007 2008 2009 2010 2011 Petro activities Manuf., mining & construction GDP in Current Prices (US$bn) Real GDP (% Change) Trade, Tourism & Real Estate Transport & communication Others FIs 7 Agri & Fishing Source: BankMuscat Prospectus, Central Bank of Oman and EIU January 2013 Report.
Oman Banking Sector – Overview
Overview Loans and Deposit Growth
US$ billion Gross Loan: +17.1% The Omani banking sector comprises of 7 local banks, 2 specialized banks, and 9 Deposits: +16.9% foreign commercial banks 37.2 36.8 . The top 3 banks contribute to around 60% of total sector assets of which Bank 32.5 32.7 Muscat represents 38% 25.5 27.9 27.3 23.8 Conservative and Prudent Regulator 24.0 22.5 . A number of regulations and caps in place to support the growth, stability and 16.9 16.9 sustainability of the Omani banking sector Royal Decree introducing Islamic banking activities in Oman . Two new Islamic bank franchises “Al Izz” and “Nizwa” . A number of licenses to existing banks including Bank Muscat’s Al Meethaq Adequate asset quality with relatively low impaired assets and sound 2007 2008 2009 2010 2011 2012 capitalization Gross loan Deposits Oman in the GCC banking sector context(1) BICRA Positioning – Group 4
US$ billion 11.5% Economic Industry Country BICRA Risk risk Canada ► 2 2 2 Saudi Arabia ► 2 3 2 6.1% 6.3% UK ► 3 4 3 USA ► 3 3 4 Brazil ► 4 5 3 1.8% 481.3 2.2% Kuwait ► 4 4 5 2.2% Oman ► 4 4 4 Qatar ► 4 4 5 UAE ► 5 5 5 462.4 225.4 168.9 Bahrain ► 6 6 6 47.8 54.4 Spain ► 6 7 5 Ireland ► 7 7 7 UAE Saudi Arabia Qatar Kuwait Bahrain Oman The Omani Banking Sector carries a BICRA score of 4 and is well positioned on a GCC, emerging Total Assets NPL/ GLs market and global basis
8 Source: GCC Central Bank websites and S&P BICRA Report February 2013. Notes: (1) Moody’s as of February 2013 and Central Bank websites based on the latest available figures for the GCC banking sectors. US$/ AED: 3.67, US$/ SAR: 3.749, US$/ QAR: 3.64, KD/ US$: 3.528, and OMR/ US$: 0.385 Bank Muscat – Unrivaled Leading Market Position in Oman
Total Assets (1) Gross Loans (1)
US$ million US$ million Bank Muscat 20,555 Bank Muscat 15,096
National Bank of Oman 6,592 National Bank of Oman 5,159
HSBC Bank Oman 6,267 Bank Dhofar 4,540
Bank Dhofar 5,568 HSBC Bank Oman 3,360
Bank Sohar 4,642 Bank Sohar 3,042
Oman Arab Bank 3,251 Oman Arab Bank 2,426
Ahli Bank 2,855 Ahli Bank 2,439
Deposits (1) Net Profits (1)
US$ million US$ million
Bank Muscat 13,968 Bank Muscat 362
National Bank of Oman 4,901 National Bank of Oman 106
Bank Dhofar 4,246 Bank Dhofar 98
HSBC Bank Oman 4,809 Oman Arab Bank 36
Bank Sohar 3,474 Ahli Bank 56
Oman Arab Bank 2,386 Bank Sohar 60
Ahli Bank 1,918 HSBC Bank Oman 15
9 Source: Banks’ financial Statements.(1) Information for all banks as of December 2012 except for Oman Arab Bank (OAB) as of June 2012. OMR/ US$: 0.385. Bank Muscat – Dominant Domestic Franchise in the Region
Sector Contribution – Assets Sector Contribution – Deposits
Assets as % of Total Sector Assets Deposits as % of Total Sector Deposits
44.7% 59.0% 37.8% 34.7% 37.9% 19.9% 28.1% 17.5% 17.0% 14.9% 21.7% 20.7% 20.2% 18.5% 9.8% 9.0%
QNB BM NBK NCB ENBD NBAD BBK CBQ QNB BM NBK NCB ENBD BBK NBAD CBQ
Asset Quality Adequate Capitalization
21.0% 20.6% 19.9% 17.5% 17.0% 17.0% 17.0% 14.8% 142.5% 116.3% 114.8% 121.4% 2.7% 1.0% 6.8% 95.4% 21.0% 0.6% 1.6% 94.2% 71.5% 3.7% 14.2% 1.0% 13.8% 38.7% 17.2% 16.5% 16.4% 15.4% 9.1% 13.8% 13.3%
2.9% 3.0% 3.4% 4.0% 1.1% 1.3% CBQ QNB NCB BM NBAD NBK BBK ENBD QNB ENBD NBAD NCB BM NBK CBQ BBK NPL/GL LLR/NPL Tier 1 Tier 2
10 Source: GCC Central Banks. Banks’ financial Statements.(1) Information for all banks as of December 2012 except for Bank of Bahrain and Kuwait (BBK); as of December 2011. OMR/ US$: 0.385 III. Bank Muscat Business Overview Bank Muscat – Organisation Structure
Chief Internal Auditor, GM Chairman’s Office, AGM Board Secretary, DGM Board
Chief Risk Officer, GM Chief Executive
Compliance, AGM
Chief Operating Officer
Group General Manager Group General Manager Group General Group General Manager Retail, Investment and Global Corporate and Intl. Manager Corporate Services Markets Operations Islamic Banking
Investment Bkg Asset Mgmt Project International Retail, Treasury, IT, Ops and HR, CFO, A Corp. Comm. & FI, and Private Finance, Ops, Credit, GM GM AGM Infrastructure, DGM GM and CSR, DGM Bkg, DGM DGM AGM GM AGM
Fin. CEO Saudi Br, Credit and Branches, Investment Corporate Control, Planning AGM Recovery, IT, DGM HR, AGM DGM Bkg, AGM Banking & Ahmed F Al AGM AGM Balushi Strategy, AGM
COO Saudi Br, Operations, Direct/ AGM DGM Inst. Sales, AGM Overseas Ops. SME, AGM Ahmed Al Ojaily Ops, AGM PMO, Planning CEO Muscat & Control DGM Cards and Capital, AGM E-Banking, AGM Abdulwahed Al Murshidi Support Services, DGM
12 Bank Muscat – Business Lines
Key Highlights Asset Contribution Profit Contribution
Leading Corporate Bank Franchise offering the US$8.7bn as of 2012 US$123.7mn as of 2012 Corporate full array of corporate banking services . 42% of total asset . 34% of total profit Banking c. 4,000 corporate customers in Oman Strong expertise in project finance
Leading Retail Bank platform in Oman US$6.0bn as of 2012 US$159.4mn as of 2012 Retail Banking Over 1.25 million retail customers in Oman . 29% of total asset . 44% of total profit Largest distribution network and leading online platform
Comprise of treasury, brokerage, corporate US$3.8bn as of 2012 US$99.8mn as of 2012 Wholesale finance, asset management and private banking . 18% of total asset . 28% of total profit Banking services Financial Institutions
Presence in GCC, India and Singapore through US$1.9bn as of 2012 (US$21.4mn) as of 2012 International overseas branches, rep offices and subsidiaries . 9% of total asset . NM* Operations
Fully fledged Islamic product and services offering capabilities Meethaq OMR 150mn (c.US$388mn) capital assigned to this business Officially launched in January 2013 with a plan to expand the network to 7 branches
13 Bank Muscat Strategy – Key Pillars
Capitalize on growth opportunities in Oman . Infrastructure development projects and Government focus on economic diversification and developing tourism . Omanis entering the workforce; over 49% of the population less than 25 years old Consolidate Leading Leverage large network of branches and other delivery channels Position in Oman . Platform to focus on the growth potential . Cross sell opportunities Focus on fee based income . Scale up fee driven businesses both in the retail (credit card, asset management, private banking) and corporate (investment banking) segments
Leverage on existing Pioneering investments in technology supporting growth plans platform and . Increase efficiency investments . Continuous customer service and support improvements
Strengthen regional presence through focused and controlled expansion in GCC Regional Expansion . Leverage existing regional presence to scale up business growth
Focus on Islamic Banking Meethaq – Islamic banking platform . Full fledged product and service offerings, standard of excellence, customer centric approach and Developments in Oman transparency
14 Corporate Banking
Overview Opportunities Strategy
Leading Corporate Banking Franchise Large number of infrastructure/ Industrial Leverage on leading position and expertise projects in the pipeline . Extensive and expanding range of products . Reinforce presence in Oman across all and services Privatisation and diversification drive by segments in the value chain Government . Strong project finance capabilities . Benefit from large infrastructure and Increasing business flows between Oman industrial projects in Oman Large corporate client portfolio with c.4,000 and regional countries customers and lead bank for top tier Omani Focus on less capital intensive and fee corporate entities income generating business High level of sophistication differentiated . Explore contractor financing opportunities through technology led investments Utilize presence in regional markets Commitment to maintain strong control over . Grow GCC trade flows share asset quality
Corporate Loans – Peer Asset Growth Operating Income Comparison US$ million US$ million 9.15 US$ million
2.66 2.49 2.26 2.05 1.46 1.30 8,752 206 213 226 7,107 162 177 5,556 5,696 6,038 132 3,680 NBO
Bank 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Ahli Bank Total Assets Operating Income Bank Sohar Bank Oman Arab HSBC Oman BankMuscat Bank Dhofar Bank 15 . Retail Banking
Overview Opportunities Strategy
Leading Retail Banking Franchise in Oman Government spending resulting in job Leveraging on leading presence in the retail creation segment . Over 1.25 million customers Increase in salaries through various . Increase penetration and cross sell . Front-runner across retail banking government initiatives segments including cards, bancassurance Technology-led product development and and remittances Favorable demographics service offerings . Over 49% of the population less than 25 Largest delivery channel network in Oman Enhance process efficiency years old (136 branches, 406 ATMs, 143 CDMs and the Focus on development and utilization of best online platform in Oman) Housing finance e-delivery channels Substantial low cost retail deposit base Merchant acquiring market share of over 65% by volume in 2012 and leading ecommerce business in Oman
Retail Loans – Peer Comparison Asset Growth Operating Income
US$ million US$ million 5.95 US$ million
2.50 2.05 1.09 1.00 1.04 1.14 6,097 6,005 425 5,188 357 4,862 4,954 303 300 298 3,082 220 NBO
Bank 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Ahli Bank Total Assets
Bank Sohar Bank Operating Income Oman Arab HSBC Oman BankMuscat Bank Dhofar Bank 16 . Wholesale Banking
Overview Opportunities Strategy
Treasury: funding, asset and liability Significant cross-sell opportunities to other Strengthen Bank Muscat’s leading position in management requirements, offer structured wholesale banking clients specialised areas solutions to corporate clients Leverage transaction experience in attracting Utilize the presence in regional markets to Corporate Finance: Leader in corporate new corporate finance mandates expand business advisory : series of successful transactions and Leverage regional expansion to introduce Leverage specialised product expertise in track record outside Oman new products other markets Financial Institutions: trade, DCM and Strong growth potential in the high net Focus on fee income correspondent banking services worth market segment Inorganic growth Brokerage: Leadership position on Muscat Securities. Strong client base Asset Management: Largest Omani mutual fund manager with potential for growth and expanding outside Oman. Investment solutions for high net worth individuals Securities portfolio Asset Growth Operating Income
Others (1) US$ million US$ million A1 to A3 5% 1%
4,631 4,198 171 172 3,785 3,773 3,869 160 3,327 137 95 111
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Aaa to Aa3 Total Assets Operating Income 94% 17 Source: BankMuscat Prospectus and Financial Statements. (1) Others include Baa1 to Baa3 securities and unrated Banks. Islamic Banking – Meethaq
Overview Opportunities Strategy
Experience in Islamic Banking through New business opportunity with unexplored Full fledged product and service offerings overseas operations market potential Customer Centric approach and transparency Leverage service excellence and infrastructure Large net worth size to leverage business Plan to have 7 branches in the first year and Assigned a capital of up to RO 150 million Potential to target existing customer base of expand thereafter over 1 million Dedicated branches with Meethaq branding Leverage on strong existing and recognized Established Sharia Board comprising of well Bank Muscat brand experienced and reputable Sharia scholars
Loan Portfolio Meethaq – Product and Portfolio Development
US$ million 2012 2013 2014 onwards
Home, auto finance, saving Consumer and current a/c, E- Fixed deposits, shares Health, tailored products banking, debit and Ujra card murabaha (education, marriage..) Murabaha (goods LC), vehicle Corporate and equipment Trade finance, Equipment Working capital finance, SME financing, sukuk underwriting finance, CD a/c products, Project finance 403 Investment & Basic interbank 260 Wakala bilistithmar products, murabaha Advisory, hedging products 167 Treasury I-REITS 5 74 Asset Capital Protected Funds Islamic Equity Index , Fixed Income Fund, Banca Takaful Management Equity Funds 2008 2009 2010 2011 2012 Products
18
14 International Operations
Overview Opportunities Strategy
Presence in GCC, India and Singapore Large banking markets in Saudi Arabia and Focus on existing GCC operations Kuwait . Branches in Kuwait and Saudi Arabia . Solidify position and increase profitability Pan GCC network offering opportunities for . Rep offices in UAE and Singapore business and trade synergies Drive synergies within the group . 97% stake in Muscat capital LLC – Saudi Increasing trade/business opportunities Scale up business volumes to attain desired based, CMA licensed entity between GCC and Asia return . 45.7% stake in Mangal Keshav Securities – Efficiency: rationalization of back-office Capture trade / business flows between GCC India based brokerage firm costs – sharing of operational costs and Asia
Assets Operating Profit
US$ millions US$ millions
30 1,929 22
1,042 939 13 12 14 774 644 3 408
(1) 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
Total Assets Operating Income 19 Source: BankMuscat audited financial Statements. (1) Excluding one off adjustment of US$157mn gain in relation to the sale of sale of the bank’s investment in HDFC Bank, India. International Operations cont’d
Country Entity Overview Strategy
Launched in 2007, focus on mid-market Enhance scale through continued focus on corporate and treasury businesses corporate and treasury business Bank Muscat Prudent credit growth with improvement in credit quality and monitoring Riyadh Branch Improving profitability with its first net Focus on bulk deposits from large corporate and HNI clientele profit of US$2mn as of 31st December 2012 Cost containment and increase shared resources with Headquarter KSA Scale up business volume and leverage Bank Muscat presence in other 97% owned subsidiary launched in markets 2009, focus on brokerage, asset / Muscat Capital Leverage institutional relationships in brokerage in Oman as well as focus on wealth management and corporate selected HNW customers in KSA finance advisory services Leverage expertise built in Oman in Corporate Finance/Advisory
Focus on Bahrain business to build scale and market share 49% owned entity, offering corporate, Bahrain BMI Bank retail and private bank services Strengthen existing presence in international markets Network of 10 branches and 25 ATMs Improve operational efficiency and leverage on investments in technology and infrastructure to scale up business volumes
45.7% ownership, India based Scale up business through organic and inorganic growth India Mangal Keshav brokerage firm with a network of 150 Build non banking financial corporations business by expanding the secured branches / franchises across India lending business (margin finance, gold loan, leasing etc)
Scale up business volumes with a focus on quality lending Short term, working capital lending and trade finance to corporate as well as Bank Muscat contract financing for Government, Oil and Gas sector Kuwait Launched in 2010, focus on corporate, Kuwait Branch trade and treasury businesses High net worth clients for liabilities Leverage off low operating cost base
20 Diverse Income & Asset Base
Net Profit By Business Group Deposits by Segment
Private Commercial Wholesale Sector 28% Corporate 34% 27% Individuals and others 35%
Intl 6%
Ministries and Retail other Gov. 44% organisations 38%
Assets by Group Loans & Advances by Segment
Import & Export Intl. Real estate trade 9% Wholesale Wholesale & 4% 5% 19% retail trade 4% Manufacture & Personal / Construction Housing Loans 8% 39% FI's and Others 7% Consumer 29% Mining and quarrying Corporate 9% 43% Services, Utilities 21 & Transport 24% V. Financial Performance Bank Muscat – Financial Highlights
Net Profit
Dec 2012: USD 361 million Dec 2011: USD 305 million Increase of 18.4% Customer Deposits & CD’s Net Interest Income
Dec 2012: 13,969 million Dec 2012: USD 598.4 million Dec 2011: 12,597 million Dec 2011: USD 550.9 million Growth 10.9% Growth:8.62%
Net Loans & Advances Impairment for Credit Losses Impairment Dec 2012: 14.55 million Dec 2012: USD 150 million Dec 2011: 12.52 million Dec 2011: USD 146 million Growth: 2.031 million or 16.2% Recoveries ROAA & ROAE Dec 2012: USD 87 million Dec 2011: USD 66 million
-Return on average assets Dec 2012: 1.84% Dec 2011: 1.80% Increase by 0.05%
-Return on average equity Dec 2012: 15.42% Dec 2011: 15.37% Increase by 0.05% *pre – dividend 23 Operating Performance and Profitability
Comments Operating Income & Cost to Income
Resilient operating performance throughout the financial US$ Millions turmoil . Solid top line income growth – 5 year CAGR of 13% 35.6% 41.6% 40.7% 38.8% 41.1% Increase in operating expenses 28.2% . Higher salaries – Oman government initiatives . Business expansion Strong core revenue generation with net interest income 841 756 764 and commission and fees contributing to over 90% of 615 690 total operating income 449 . Increasing focus on top line commission and fee income generation 2007 2008 2009 2010 2011 2012 Solid Profitability Operating Income Cost/ Income Operating Income Composition Profitability
US$ Millions US$ Millions 3% 3% 4% 8% 4% 4% 2% 5% 4% 3% 20% 2% 25.8% 22% 23% 20% 21% 22% 15.4% 17% 15.4% 14.8% 14.6% 10.9% 72% 71% 72% 71% 305 68% 60% 219 264 362 243 191
2.4% 1.8% 1.2% 1.7% 1.8% 1.8% 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Net Interest Income Net Commission & fees Other Income (1) FX Income Net Profit RoAE RoAA 24 Source: GCC Central Bank websites and BICRA Report (S&P); February 2013. OMR/ US$: 0.385. (1) Other income: Profit on sale of non-trading investments, Dividend income, and other income. Asset Quality
Comments Loan Growth
Stable loan book growth US$ Millions . Conservative lending approach . Focus on high quality assets with access to top tier 4.98% borrowers 4.19% 3.37% Strong project finance capabilities 2.80% 2.98% 2.99% Diversified loan portfolio across sectors Adequate provisioning of impaired asset 15,096 12,976 . Conservative approach – provisioning in line with the 10,009 10,525 10,894 higher of either IFRS or CBO requirements 7,261 . Non specific loan loss provisions of 2% on retail portfolio and 1% on corporate portfolio 2007 2008 2009 2010 2011 2012 Gross Loans NPL/ GLs Gross Loans – Sector Breakup Impaired Assets and Provisioning
Services US$ Millions 11% 116.6% 118.4% 121.4% Mining & 115.4% Personal and quarrying 101.5% 105.9% Housing loans 9% 39% Manufacture 5% Real estate 547 4% 555 457 548 451 484 458 Wholesale & 387 retail trade 282 326 4% Others 245 280 Import 3% FIs Construction trade Utilities 4% 3% Transport 5% 2007 2008 2009 2010 2011 2012 6% 7% LLR NPL LLR/NPL 25 Source: BankMuscat FY2012 Financial statements and Prospectus. OMR/ US$: 0.385. Funding and Liquidity
Comments Funding Mix
Stable funding structure with a diversified funding base US$ Millions Largest deposit base in Oman with significant granularity 10,955 15,658 15,198 15,197 18,774 20,555 . Retail deposits comprise c.30% of total deposits 7% 6% 5% 6% 5% 5% 15% 12% 12% 14% 12% 14% Top 10 depositors represent c.13% of total deposits and 17% 16% 13% comprise of top tier Omani corporate entities 22% 28% 28% Adequate liquidity 67% 68% Strong capitalization levels 55% 54% 55% 63% . Highest CAR among Omani peers and one of strongest among GCC peers 2007 2008 2009 2010 2011 2012 Deposits Borrowings Equity Others Liquid Assets Capital
US$ Millions 15.93% 16.32% 27.7% 28.1% 15.14% 12.63% 14.72% 14.78% 25.5% 24.4% 22.3% 3.68% 21.1% 2.56% 4.63% 3.58% 2.93% 2.27% 60 174 367 727 78 2,257 2,638 12.58% 12.64% 2,799 1,429 1,886 11.14% 11.85% 11.30% 1,527 10.36%
1,579 1,886 2,145 1,267 1,176 1,723
2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Cash & equivalent Placements with banks Treasury bills Liquid Assets Tier 1 Ratio Tier 2 Ratio 26 Source: BankMuscat FY2012 Financial statements and Prospectus. OMR/ US$: 0.385. Thank You Balance Sheet
Amounts in US$ million 31-Dec-12 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08 Cash and bank (incl. placements) 3,609 4,403 3,315 4,218 3,975 Loans and Advances 14,548 12,518 10,410 9,969 9,682 Non trading investments 1,572 891 694 375 983 Tangible fixed assets 180 186 194 68 57 Other assets (incl. invt in associates) 646 777 584 566 960 Total assets 20,555 18,774 15,198 15,197 15,658
Bank deposits/FRNs 1,950 1,914 2,014 3,665 3,959 Customer deposits (incl. Bonds and CDs) 14,110 12,741 9,705 8,474 8,544 Other liabilities 1,034 989 934 720 1,003 Subordinated debt 675 869 477 490 295 Total liabilities 17,769 16,513 13,129 13,349 13,801
Share capital and premium 1,538 1,185 1,133 1,063 1,063 Convertible bonds 42 84 84 84 – Total reserves 722 591 493 373 313 Cumulative changes in fair value 21 3 24 13 180 Retained profits 464 397 335 315 301 Shareholders' equity 2,786 2,261 2,069 1,848 1,856 Total liabilities + shareholders' equity 20,555 18,774 15,198 15,197 15,658
Key ratios Loans and advances/customer deposits 103.1% 98.2% 107.3% 117.6% 113.3% Shareholders' equity/total assets 13.6% 12.0% 13.6% 12.2% 11.9% Subordinated debt/(debt + equity) 19.5% 27.8% 18.7% 20.9% 13.7% BIS total capital ratio 15.10% 15.93% 14.78% 15.20% 13.02%
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26 Profit and Loss
Amounts in US$ million 31-Dec-12 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08 Net interest income 598.5 551.0 486.2 452.9 421.1 Other operating income 242.2 213.3 203.4 303.1 194.0 Operating income 840.7 764.3 689.6 756.0 615.1 Operating costs (349.6) (314.0) (267.3) (213.3) (218.8) 491.0 450.3 422.3 542.6 396.3 Recoveries from impairments 87.0 67.3 44.6 28.6 34.3 Credit loss impairments (150.4) (145.9) (121.0) (255.2) (64.0) Other impairments (11.6) (8.8) (7.2) (60.4) (76.6) Gain/(loss) from associates (8.9) (9.2) (32.8) (27.2) (8.4) Profit on sale of a branch – – – – – Share of trading loss in an associate – – – – – Profit before Tax 407.2 353.8 306.0 228.5 281.6 Taxation (45.6) (48.5) (42.1) (37.0) (38.1) Net Profit 361.6 305.3 263.9 191.5 243.5
Key ratios Cost/income ratio 41.6% 41.1% 38.8% 28.2% 35.6% Return on average assets 1.84% 1.80% 1.74% 1.24% 1.83% Return on average equity 15.42% 15.37% 14.64% 10.90% 14.80% Basic EPS (US$) 0.187 0.197 0.171 0.178 0.226 Share price (US$) 1.460 1.990 2.514 2.140 2.070
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27 Thank You
“WECAN DO MORE.”
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