BANK MUSCAT SAOG CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2020 BANK MUSCAT SAOG CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Contents Page Independent auditor’s report 2 – 6 Consolidated statement of financial position 7 Consolidated statement of comprehensive income 8 Consolidated statement of changes in equity 9 – 10 Consolidated statement of cash flows 11 Notes to the consolidated financial statements 12 -127 8 BANK MUSCAT SAOG CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2020 2019 2020 2020 2019 US$ 000's US$ 000's Notes RO 000's RO 000's 1,174,072 1,137,070 Interest income 28 437,772 452,017 (418,538) (372,821) Interest expense 29 (143,536) (161,137) 755,534 764,249 Net interest income 294,236 290,880 171,639 177,306 Income from Islamic financing/investments 28 68,263 66,081 (103,868) (104,855) Distribution to depositors 29 (40,369) (39,989) 67,771 72,451 Net income from Islamic financing 27,894 26,092 Net interest income and income from 823,305 836,700 Islamic financing 322,130 316,972 265,673 234,590 Commission and fee income (net) 30 90,317 102,284 137,441 114,525 Other operating income 31 44,092 52,915 1,226,419 1,185,815 OPERATING INCOME 456,539 472,171 OPERATING EXPENSES (455,225) (414,552) Other operating expenses 32 (159,602) (175,262) (53,686) (52,597) Depreciation 11 (20,250) (20,669) (508,911) (467,149) (179,852) (195,931) (145,784) (210,488) Net impairment losses on financial assets 41 (81,038) (56,127) (654,695) (677,637) (260,890) (252,058) 571,724 508,178 PROFIT BEFORE TAXATION 195,649 220,113 (89,774) (83,873) Tax expense 19 (32,291) (34,563) 481,950 424,305 PROFIT FOR THE YEAR 163,358 185,550 OTHER COMPREHENSIVE (EXPENSE)/ INCOME Net other comprehensive income (expense) to be reclassified to profit or loss in subsequent periods, net of tax: (592) (288) Translation of net investments in foreign operations (111) (228) 12,154 3,161 Change in fair value of FVOCI Debt investments 19 1,217 4,679 (1,223) (275) Change in fair value of cash flow hedge 19 (106) (471) 10,339 2,598 1,000 3,980 Net other comprehensive (expense) not to be reclassified to profit or loss in subsequent periods, net of tax: (8,990) (20,418) Change in fair value of FVOCI Equity investments 19 (7,861) (3,461) (2,249) - Tax impact on revaluation reserve 11 - (866) (11,239) (20,418) (7,861) (4,327) OTHER COMPREHENSIVE EXPENSE FOR THE (900) (17,820) YEAR (6,861) (347) TOTAL COMPREHENSIVE INCOME FOR THE 481,050 406,485 YEAR 156,497 185,203 Total comprehensive income attributable to: 481,050 406,485 Equity holders of Parent Company 156,497 185,203 Profit attributable to: 481,950 424,305 Equity holders of Parent Company 163,358 185,550 Earnings per share: US$ 0.14 US$ 0.12 Basic and diluted 34 RO 0.048 RO 0.055 The attached notes 1 to 44 form part of these consolidated financial statements. 9 BANK MUSCAT SAOG CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2020 Attributable to equity holders of parent Foreign Impairment Subordin Cash flow Cumulative currency reserve / Perpetual Share Share General Legal Revaluation ated loan hedge changes in translation restructured Retained Tier I 2020 Notes capital premium reserve reserve reserve reserve reserve fair value reserve loan reserve profit Total capital Total RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's Balance at 1 January 2020 309,478 531,535 384,078 103,160 4,904 13,090 (34) (372) (2,296) 2,606 526,487 1,872,636 130,000 2,002,636 Profit for the year - - - - - - - - - - 163,358 163,358 - 163,358 Other comprenhensive expense - - - - - - (106) (6,644) (111) - - (6,861) - (6,861) Total comprehensive income (expense) (106) (6,644) (111) - 163,358 156,497 - 156,497 Transfer within equity upon disposal of FVOCI equity investments 19 - - - - - - - 3,333 - - (3,333) - - - Dividends paid 25 (108,317) (108,317) - (108,317) Issue of bonus shares 25 15,474 - - - - - - - - - (15,474) - - - Transfer to legal reserve 23 - - - 5,158 - - - - - - (5,158) - - - Transfer from subordinated loan reserve 23 - - 13,090 - - (13,090) - - - - - - - - Transfer to subordinated loan reserve 23 - 13,090 - - - - (13,090) - - - Transfer from restructured loan reserve to retained earnings - - - - - - - - - (250) 250 - - - Interest on Perpetual Tier I capital 24 - - - - - - - - - - (7,168) (7,168) - (7,168) Balance at 31 December 2020 324,952 531,535 397,168 108,318 4,904 13,090 (140) (3,683) (2,407) 2,356 537,555 1,913,648 130,000 2,043,648 Balance at 31 December 2020 (US$ 000’s) 844,031 1,380,610 1,031,605 281,345 12,738 34,000 (364) (9,566) (6,252) 6,119 1,396,247 4,970,513 337,662 5,308,175 The attached notes 1 to 44 form part of these consolidated financial statements. 10 BANK MUSCAT SAOG CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued) For the year ended 31 December 2020 Attributable to equity holders of parent Cash Foreign Impairment Subordina flow Cumulative currency reserve / Perpetual Share Share General Legal Revaluation ted loan hedge changes in translation restructured Retained Tier I 2019 Notes capital premium reserve reserve reserve reserve reserve fair value reserve loan reserve profit Total capital Total RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's RO 000's Balance at 1 January 2019 294,741 531,535 370,988 98,247 5,770 13,090 437 (5,023) (2,068) 4,623 485,402 1,797,742 130,000 1,927,742 Profit for the year - - - - - - - - - - 185,550 185,550 - 185,550 Other comprenhensive (expense) income - - - - (866) - (471) 1,218 (228) - - (347) - (347) Total comprehensive income - - - - (866) - (471) 1,218 (228) - 185,550 185,203 - 185,203 Transfer within equity upon disposal of FVOCI equity investments 19 - - - - - - - 3,433 - - (3,433) - - - Dividends paid 25 - - - - - - - - - - (103,159) (103,159) - (103,159) Issue of bonus shares 14,737 - - - - - - - - - (14,737) - - - Transfer to legal reserve 23 - - - 4,913 - - - - - - (4,913) - - - Transfer from subordinated loan reserve 23 - - 13,090 - - (13,090) - - - - - - - - Transfer to subordinated loan reserve 23 - - - - - 13,090 - - - - (13,090) - - - Transfer from restructured loan reserve to retained earnings - - - - - - - - - (2,017) 2,017 - - - Interest on Perpetual Tier I capital 24 - - - - - - - - - - (7,150) (7,150) - (7,150) Balance at 31 December 2019 309,478 531,535 384,078 103,160 4,904 13,090 (34) (372) (2,296) 2,606 526,487 1,872,636 130,000 2,002,636 Balance at 31 December 2019 (US$ 000’s) 803,839 1,380,610 997,605 267,948 12,738 34,000 (88) (966) (5,964) 6,769 1,367,499 4,863,990 337,662 5,201,652 The attached notes 1 to 44 form part of these consolidated financial statements. BANK MUSCAT SAOG 11 CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2020 2019 2020 Note 2020 2019 US$ 000's US$ 000's RO 000's RO 000's CASH FLOWS FROM OPERATING ACTIVITIES 571,724 508,178 Profit for the year before taxation 195,649 220,113 Adjustments for : 53,686 52,597 Depreciation 11 20,250 20,669 145,784 210,488 Net impairment on financial assets 41 81,038 56,127 (Profit)/Loss on sale of property and 65 (23) equipment 11 (9) 25 (7,675) (34) Profit on sale of investments 31 (13) (2,955) (17,088) (15,979) Dividends income 31 (6,152) (6,579) Operating profit before working 746,496 755,227 capital changes 290,763 287,400 (123,940) (151,033) Due from banks (58,148) (47,717) 234,208 (150,823) Loans and advances (58,067) 90,170 (155,605) (183,473) Islamic financing receivables (70,637) (59,908) (30,887) (366,413) Other assets (141,069) (11,891) (26,906) 644,470 Deposits from banks 248,121 (10,359) (1,280,398) 916,522 Customers' deposits 352,861 (492,953) 192,036 (50,008) Islamic customer deposits (19,253) 73,934 104,324 64,904 Other liabilities 24,988 40,165 (340,672) 1,479,373 Cash from / (used in) operations 569,559 (131,159) (80,327) (82,514) Income taxes paid (31,768) (30,926) Net cash from/(used in) operating (420,999) 1,396,859 activities 537,791 (162,085) CASH FLOWS FROM INVESTING ACTIVITIES 17,088 15,979 Dividend income 6,152 6,579 (618,588) (526,396) Purchase of investments (202,663) (238,156) 91,612 40,670 Proceeds from sale of investments 15,658 35,271 (22,044) (22,023) Purchase of property and equipment 11 (8,479) (8,487) Proceeds from sale of property and 57 23 equipment 11 9 22 (531,875) (491,747) Net cash used in investing activities (189,323) (204,771) CASH FLOWS FROM FINANCING ACTIVITIES (267,945) (281,343) Dividends paid (108,317) (103,159) (18,571) (18,618) Interest on perpetual Tier I capital (7,168) (7,150) 118,434 - Sukuk - 45,597 (34,000) (34,000) Subordinated loan repaid (13,090) (13,090) (202,082) (333,961) Net cash used in financing activities (128,575) (77,802) NET CHANGE IN CASH AND (1,154,956) 571,151 CASH EQUIVALENTS 219,893 (444,658) 3,706,086 2,551,130 Cash and cash equivalents at 1 January 982,185 1,426,843 CASH AND CASH EQUIVALENTS 2,551,130 3,122,281 AT 31 DECEMBER 33 1,202,078 982,185 The attached notes 1 to 44 form part of these consolidated financial statements.