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 DRAFT AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

HSBC Bank Oman S.A.O.G. (‘HBON’) announces that at the Board of Directors’ (the ‘Board’) meeting held on Monday, 26 January 2015, the Board approved HBON’s draft audited annual financial results for the year ended 31 December 2014.

  • Net profit was up by 11.9% to RO12.2m (compared to RO10.9m for the year ended 31 December 2013) due to an increase in net operating income before loan impairment charges, a reduction in operating expenses and the release of prior year’s tax provisions.
  • Net operating income before loan impairment charges increased by 3.3% to RO71.0m (compared to RO68.7m for the year ended 31 December 2013) due to higher net interest income, net fee income and dividend income.
  • Net interest income increased by 1.7% to RO48.9m (compared to RO48.1m for the year ended 31 December 2013) due to an increase in corporate loans and advances and a reduction in high cost corporate deposits.
  • Net fee income increased by 9.6% to RO12.6m (compared to RO11.5m for year ended 31 December 2013) due to higher structuring and facility fees from corporate customers.
  • A net charge of RO2.9m has been reported for loan impairment charges mainly from both a general provision charge of RO1.5m on the back of an increase in corporate loans and advances and also due to a specific provision charge – net of recoveries – of RO1.3m for both retail and corporate customers (compared to a net recovery in 2013 of RO2.2m mainly from the release of the general provision of RO2.3m following the planned reduction in corporate loans and advances).
  • Operating expenses reduced by 4.3% to RO55.3m (compared to RO57.8m for the year ended 31 December 2013) due to stricter cost management and non-recurrence of operational losses and one-off expenses in 2013.
  • Loans and advances, net of provisions and reserved interest, increased by 18.4% to RO1,161.3m due to an increase in corporate loans and advances (compared to RO980.5m as at 31 December 2013). Customer deposits increased by 3.3% to RO1,852.3m (compared to RO1,792.7m as at 31 December 2013).
  • HBON’s capital adequacy ratio stood at 18.2% as at 31 December 2014 (compared to 20.2% as at 31 December 2013), representing a continuing strong capital base for future growth.
  • Earnings per share were RO0.006 (compared to RO0.005 for the year ended 31 December 2013).
  • The Board of Directors proposes a cash dividend of RO0.0055 per share (nominal value per share of RO0.100) amounting to RO11.0m for the full year 2014.

The draft audited annual financial results and proposed cash dividends for the year ended 31 December 2014 are subject to the approval of the Central Bank of Oman and the shareholders of the bank.