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 RESULTS FOR THE THREE MONTHS ENDED 31 MARCH 2016

 

HSBC Bank Oman S.A.O.G. (‘HBON’) announces that at the Board of Directors’ (the ‘Board’) meeting held on Wednesday, 27 April 2016, the Board approved HBON’s unaudited financial results for the three months ended 31 March 2016.

 

  • Net profit decreased by 7.9% to RO3.5m (compared to RO3.8m for the same period in 2015) due to prior year one-off gains on the disposal of HBON’s operations in India and the sale of other legacy investments not being repeated in 2016.

  • Net operating income, before loan impairment charges, marginally decreased by 0.5% to RO18.5m (compared to RO18.6m for the same period in 2015) due to the above reasons.

  • Net interest income increased by 7.4% to RO13.0m (compared to RO12.1m for the same period in 2015) due to higher interest income from government securities and corporate customers, lower interest expenses partially offset by a lower interest from retail customers due to the run-off of high yield retail loans.

  • Net fee income decreased by 9.1% to RO3.0m (compared to RO3.3m for the same period in 2015) due to lower commitment and facility fees from corporate customers.

  • Net trading income increased by 43.8% to RO2.3m (compared to RO1.6m for the same period in 2015) due to higher foreign exchange volumes and improved margins.

  • Other operating income fell to RO0.02m (compared to RO1.5m for the same period in 2015) due to the gain on the disposal of HBON’s India operations of RO0.8m and other legacy investments of RO0.7m being booked in 2015.

  • A net charge of RO2.3m has been reported for loan impairment charges (compared to a net charge of RO0.8m for the same period in 2015) arising from retail-specific provisions of RO1.1m and the corporate general provision of RO1.8m attributed to the growth in corporate loans and advances. These were partly offset by a net recovery of RO0.8m from corporate customers.

  • Operating expenses fell 8.3% to RO12.2m (compared to RO13.3m for the same period in 2015) due to tight cost control.

  • Loans and advances, net of provisions and reserved interest, grew by 13.0% to RO1,385.7m (compared to RO1,226.0m as at 31 March 2015) on the back of increase in corporate loans and advances. Customer deposits decreased by 8.4% to RO1,782.1m (compared to RO1,945.4m as at 31 March 2015) partly due to end of period payment of declared dividends by our corporate customers. The net loans to deposits ratio improved to 77.8% (compared to 63.0% as at 31 March 2015).

  • HBON’s capital adequacy ratio stood at 18.2% as at 31 March 2016 (compared to 17.8% as at 31 March 2015), representing a continuing strong capital base for future growth.