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 RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016

HSBC Bank Oman S.A.O.G. (‘HBON’) announces that at the Board of Directors’ (the ‘Board’) meeting held on Sunday, 30 October 2016, the Board approved HBON’s unaudited financial results for the nine months ended 30 September 2016.

  • Net profit increased by 66.7% to RO13.5m (compared to RO8.1m for the same period in 2015) due to higher operating income and lower operating expenses partly offset by higher loan impairment charges.

  • Net operating income, before loan impairment charges, increased by 4.6% to RO56.3m compared to RO53.8m for the same period last year during which we had some significant one-off transactions including the sale of our branches in India. 

  • Net interest income increased by 10.7% to RO40.5m (compared to RO36.6m for the same period in 2015). This underlying strength was due to higher interest income from corporate lending coupled with rising yields from the investment of surplus liquidity in government securities,  partially offset by lower interest income received from retail customers due to the run-off of older high yield retail loans.

  • Net fee income decreased by 7.2% to RO9.0m (compared to RO9.7m for the same period in 2015) due to lower wealth management, cards and custody fees, the latter on a comparatively weaker performance of the MSM

  • Net trading income increased by 9.1% to RO6.0m (compared to RO5.5m for the same period in 2015) partly due  the non-repeat of a one-off RO0.2m foreign exchange loss incurred in 2015.

  • Other operating income fell to RO0.5m (compared to RO1.7m 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 RO4.8m has been reported for loan impairment charges (compared to a net charge of RO2.9m for the same period in 2015) arising from retail-specific provisions of RO3.9m 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 RO1.3m from corporate customers.

  • Operating expenses fell 13.1% to RO35.8m (compared to RO41.2m for the same period in 2015) due to tight cost control.

  • Loans and advances, net of provisions and reserved interest, grew by 8.2% to RO1,395.1m (compared to RO1,288.8m as at 30 September 2015). Customer deposits slightly increased by 0.4% to RO1,888.6m (compared to RO1,881.2m as at 30 September 2015). The net loans to deposits ratio  grew to 73.9% (compared to 68.5% as at 30 September 2015).

  • HBON’s capital adequacy ratio stood at 17.9% as at 30 September 2016 (compared to 18.1% as at 30 September 2015), representing a continuing strong capital base for future growth.