Debt collection fires Bank of Oman's earnings

National Bank of Oman (NBO) posted its biggest profit ever in the fourth quarter after recovering more funds from borrowers that had defaulted, and lending more as the country's $35.7 billion economy expanded.

Net income at Oman's second-largest lender by market value grew 58% to 15.69 million rials ($40.76 million) in the three months to December 31, beating analysts' forecasts, newswire Reuters calculated, based on full-year data the bank released.

"Economic growth, both in Oman and in the wider Gulf Arab region... have driven positive performance from all of our core businesses," chairman Suhail Bahwan said in a statement.

NBO is an affiliate of Commercial Bank of Qatar, Qatar's second-largest lender.

Recovery of bad debt rose 71% to 12 million rials in the fourth quarter, compared with 7 million rials in the year-earlier period, said a bank official, who did not want to be identified.

Chief executive Andrew Duff could not immediately be reached for comment. Shares of NBO, which were flat this year to Thursday's closed, jumped 4.4% on Sunday, before the results were announced.

Net loans and advances rose 29% to 907 million rials in the year to December 31, the bank said. Non-performing loans as a percentage of total fell to 6.2%, the bank said, without giving a comparison. Net income rose 46.6% to 44.6 million rials.

Oman's economy probably grew 5.6% last year, and may grow another 5.7% this year, according to a Reuters poll of economists.

Analysts' forecasts for NBO's fourth-quarter profit ranged from 10 million rials to 12.59 million rials, in a Reuters survey last month, with the average of five analysts at 11.22 million rials.

The bank, which made 9.93 million rials in the fourth quarter of 2006 and 28.91 million rials in the first nine months of 2006, proposed a cash dividend and bonus share of 17.5% each, it said. (Reuters)

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