HSBC's Oman unit see sharp drop in 2012 profit

Lender posts 62.7 percent slump in profit to US$15.1m over 12-month period
By Reuters
Wed 30 Jan 2013 03:10 PM

HSBC Bank Oman, formed last year by a merger of HSBC's Oman unit and Oman International Bank, posted a 62.7 percent slump in 2012 net profit, the bank said in a statement on Wednesday, hurt by integration costs and bad loans.

The lender, Oman's second-largest by market capitalisation, made a net profit of OMR5.8m (US$15.1m) in 2012, compared with 15.5 million rials in 2011, the bourse filing from the bank said.

In the fourth quarter, HSBC Bank Oman made a net loss of OMR4.77m, according on Reuters calculations based on the company's nine-month net profit of OMR10.57m.

Non performing loans as a percentage of total loans jumped to 7.1 percent at the end of 2012, compared with 1.2 percent at the end of the previous year, the statement said.

Operating expenses rose to OMR48.7m, which included OMR13.9m of integration costs, the bank said without detailing how much the increase was.

The formal completion of the merger was announced at the beginning of June, with HSBC holding 51 percent of the new entity. Previously, OIB was Oman's fifth-largest bank, with the second-largest branch network in the country and gross assets of US$3.2bn.

The board of directors proposed a cash dividend of OMR0.001 per share, the statement added.

In October, one of Oman's richest businessmen increased his shareholding in the bank to 25 percent from 18.39 percent.

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