Oman's Bank Muscat hit by $39m prepaid card fraud

Bank Muscat, Oman's largest lender, will take an impairment charge of up to OMR15m (US$39m) after a small number of prepaid travel cards were hit by fraud, the bank said on Tuesday.

The bank said its board met on Monday after 12 prepaid travel cards were compromised outside of Oman. The cards allow users to carry currencies abroad rather than using their debit or credit cards in foreign countries, which can be expensive.

No other customers have been affected by the fraud.

"We are exploring all avenues to minimise the impact on our shareholders and will pursue the various options available to the bank," Bank Muscat said, adding it would update the market when more information was available.

Shares in Bank Muscat recovered somewhat on Tuesday, trading up 2.1 percent at 0625 GMT, having slumped 4.3 percent on Monday, the largest one-day fall in the stock since July 2011.

The impairment, which was a result of unspecified electronic fraud, represented 10.5 percent of Bank Muscat's estimated 2013 earnings, United Securities said in a note.

However, even taking the impairment into account, the stock was "still underpriced as compared to its domestic and regional peers", trading at around 1.1-times book value, the note added.

Bank Muscat posted a 18.5 percent increase in 2012 net profit last month, fuelled by a 16.2 percent growth in lending.

The bank expects lending growth to be around 14-15 percent this year, driven by high government spending and higher wages for local citizens, its chief operating officer was quoted by local media as saying earlier this month.

Related:
Companies

Market Performance

BankMuscat
0.526
-0.0020 -0.38 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Saudis cut wage, benefit bill in delicate pursuit of austerity

Saudis cut wage, benefit bill in delicate pursuit of austerity

Some Saudis appear prepared to accept austerity following the...

Who audits the auditors?

Who audits the auditors?

DIFC Courts is hearing a case against the Middle East branch...

Saudis tighten their belts for Eid in age of austerity

Saudis tighten their belts for Eid in age of austerity

Gov't cuts, which began late in 2015, are now rippling through...

Most Popular
Most Discussed
sponsoredTracking