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Mon 25 Jan 2010 09:01 PM

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Bank Muscat plunges to Q4 loss on impairments

Omani bank cut stake in Pakistan's Silkbank to 8.5% with a writedown of $52.7m.

Writedowns on a stake in a Pakistan bank and higher loan impairments plunged Bank Muscatinto a fourth quarter net loss of $17.4 million on Monday.

The loss at Oman's largest bank by market value compared with a profit of $9.4 million a year earlier, according to Reuters calculations, and fell short of expectations.

Shares in the bank, which analysts forecast would have a net profit of $6.9 million, ended up 0.5 percent, roughly in line with the Muscat index.

Bank Muscat said in November it would have to write down the value of its investment in Pakistan's Silkbank.

The Omani bank held a 35 percent stake in Silkbank but decided not to take part in its rights issue, leading to a writedown of $52.7 million and cutting its stake to 8.5 percent.

The bank reported a full year net profit of $191.4 million, down 21 percent from $243.3 million in 2008.

Its results were also hit by impairment charge on loan losses of $255 million for the entire year, a more than fourfold increase compared with the previous year.

For 2010, the bank said "the anticipated increase of oil prices and favourable financial, economic and monetary policies augur well for the national economy which is expected to record a growth rate of 6.1 percent at constant prices and 18.4 percent at current prices in 2010." (Reuters)

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