Oman's fourth-largest lender recommends first dividend payment since its merger in 2012
HSBC Bank Oman, Oman's fourth-largest lender by assets, has recommended its first dividend payment to shareholders since its merger, after posting a narrowing loss in the fourth quarter.
The lender, created in June 2012 by the merger of HSBC's Omani assets and Oman International Bank, will pay a cash dividend of 0.0038 rials per share for 2013, a statement to the Muscat stock exchange said on Wednesday.
The lender made a net loss of OR1.8 million ($4.67 million) in the three months to December 31, compared to a net loss of OR4.77 million in the corresponding period of 2012, according to Reuters calculations.
The earnings missed the estimate from Gulf Baader Capital Markets, who expected a net profit for the period of OR3.85 million.
Reuters calculated the net profit figure based on the bank's previous financial results. It posted a full-year net profit of OR10.9 million, compared to OR5.8 million in the previous year, the bourse filing said.
The bank's annual performance was aided by a net recovery in impairment charges of OR2.2 million, which it attributed to recoveries from corporate clients and cash released from its general provisions which it no longer needed to put aside because of lower overall lending in 2013.
Loans and advances dropped 17.9 percent in 2013 to OR980.5 million. Deposits also fell 3.2 percent over the same timeframe, the statement added.
HSBC Bank Oman had been dragged down in its 2012 full-year and fourth-quarter numbers by high integration costs and increased provisioning following the merger.
Fitch Ratings said in an October 21 note that profitability in 2013 would be weak at HSBC Oman, lagging peers, due to one-off integration costs and higher loan impairment charges before rebounding in 2014.