MUSCAT: Bank Sohar has posted a 10.35 per cent decline in net profit for the nine-month period ended September 30, 2015.
Net profit fell to RO21.29mn for the first nine months of this year from RO23.75mn in the same period of last year, according to the bank’s filing with the Muscat Securities Market.
Bank Sohar’s Islamic banking window reported a net profit of RO396,000 for the January– September period of 2015 against a net loss of RO238,000 in the same period last year.
The bank reported a 1.54 per cent drop in operating income, which came in at RO52.44mn against RO53.26mn in the year-ago period. Operating expenses fell 8.38 per cent to RO24.79mn from RO22.87mn.
The loan book grew by 17.69 per cent as net loans and advances rose to RO1.67bn from RO1.42bn. Deposits from customers increased 16.7 per cent to RO1.56bn.
Gulf Baader Capital Markets (GBCM) said third quarter net profit stood at RO7.42mn as against its estimates of RO7mn, reporting a decline of 2.3 per cent year-on-year on higher base and also backed by in-line operating performance and lower than estimated cost of risk.
Terming Bank Sohar results as overall “a reasonable set of numbers” a GBCM client note said, “With the current numbers, we could interpret the local banks (from NBO and Bank Sohar) are still able to report higher credit offtake, while the deposit increase seems to be meagre and this points out to prevailing low system liquidity. On the positive side, we have seen reduced cost of risk, need to watch this closely in the coming quarters.”
“We have a ‘buy’ rating on Bank Sohar with the fair value of 210bz,” GBCM added.
Bank Sohar shares lost 0.56 per cent to close Monday’s session on the MSM at 177bz.
EFG-Hermes, in its note, said Bank Sohar’s third quarter net income was five per cent below its estimates of RO7.9mn.
It said, “Revenues were broadly flat in the third quarter on a sequential basis. But we were surprised by the jump in operating costs. However, this was largely cushioned by a fall in provisioning costs, which we estimate to have declined by 42 per cent on a sequential basis.
Loan growth momentum continued to remain strong. The continuation of strong growth momentum is supported by the bank’s capital raising, through a rights issue in the second quarter of 2015.”
Bank Sohar’s total assets grew by 20 per cent to RO2.22bn.
