MSX-listed finance firms post strong performance

Business Sunday 20/August/2023 09:00 AM
By: ONA/ Times News Service
MSX-listed finance firms post strong performance

Muscat: Finance companies listed on the Muscat Stock Exchange (MSX) recorded strong performance in the first half of this year with their net profits rising by 8.7 percent to OMR 9.9 million, compared to about OMR9.1 million in the same period last year.

In their financial reports for the first half of this year, these companies praised the government’s efforts to control spending, reduce public debt, and hlep in raising the credit rating of the Sultanate of Oman, which is expected to reflect positively on the finance sector and other sectors of the economy.

The finance and leasing companies operate in a range of activities related to working capital, financing the purchase and leasing of vehicles, debts, temporary loans, and financing of construction projects. Their services contribute to enhancing the performance of major companies.

The finance and leasing companies have witnessed strong growth in recent years, benefiting from the increase in government spending and the increase in demand for credit for real estate in order to build housing units.

They also grant working capital facilities to encourage companies to increase financing of small and medium enterprises (SMEs) and other sectors.

They also accept deposits from institutions and grant personal loans to individuals according to specific controls, and this decision is expected to contribute to the growth of companies’ activities operating in the sector and increas their contribution to the national economy.

Earlier in June 2023, the scope of lending by Finance and Leasing Companies (FLCs) in Oman were expanded by the Central Bank of Oman (CBO).

They can now carry out additional business activities and these include real estate financing, working capital facilities, personal loans and lending against their own deposits.

The CBO further said that expansion of additional activities include relaxing certain conditions for their existing activities.

The CBO in its circular further said that the relaxations were extended to FLCs on conditions to accept corporate deposits, investments including discretion to change their business hours as per need of the market.

Muscat Finance Company said that the new decision for the finance and leasing companies is expected to expand the business opportunities available to the company, stressing that it has a positive future outlook in terms of business. >A2

The National Finance Company recorded the highest profits at OMR 5.4 million, followed by Omani Finance Services with net profits of OMR1.565 million, Taajeer Finance with profits of OMR1.562 million, and United Finance with a profit of OMR 809,000. Muscat Finance reported a net profits of OMR590,000.

The assets of the five companies increased at the end of last June to OMR1.123 billion in the first of this year compared to OMR1.012 billion in June of last year, recording a growth of 10.9 percent.

The current year witnessed four companies increase their capital by distributing bonus shares to their shareholders, which prompted the sector’s capital to rise at the end of last June to OMR180.8 million, compared to OMR175.9 million in June last year.

Despite the improvement in financial results in the first half of this year, companies see that there are a number of challenges facing the sector, and the United Finance Company said that the second quarter of this year witnessed a set of enormous challenges facing companies worldwide, especially in the financial sector.

While the National Finance Company saw that there is a gradual recovery of the economy from the effects of the Corona pandemic, indicating that it is monitoring the negative impact associated with fear of global recession and high oil prices.

Taajeer Finance said that despite the challenges in the financing sector, the business environment reflects a positive outlook, and the improvement in the credit rating of the Sultanate of Oman reflects the positive global outlook towards the Omani economy.