Muscat: In its pursuit of its vision to become a world-leading Omani services company that helps customers, communities and people to prosper and grow, Sohar International has displayed robust performance in 2019.
The bank increased net profit by 17.2 per cent to achieve a record net profit for the year of OMR34.406 million compared to OMR29.366 million last year. The Board of Directors have recommended a cash dividend of 6 per cent for the year, which corresponds to 6 baisas per share.
Commenting on the financial results, Mohammed Mahfoudh Al Ardhi, Chairman of the Board of Directors of Sohar International, stated, “Sohar International’s results have enabled it to become the fastest-growing local bank while it pursues to fulfil the clearly defined vision. This is a reflection of the resilience the Omani banking sector has, as it maintains a steady growth in 2019 despite economic headwinds. With the ongoing commitment of the government to continue concentrating on infrastructure projects along with investments in the key sectors identified in the economic diversification plan, we expect to see continued demand for financing shortly despite current levels oil prices. Sohar International is well-positioned to further build on its market excellence, capitalise on upcoming opportunities, play a positive role in enhancing the national economy and continue to create sustainable value for its stakeholders.”
The bank’s net interest income for the year increased by 23.9 per cent to OMR70.191 million (2018: OMR56.651 million). Operating income increased by 10.8 per cent to OMR104.659 million, (2018: OMR94.438 million). Operating expenses increased by 13.5 per cent to OMR45.286 million (2018: OMR39.885 million), reflecting our continued investment in people and core infrastructure. Operating profit increased by 8.8 per cent to OMR59.373 million (2018:OMR 54.553 million).
Sohar International’s total assets increased for the year by 15.1 per cent to OMR3.505 billion (2018: OMR3.046 billion). Net loans and advances increased by 9.0 per cent to OMR2,454 million (2018: OMR2,252 million). Customer deposits increased by 15.3 per cent to OMR2,097 million (2018: OMR1,818 million). As at end of October 2019, the bank’s market share of private sector credit increased to 11.38 per cent from 10.48 per cent in December 2018 and its share of private sector deposits increased from 7.93 per cent to 8.60 per cent over the same period.
The ratio of non-performing loans and advances to gross loans and advances increased from 3.29 per cent in December 2018 to 4.82 per cent in December 2019 reflecting the deterioration in asset quality of certain corporate customers. The bank continues to focus on the pro-active management of credit exposures in line with its credit risk management policies.
Commenting on the results, Ahmed Al Musalmi, Chief Executive Officer of Sohar International remarked, “2019 has been a momentous year for Sohar International as we continued to stride upon our well-defined 5-year strategy while achieving several milestones on the way. With a clear purpose to help people win in all aspects of life, we had set in place key initiatives in the year 2019 that have been accomplished. From investing in our digital and physical infrastructure to investing in our people, we are gearing up Sohar International and furthering our capabilities to align ourselves alongside Oman’s vision 2040.”
“On the financial front, we continue to ensure that Sohar International performs on optimal levels by continuing to enhance operational efficiency and effectiveness through people and technology, as well as through a thorough approach to our core business ensuring that the engine is always running smoothly and effortlessly. The year 2019 results are a testament to the strategy that we have set forth and a result of the trust and support we have received from all our stakeholders.”
The year 2019 witnessed Sohar International strengthen its capital base with an over-subscription of OMR100 million Perpetual Bonds and additional subscription of Rights Issue of another OMR 40 million.