.
.
.
.

Oman’s Bank Muscat misses profit forecast on fraud provision

Published: Updated:

Bank Muscat, Oman's largest lender, posted a 25.1 percent drop in first-quarter net profit, missing analysts' forecasts, as it booked a provision after some of its prepaid travel cards were hit by fraud.

The lender made a quarterly profit of 25 million rials ($64.9 million) in the three months to March 31, compared with a profit of 33.4 million rials in the prior-year period, it said on Wednesday.

Five analysts polled by Reuters had, on average, estimated a first-quarter profit of 26.5 million rials.

The bank's shares were trading down 0.9 percent at 6.30am GMT on the Muscat bourse. The shares have risen 10.4 percent year-to-date.

Bank Muscat made a 15-million-rials one-off provision after some of its prepaid travel cards were hit by fraud, it added.

The lender said in late-February it would have to take an impairment charge of up to 15 million rials after a small number of the cards were hit by fraud - an amount United Securities calculated was around 10.5 percent of the bank's estimated 2013 earnings.

The cards allow users to carry currencies abroad rather than using their debit or credit cards in foreign countries, which can be expensive.

Credit impairments for the three-month period stood at 7.4 million rials, down 40.8 percent on the corresponding period of 2012, the bank said.

Loans and advances grew to 5.49 billion rials at the end of the first quarter, up 10 percent from 4.99 billion rials at the same point last year. Deposits increased 9 percent over March 31, 2012, the bank said, rising to 5.51 billion rials from 5.06 billion rials.

Bank Muscat priced a $500 million bond on March 18, the first time it has printed a dollar deal since 2004.

It also raised 75.1 million rials through an equity placement with the International Finance Corporation, a unit of the World Bank, in February.