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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

HSBC posts 31pc net jump, appoints new Chairman

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Business Reporter -


MUSCAT, JAN 30 -


The Board of Directors of HSBC Bank Oman SAOG approved the Bank’s annual financial results for the year ended December 31, 2016.


Net profit increased by 31.0 per cent to RO 16.9 million (compared to RO 12.9 million for the year ended December 31, 2015) due to higher operating income and lower operating expenses partly offset by higher loan impairment charges.


Net operating income, before loan impairment charges, increased by 2.3 per cent to RO 75.2 million compared to RO 73.5 million for 2015 during which the Bank had some significant one-off transactions including the sale of our branches in India and Pakistan.


Net interest income increased by 10.4 per cent to RO 54.3m (compared to RO 49.2m for the year ended December 31, 2015). “This underlying strength was due to higher interest income from corporate lending coupled with rising yields from the investment of surplus liquidity in government securities, partially offset by lower interest income received from retail customers due to the run-off of older high yield retail loans,” the Bank said in a filing to the Capital Market Authority (CMA).


Net fee income decreased by 1.6 per cent to RO 12.3m (compared to RO 12.5m for the year ended December 31, 2015) due to lower custody fees reflecting the MSM performance and lower trade finance fees reflecting declining trade numbers for Oman, it said.


Net trading income increased by 11.4 per cent to RO 7.8m (compared to RO 7.0m for the year ended December 31, 2015) mainly due to the non-repeat of the RO 0.5m one-off foreign exchange loss incurred in 2015. Other operating income fell to RO 0.6m (compared to RO 4.5m for the year ended December 31, 2015) primarily due to the non-repeat of the gain on the disposal of legacy investments of RO 4.6m being booked in 2015.


A net charge of RO 5.6m has been reported for loan impairment charges (compared to a net charge of RO 3.4m for the same period in 2015) arising from retail-specific provisions of RO 4.1m and the corporate general provision of RO 2.1m attributed to the growth in corporate loans and advances. Operating expenses fell 11.5 per cent to RO 48.4m (compared to RO 54.7 in 2015) due to tight cost control.


Loans and advances, net of provisions and reserved interest, grew by 18.1 per cent to RO 1,418.4m (compared to RO 1,200.8m as at December 31, 2015). Customer deposits increased by 3.6 per cent to RO 1,866.7m (compared to RO 1,802.3m as at 31 December 2015). The net loans to deposits ratio grew to 76.0 per cent (compared to 66.6 per cent as at December 31, 2015), it said.


HSBC Oman’s capital adequacy ratio stood at 18.7 per cent as at December 31, 2016 (compared to 19.4 per cent a year earlier).


The Board of Directors has proposed a cash dividend of RO 0.005 per share (nominal value per share of RO 0.100) amounting to RO 10.0m for the full year 2016.


The Board also announced the appointment of Sir Sherard Cowper-Coles (pictured) as a Director and Chairman of the Bank following the Board Meeting held on January 29, 2017. This change was prompted by the resignation of outgoing Chairman, David Eldon, who is taking on additional responsibilities elsewhere in the HSBC Group.


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