Muscat Finance is expanding into new products like warehouse financing for corporates. We see the logistics sector as a promising growth sector and want to support it by offering a specialised product to build warehouses, says Chief Executive Officer Bikram S Rishi in an interview with Oommen John P
Can you highlight Muscat Finance’s financial performance until Q3 of 2016?
Muscat Finance has performed well in a difficult market due to the conservative strategy adopted since last year. Gross Income is up 11 per cent over last year, which has more than covered up for the sharp increase in borrowing costs this year. Operating costs have been kept in control resulting in profit before tax growing by 4 per cent over 2015. Topline growth has been kept flat in line with our strategy and we expect the next few months to be challenging as well
Has profitability improved in 2016?
Profit after tax has been flat compared to last year due to the provisions for a higher tax rate. Profit before tax has increased by 4 per cent. While profitability has improved, demand has slowed down due to the economic environment.
Has the current economic conditions necessitated capital injection into the company to enable it to grow and stabilise?
We are well capitalised and no further capital has been injected due to the current economic conditions. We are guided by and follow the norms as required by the Central Bank of Oman.
How has the company’s auto finance, equipment leasing, working capital finance and debt factoring service fared until Q3 2016 compared to 2015?
All the business verticals have done well as we have been cautious in our lending for some time now. There has been a general slowdown in Q3 on demand for automobile and equipment finance loans.
Are the current interest rates in sync with the needs of the NBFCs?
The borrowing interest rates have been high and will affect the lending decisions of NBFCs and their profits in 2016, as compared to last year. The NBFCs need some action to be taken to improve the liquidity in the market, as that will benefit the consumer and also improve credit flow into the economy.
Is the company expanding into new product portfolios?
The company is expanding into new products like warehouse financing for corporates and for individuals, we have just launched loans to buy gold for ladies. We see the logistics sector as a promising growth sector and want to support it by offering a specialised product to build warehouses. We have also found that in difficult times, gold is an important store of value and have devised a woman focused product to finance the purchase of gold.
What initiatives are in place for training and development of staff?
We have a training plan in place which focuses on the career development of high performing individuals. We are also in the second phase of training our key staff to study and progress towards achieving an ACCA qualification. We are fully committed to providing our staff, both expat and Omani, the best opportunities for training and growth within the company.
What are the company’s CSR activities in 2016?
We have supported a number of initiatives for youth, including the Samail Club and the Mutrah Charity team. We also supported the Oman Cancer Association and plan to continue our support to the various CSR initiatives in Oman.