Omani banks plan to raise capital by issuing bonus shares

Omani banks listed on the Muscat Securities Market plan to expand their capital base.

CBOFour banks have submitted recommendations during extraordinary general meetings (EGMs) to increase their capital by distributing bonus shares among shareholders.

The gross capital of the six listed commercial banks by December-end of 2016 stood at OMR1.090 billion; reflecting a growth of OMR85.6 million, compared with 2015. Bank Muscat, whose capital stood at OMR249.6 million as of the end of December 2016, said it will distribute 5 per cent in stock dividends (five shares for each 100 shares), in addition to 25 per cent cash dividends (i.e. 25 baises for share). The annual general meeting (AGM) will consider the recommendation during its meeting on March 19.

Bank Muscat’s net profit rose to OMR176.8 million, from OMR172.2 million in 2015. Its net profit represents about 52 per cent of the OMR342.1 million net profits earned by six other commercial banks this year.

Most commercial banks saw growth in their net profits, except for the National Bank of Oman (NBO), whose profits declined from OMR60.5 million to OMR54.5 million and Bank Sohar, whose profits slipped from OMR27.7 million to OMR19.1 million.

Bank Sohar plans to ramp up its capital this year by distributing 10 per cent bonus shares (i.e.10 shares for each 100 shares), which would make the bank the highest in terms of distributing stock dividends. NBO would combine cash and stock dividends. The bank, which holds its AGM on March 26, said it will distribute 5 per cent in stock dividends, which is five shares for each 100 shares, in addition to 15.92 per cent as cash dividends, for about 16 baises per share.

Bank Dhofar, whose net profits grew last year to OMR48.7 from OMR47.1 million in 2015, proposed to distribute 7.5 per cent in stock dividend (7.5 shares for each 100 shares) and 13.5 per cent cash dividends at 13.5 baisas per share.

Bank Dhofar registered the second highest increase in net profits after Bank Muscat. It is also the second in terms of capital pegged at OMR3.9 billion, compared with Bank Muscat, whose capital stands at OMR10.8 billion.

The gross assets of the six listed commercial banks as of the end of last year stood at OMR24.9 billion.

HSBC Bank, whose capital is OMR200 million and is the second in terms of capital after Bank Muscat, announced that it will distribute 5 per cent in cash dividend, which is 5 baisas per share. The bank’s net profit as of the end of 2016 increased to OMR12.9 million from OMR9.6 million at the end of 2015.

The net profit of Ahlibank, which will distribute 10 per cent in cash dividends or 10 baisas per share, stood at OMR29.9 million, up from OMR27.7 million in 2015. The bank’s capital stands at OMR142.5 million; the lowest among the six commercial banks.

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