Investor Presentation Mar 2020 Contents o Bank Muscat Introduction o - - PDF document

Investor Presentation Mar 2020

• Bank Muscat Introduction
• Operating Environment
• Bank Muscat Business – Overview
• Financial Performance
• Annexure

20‐May‐20 2

Contents

Note: The financial information is updated as of 31st Mar 2020, unless stated otherwise.

20‐May‐20 3

Bank Muscat Introduction

20‐May‐20 4

Bank Muscat at a glance

Ov Over ervi view ew

• #1 Bank in Oman with a significant active customer base with ~2 million

clients and a workforce of 3,837 employees as of 31st Mar 2020.

• Established in 1982, headquartered in Muscat with 169 branches across

Oman, 2 branches overseas, and 3 representative offices

• Fully diversified commercial bank offering corporate and retail

banking services

• Primarily domestic dominated operations with over 95% of operating

income generated in Oman

• Meethaq – pioneer of Islamic Banking services in Oman, officially

launched in January 2013 with full fledged product and services

• ffering
• Listed on the Muscat Securities Market (with a market cap of USD 2,717

million as of 31st Mar 2020), London Stock Exchange & Bahrain Stock Exchange

Owner Ownershi hip as as of

• f Mar

Mar 2020 2020 Ke Key Financi nancials Bank Bank Mu Muscat at Fo Footste steps

Royal Court Affairs, 23.63 Dubai Financial Group LLC, 11.77 Jabreen International Development, 9.99 Civil Service Pension Fund, 7.80 Ministry of Defence Pension Fund, 6.49 Public Authority for Social Insurance, 5.13 Others, 35.19

I n US$ Millions, unless otherwise stated Mar' 20 2019 2018 2017 Total Assets

31,796 31,925 31,917 28,959 Gross Loans 24,390 23,875 24,073 22,484 Deposits 21,299 20,894 21,981 19,271 Operating I ncome 300 1,227 1160 1132 Net Profit 86 482 467 459 Tier 1 18.36% 18.78% 17.98% 16.87% Total CAR 19.17% 19.72% 19.22% 18.45% Loans to Deposit Ratio 110.33% 110.37% 105.63% 112.26% NPL Ratio 3.43% 3.25% 3.09% 2.94% Cost/ I ncome 43.78% 41.50% 42.61% 42.22% ROA 1.08% 1.51% 1.53% 1.61% ROE 7.51% 10.73% 10.88% 11.44%

20‐May‐20 5

Bank Muscat – Key Highlights

Ma Management nagement

• Largest Bank in Oman by total assets of 35%, as of 29th Feb

2020, around the size of next 3 Omani banks combined.

• Market Capitalisation of USD 2,717 million as at 31st Mar 2020
• Largest branch network with 169 domestic branches
• The only bank in Oman to be designated a “D‐SIB”

Str Strong Fi Financ nancial ial Me Metrics Stab Stable le Operat Operating Envir Environment Hi Highe ghest Gove Govern rnment Ownershi Ownership Do Domi minant nant Franc Franchise in in Oma Oman

• Highest Government Ownership among

Omani Banks

• Royal Court Affairs: 23.63%
• Significant direct and indirect

Government ownership through various entities.

• Stable and consistent financial

performance

• Solid topline income growth
• Stable cost‐to‐income ratio despite

business and infrastructure expansion

• Strong and sustainable profitability

metrics:

• Operating income 2015‐2019

CAGR of 3.7%

• Net profit 2015‐2019 CAGR of 1.4%
• Stable banking sector
• Prudential regulatory environment
• Stable political system in the Oman

with excellent diplomatic relationship in the region

• Economic growth in Oman supported

by increase in hydrocarbon production, strengthening and growing local demand, and discipline fiscal policy measures

• Stable and experienced management

with proven track record of successful

• rganic and inorganic growth
• Good corporate governance

So Solid lid Capi Capital tal Posi Positio ion

• Strong capitalization levels offering

room for substantial growth

• CAR of 19.17% as of 31st Mar 2020

Stab Stable le Asse Asset Qual Qualit ity

• Conservative lending approach
• Strong risk architecture and policies
• Adequate asset quality metrics

20‐May‐20 6

Operating Environment

20‐May‐20 7

Sultanate of Oman - Overview

Overview GDP Growth GDP Composition as of Dec 2019

(1) Source: National Center for Statistics (Dec ’19), Rating Reports: Moody’s and S&P as of Apr 2020

Oman Saudi Arabia UAE Qatar Bahrain Kuwait

Source: IMF & World Bank as of Apr 2020

• 2nd Largest country in the GCC with an area covering approx. 309.5 thousand km2,

strategically located, sharing borders with Saudi Arabia, & UAE.

• Stable Political System, excellent diplomatic relations in the region
• Oman explicitly aims to create a neo‐liberal free market economy, where the

private sector is the driver of the economy as opposed to the state

• Population of 4.62mn as of Apr 2020 ‐ predominantly represented by Omani

Nationals who account for 58.6% of the total population

• The economy will continue to grow with the following drivers:
• The increase in hydrocarbon production
• The Government’s balanced support for the economy with disciplined fiscal

policy measures

• Strengthening and growing local demand; increasing services and activities

contribution to GDP

• Govt. initiated a dedicated program called “Tanfeedh” to focus on economic

diversification through focus on key sectors in phase 1 viz. manufacturing, logistics and tourism

4.7% 5.0% ‐0.9% 2.2% 0.3% ‐2.8% 3.0% ‐4.0% ‐3.0% ‐2.0% ‐1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2015 2016 2017 2018

• Est. 2019
• Est. 2020
• Est. 2021

GDP Growth %

Petroleum Activities, 33.85% Manufacturing & Mining, 10.39% Const., Elec. & Water supply, 8.01% Wholesale & retail trade, 6.96% Hotels & Restaurants, 1.05% Transport, storage & communication, 5.54%

Financial I ntermediation, 6.63% Real Estate Services, 4.63%

Public admin & defence, 12.10% Other services I ncl Agri, Fishing & Base Chemicals, 10.85%

Key I ndicators

(1)

2019 2020

Sovereign Ratings Moody's\S&P Ba1/BB Ba2/BB- Budget Surplus\Deficit in OMR

• 2.65 Bn (Dec '19)
• 0.34 Bn (Jan '20)

Surplus\Deficit % of total revenue

• 25% (Dec '19)
• Est. '-23% (Dec '20)

Net Public Debt (% GDP) 53%-55% Est 55%-60%

20‐May‐20 8

Oman Banking Sector - Overview

Overview

• The Omani banking sector comprises of 7 local banks, 2 specialized banks, 9

foreign commercial banks and two full fledged Islamic Banks

• The top 3 banks after bank muscat contribute around 36.6% of total

sector assets. bank muscat represents 35% of total banking sector assets as of Feb 2020

• Conservative and Prudent Regulator
• A number of regulations and caps in place to support the growth, stability

and sustainability of the Omani banking sector

• Adequate asset quality

with relatively low impaired assets and sound capitalization

• Implemented Basel 3 regulation with effect from Jan 2014

Loans and Deposit Growth

Gross Loan: +6.1% Deposits: +4.2% US$ billion

Oman in the GCC banking sector context(1)

Asset Quality(2)

793 625 390 219 88 64 433 791 193 138 81 40 183% 79% 202% 159% 109% 160% 0% 50% 100% 150% 200% 250% 100 200 300 400 500 600 700 800 900 UAE Saudi Arabia Qatar Kuwait Oman Bahrain

Assets as a % of GDP

Total Assets in $ Bn GDP in $ Bn Assets as a % of GDP

(2) Source: Central Banks: UAE as of Jan’ 20, Oman Bahrain & Qatar as of Feb’ 20,

KSA & Kuwait as of Mar’ 20.

(1) GDP data is estimated for FY 2019 (Source: World

Bank, National Central Banks) 50.8 59.7 65.1 67.1 67.3 47.2 54.5 59.2 61.4 61.1

2016 2017 2018 2019 Feb 2020

Gross loan Deposits

839 726 430 239 208 93 5.6% 1.8% 1.9% 1.6% 4.8% 1.9%

‐3.0% 2.0% 7.0% 12.0%

UAE Saudi Arabia Qatar Kuwait Bahrain Oman

Total Assets NPL/ GLs

20‐May‐20 9

Bank Muscat – Unrivalled leading Market Position in Oman

Total Assets (USD Mn) Gross Loans (USD Mn) Deposits (USD Mn) Net Profit (USD Mn)

Note: Total assets, deposits, & Net profit as of Dec’ 19 for OAB, & NBO, while gross loans for OAB, NBO, BD, & Ahli as

• f Dec’ 19

4,190 5,278 5,445 6,670 7,582 8,265 24,392

HSBC Bank Oman Oman Arab Bank Ahli Bank Sohar International National Bank of Oman Bank Dhofar Bank Muscat

6,535 6,486 6,605 8,873 9,465 11,312 31,795

Ahli Bank Oman Arab Bank HSBC Bank Oman Sohar International National Bank of Oman Bank Dhofar Bank Muscat

4,470 5,532 5,190 5,387 6,577 8,042 21,299

Ahli Bank Sohar International Oman Arab Bank HSBC Bank Oman National Bank of Oman Bank Dhofar Bank Muscat

18 85 16 ‐10 23 134 86

Ahli Bank Oman Arab Bank Sohar International HSBC Bank Oman Bank Dhofar National Bank of Oman Bank Muscat

20‐May‐20 10

Bank Muscat – Dominant domestic franchise in the region

Market Share ‐ Assets Market Share – Deposits Asset Quality Strong Capitalization

9.3% 22.5% 27.1% 18.6% 35.0% 40.4% 61.6% CBQ ENBD FAB NCB BM NBK QNB 8.8% 29.2% 30.7% 19.5% 36.9% 34.9% 80.2% CBQ ENBD FAB NCB NBK BM QNB 5.0% 1.9% 1.8% 3.4% 3.5% 1.1% 5.5% 84.6% 100.0% 138.0% 126.4% 95.0% 272.2% 120.5%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0%

CBQ QNB NCB BM FAB NBK ENBD

NPL/GL LLR/NPL

Note: BM, FAB, ENBD, & CBQ as of Mar’ 20, NCB & NBK as

• f Dec’ 19.

17.4% 16.8% 14.3% 18.0% 18.8% 15.9% 14.5% 1.0% 1.1% 1.1% 0.7% 0.9% 1.9% 2.1% QNB ENBD FAB NCB BM NBK CBQ

Tier 1 Tier 2

20‐May‐20 11

Bank Muscat Business Overview

20‐May‐20 12

Bank Muscat Strategy – Key Pillars

Con Consol solidate te Le Leadin ing Positio Position in in Oma Oman

• Capitalize on growth opportunities in Oman
• Infrastructure development projects and Government focus on economic diversification and developing

tourism

• Omanis entering the workforce; over 45% of the population is less than 19 years old
• Leverage large network of branches and other delivery channels
• Platform to focus on the growth potential
• Cross sell opportunities among business lines and customer segments
• Continue to focus on customer acquisitions and retention
• Focus on fee based income
• Scale up fee driven businesses both in the wholesale banking (transaction banking, investment banking,

treasury) and personal banking (credit card, bancassurance, private banking)

Lev Leverage on

• n technol

chnology and and infras astruc tructur ture in investments

• Pioneering investments in technology supporting growth plans
• Multiple digital banking channels for sales and services
• Technology driven banking to enhance customer experience and improve internal efficiency
• Customer Convenience and Service Quality
• Innovative products and services offering
• Customer centric approach through “To Serve you better, everyday” philosophy

Region Regional al Expan Expansio ion

• Strengthen regional presence through focused and controlled expansion in GCC
• Leverage existing regional presence to scale up business growth
• Focus on opportunities for controlled expansion in GCC and the region

Focus Focus on

• n Islam

Islamic Ban Bankin ing Deve Develo lopm pments ents in in Oma Oman

• Meethaq – Islamic banking platform
• Be the market leader in Islamic Banking Business
• Endeavor to offer full fledged products and services
• Expansion of branch and channel network

Fi Financ nancial ial stre strength th

• Further enhance financial strength
• Strong capitalization and stable returns
• Further enhance the diversified funding mix and large CASA deposit base.
• Efficient management of operating costs

20‐May‐20 13

Bank Muscat – Business Lines

Ke Key Highlig lights Asse Asset Con Contr tribution ion Pr Prof

• fit

Con Contr tribution ion Cor Corporate Bank Banking

• Leading Corporate Bank Franchise
• ffering the full array of corporate

banking services

• ~ 7,200 corporate customers in

Oman

• Strong expertise in project finance
• US$ 11.6bn
• 36.

36.6% 6% of total assets

• US$ 30.81mn
• 35.

35.7% 7% of total profit

Gl Glob

• bal

al Inst stitut utions ns, In Investment Bank Banking & Tr Treasury

• Comprise of treasury, corporate

finance, and asset management

• Financial Institutions
• US$ 6.3bn
• 19.

19.8% 8% of total assets

• US$ 21.49mn
• 24.

24.9% 9% of total profit

Pe Pers rsonal Bank Bankin ing

• Leading Retail Bank platform in

Oman

• ~ 2 million retail customers in

Oman

• Largest distribution network
• US$ 8.9bn
• 27.

27.9% 9% of total assets

• US$ 34.53mn
• 40.

40.0% 0% of total profit

Me Meet etha haq – Islam Islamic Bank Banking

• OMR 70mn (c.US$181mn) capital

assigned to this business

• Officially

launched in January

• 2013. Currently operating through

20 full fledged Islamic branches.

• US$ 3.7bn
• 11.

11.8% 8% of total assets

• US$ 5.02mn
• 5.

5.8% 8% of total profit

Inte nternat ationa nal Oper Operations ns

• Presence

in GCC, Iran and Singapore through

• verseas

branches, rep

• ffices

and subsidiary

• US$ 1.2bn
• 3.

3.9% 9% of total assets

• US$ (5.5)mn
• ‐6.

6.4% of total profit

Deposits Loans & Advances

Ministries & Other Gov Orginisation 27% Private Commercial 24% Financial Institutions 2% Individual & Others 47%

Import Trade 4.1% Export Trade 0.4% Wholesale & Retail Trade 2.0% Mining & Quarrying 6.2% Construction 3.5% Manufacturing 7.7% Electricity, gas and water 7.1% Transport and Communication 8.6% Financial Institutions 4.6% Services 8.8% Personal Loans 25.6% Agriculture and Allied Activities 0.2% Government 0.5% Real Estate 3.5% All Others 1.9% Housing Loans 15.4%

20‐May‐20 14

Corporate Banking

Amounts in USD mn.

Overvi view ew Oppo portuni uniti ties Strate tegy gy

• Le

Leadi ading Corp Corporate Ban Bankin ing Fra Franch chis ise

• Extensive and expanding range of

products and services

• Strong project finance capabilities
• Lar

Large corpo corporate cli client portfo portfolio lio with with c.7,200 7,200 cust customer ers an and lead lead bank bank fo for top top tier tier Omani Omani co corp rporate entitie entities

• High

High level level of

• f sophist

phistication ication dif different erentiated ated thro through techn technolo logy led led inve invest stments

• Co

Commit itment to to mai maintain in st stro rong ng cont contro rol

• v
• ver

er asset asset qualit quality

• Lar

Large num number of

• f infrast

astructure/ ucture/ Indu ndustrial rial project projects in in the the pipeline pipeline

• Privatisation

atisation an and di diversification rsification drive drive by by Governm Government nt

• In

Incr creasing busin business flo flows betw between een Oman Oman and and region regional countries untries

• Levera

Leverage on

• n le

leading position position and and expertis expertise

• Reinforce presence in Oman across all

segments in the value chain

• Benefit from large infrastructure and

industrial projects in Oman

• Focu

Focus fe fee in income generating generating business business

• Transaction banking business to enhance

fee income

• Explore cross sell opportunities among

business lines

• Utilize

lize presen presence in in reg regional markets rkets

• Grow GCC trade flows share

Corpor Corporate Loans Loans‐ Peer eer co comp mpar arison

Asse sset Gr Growth th Oper Operating ing In Income

US$ billion

Note: OAB, Ahli, NBO & Bank Dhofar as of Dec’ 19

10,273 10,623 10,846 11,596 11,232 11,660 2015 2016 2017 2018 2019 Mar' 20 Total Assets 297 319 343 373 377 94 2015 2016 2017 2018 2019 Mar' 20 Operating Income 14.53 5.64 4.04 4.32 2.89 3.55 3.37 BankMuscat Bank Dhofar NBO Sohar International HSBC Oman Ahli Bank Oman Arab Bank

20‐May‐20 15

Wholesale Banking – Global Financial Institutions, Investment Banking & Treasury

Amounts in USD mn.

Overvi view ew Oppo portuni uniti ties Str Strategy gy

• Treasury: funding, asset and liability

management requirements, offer structured solutions to corporate clients

• Corporate Finance: Leader in corporate

advisory: series of successful transactions and track record outside Oman

• Financial Institutions: trade, DCM and

correspondent banking services

• Asset Management: Largest Omani

mutual fund manager with potential for growth & expanding outside Oman. Investment solutions for high net worth individuals

• Sig

Significan ificant cross cross‐se sell opport

• pportunit

unities ies to to

• ther
• ther who

wholesale ale bankin banking clien clients

• Leverage transaction experience in

attracting new corporate finance mandates

• Leverage regional expansion to introduce

new products

• Strong growth potential in the high net

worth market segment

• Stren

Strengthen en Bank Bank Muscat’s Muscat’s leadin leading positio position in in spec ecialised ialised areas areas

• Utilize the presence in regional markets

to expand business

• Leverage specialised product expertise in
• ther markets
• Le

Leve vera rage on ex expertise pertise built built to to further rther gro grow the the market market share share and and increa increase the the market market po potential ial

Secu Securities rities Po Portfo folio Asse sset Gr Growth th Oper Operating ing In Income

5,269 5,169 6,678 6,657 6,299 2016 2017 2018 2019 Mar' 20 Total Assets 156 162 172 193 39 2016 2017 2018 2019 Mar' 20 Operating Income

20‐May‐20 16

Personal Banking

Amounts in USD mn.

Overvi view ew Oppo portuni uniti ties Str Strategy gy

• Lead

Leadin ing Personal Personal Banking Banking Fran Franch chis ise in in Om Oman an

• Over 1.90 million customers
• Front‐runner across retail banking

segments including cards, bancassurance and remittances

• Larg

Largest deliver delivery ch chan annel net network

• rk in

in Om Oman (169 169 branch branches, es, 467 467 ATM ATMs, 128 128 CDM CDMs, 147 147 FFM FFMs and and th the best best onli

• nline

ne pl platf atform

• rm in

in Om Oman an)

• Subst

Substantial ntial low low co cost reta retail il deposit deposit base base

• Merchant

rchant acqui quirin ring market rket shar share of

• f over
• ver 75%

75% by by volum volume as as of

• f Apr

Apr 2020 2020 and and le leading ecomme mmerce rce busines business in in Om Oman

• Governm

Government nt sp spen ending ding res resulting lting in in jo job creatio creation

• In

Incr crease in in salar salaries thro through vario various go govern vernment init initiatives

• Favorab

Favorable le demo demograp aphics hics

• Over 45% of the population less than

19 years old

• Housing

Housing finance nance

• Levera

Leveraging on

• n le

leading presen presence ce in in th the reta retail il segm segmen ent

• Increase penetration and cross sell
• Explore new business and product lines
• Tech

Technolo nology gy‐led led produ product devel developmen ent and and serv servic ice off

• fferings
• Enhan

Enhance process process efficiency efficiency and and cu customer co conven enience

• Focu

Focus on

• n devel

development ent and and utili utilizati ation of

• f

e‐delivery delivery ch chan annels

Pe Pers rsonal Loans Loans‐ Peer eer co comp mpar arison

Asse sset Gr Growth th Oper Operating ing In Income

Note: OAB, Ahli, NBO & Bank Dhofar as of Dec’ 19.

US$ billion 9.85 3.34 3.54 1.89 1.98 2.35 1.28 BankMuscat Bank Dhofar NBO Ahli Bank Oman Arab Bank Sohar International HSBC Oman 7,514 8,148 8,553 8,940 8,870 2016 2017 2018 2019 Mar' 20

Total Assets 497 509 489 539 140 2016 2017 2018 2019 Mar' 20 Operating Income

20‐May‐20 17

Meethaq – Islamic Banking

Amounts in USD mn.

Overvi view ew Oppo portuni uniti ties Strate tegy gy

• One

One of

• f the

the most most succ ccessf essful ul Is Isla lamic bankin banking

• peratio
• peration in

in Oman Oman sinc since 2013 2013

• 20

20 dedicated dedicated branch branches become operative throughout the Sultanate

• Innovation in product offering and services

to create niche

• Established

Established Sharia Sharia Board Board comprising of experienced and reputable Sharia scholars

• Growth momentum continued since the

launch indicating potential in the market

• Shari’a governance structure ensures

transparent banking

• Large network at disposal to leverage

business

• Awareness drives on Shari’a compliant

banking to increase customer base

• To

To be be the the mar market et leader leader by by fa far

• Full fledged product and service offerings
• In

Incr crease Meethaq Meethaq exclus xclusive ve bran branch ch netw network to to an an optim

• ptimum level

level

• Customer Centric approach and

transparency

• Technology driven customer service

delivery within the Shari’a compliance ambit

Financi nancing Po Portfo folio Oper Operating ing In Income

2,259 2,566 2,940 3,096 3,119 500 1,000 1,500 2,000 2,500 3,000 3,500 2016 2017 2018 2019 Mar' 20 66 70 79 78 20 10 20 30 40 50 60 70 80 90 2016 2017 2018 2019 Mar' 20

20‐May‐20 18

Financial Performance

20‐May‐20 19

Operating Performance & Profitability

Ov Over ervie view Net Net Inter eres est Ma Margins

• Resilient operating performance
• Stable top line income growth – 5 year CAGR of 3.7%
• Stable cost to income ratio with marginal growth in
• perating costs
• Strong core revenue generation with net interest income

and commission and fees contributing to over 90% of total

• perating income
• Increasing focus on top line commission and fee income

generation

• Stable net interest margin in spite of increasing cost of

funding.

Oper Operating ing In Income & Cos Cost to to Income Profit

• fitability

ability

66% 65% 68% 67% 70% 23% 21% 22% 22% 22% 11% 14% 10% 11% 8% 41.8% 42.2% 42.6% 41.5% 43.8% 0% 20% 40% 60% 80% 2016 2017 2018 2019 Mar' 20 Net Interest Income Net Commission & fees Other Income Cost to income ratio

3.85% 4.05% 4.31% 4.54% 4.56% 4.56% 1.22% 1.45% 1.73% 2.04% 2.05% 2.03% 2.63% 2.60% 2.58% 2.50% 2.51% 2.53% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 2015 2016 2017 2018 2019 Mar' 20 Yield % Cost % Spread %

459 459 467 482 86 12.50% 11.44% 10.88% 10.73% 1.08%

1.64% 1.61% 1.53% 1.51% 7.51%

‐4.00% 1.00% 6.00% 11.00% 16.00% 21.00% 26.00% 70 120 170 220 270 320 370 420 470

2016 2017 2018 2019 Mar' 20

Net Profit RoAE RoAA

20‐May‐20 20

Asset Quality

Ov Over ervie view Loan Loan Gr Growth

• wth
• Stable loan book growth
• Conservative lending approach
• Focus on high quality assets with access to

top tier borrowers

• Strong project finance capabilities
• Diversified loan portfolio across sectors
• Adequate provisioning of impaired asset
• Conservative approach on provisioning
• IFRS 9 fully implemented

Gr Gross

• ss Loan

Loans by by Sect Sector

• r

Impair paired ed asse assets ts & Provisio isioning

21,484 22,484 24,073 23,875 24,392

2.91% 2.94% 3.09% 3.24% 3.43% 8.4% 4.7% 7.1% ‐0.8% 2.2% ‐2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 2016 2017 2018 2019 Mar' 20 Gross loans in USD (LHS) NPL% (RHS) Loan Growth % (RHS)

815 851 959 987 1,057 624 660 745 774 836

130.6% 128.9% 128.7% 127.5% 126.4%

124.0% 125.0% 126.0% 127.0% 128.0% 129.0% 130.0% 131.0%

2016 2017 2018 2019 Mar' 20

Credit Provision NPL

Import Trade 4.1% Export Trade 0.4% Wholesale & Retail Trade 2.0% Mining & Quarrying 6.2% Construction 3.5% Manufacturing 7.7% Electricity, gas and water 7.1% Transport and Communication 8.6% Financial Institutions 4.6% Services 8.8% Personal Loans 25.6% Agriculture and Allied Activities 0.2% Government 0.5% Real Estate 3.5% All Others 1.9% Housing Loans 15.4%

20‐May‐20 21

Funding & Liquidity

Ov Over ervi view ew Funding unding Mi Mix

• Stable funding structure with a diversified funding base
• Largest deposit base in Oman with significant granularity
• Retail deposits comprise 42% of total deposits
• Top 20 depositors represent 25% of total deposits and comprise of top

tier Omani institutions

• Strong capitalization levels
• Highest CAR among Omani peers and one of strongest among GCC

peers

• Adequately capitalised, with total capital ratio at 19.17% and Tier 1 at

18.36%, above the minimum regulatory levels of 14.5% and 12.5% respectively.

Li Liqu quid id Assets Assets Capit Capital Adequ dequacy acy Ra Ratio tio

71% 69% 72% 69% 70% 8% 8% 8% 10% 9% 15% 17% 16% 17% 16% 6% 5% 4% 4% 4% 2016 2017 2018 2019 Mar' 20 Deposits Borrowings Equity Others

1,368 1,538 1,237 2,260 2,042 2,067 2,080 2,589 3,023 3,161

2,705 2,428 3,394 2,031 1,522

21.85% 20.88% 22.62% 22.91% 21.15% 2016 2017 2018 2019 Mar' 20 Bank Placements T Bills & GDBs Cash & equivalent Liquid Assets to Total assets

14.75% 16.87% 17.98% 18.78% 18.36% 2.15% 1.58% 1.24% 0.94% 0.81% 16.90% 18.45% 19.22% 19.72% 19.17% 15.00% 16.00% 17.00% 18.00% 19.00% 20.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2016 2017 2018 2019 Mar' 20 Tier 1 Ratio Tier 2 Ratio CAR Ratio

20‐May‐20 22

Annexures

20‐May‐20 23

Balance Sheet

Amounts in USD Mn 31-Mar-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16

Cash and bal. with Central Bank 1,522 2,031 3,394 2,428 2,705 Due from banks 2,042 2,260 1,236 1,538 1,368 Loans and Advances 20,449 20,031 20,334 19,113 18,447 I slamic financing receivables 3,049 3,029 2,884 2,520 2,221 Non trading investments 3,839 3,753 3,298 2,668 2,748 Tangible fixed assets 196 205 181 187 194 Other assets (incl. invt in associates) 699 616 590 505 422

Total assets 31,796 31,925 31,917 28,959 28,104

Bank deposits/ FRNs / Bonds 4,086 4,281 3,588 3,478 3,157 Customer deposits (incl. CDs) 18,665 18,210 19,491 16,778 17,389 I slamic Customer's Deposit 2,634 2,683 2,490 2,493 1,982 Other liabilities 1,386 1,478 1,239 1,087 962 Subordinated debt 68 68 102 315 430 Convertible bonds 84 167

Total liabilities 26,838 26,720 26,909 24,236 24,086

Share capital and premium 2,226 2,184 2,146 2,027 1,911 Total reserves 1,314 1,316 1,276 1,222 1,111 Cumulative changes in fair value

• 49
• 1
• 13

44 50 Retained profits 1,127 1,369 1,261 1,092 945 Shareholders' equity

4,618 4,868 4,669 4,385 4,017

Perpetual Tier I Capital

338 338 338 338 Total liabilities + shareholders' equity 31,794 31,925 31,917 28,959 28,104 Key ratios

Loans and advances/ customer deposits 110.3% 110.4% 105.6% 112.3% 106.7% Shareholders' equity/ total assets 14.52% 15.25% 14.63% 15.14% 14.29% Subordinated debt/ (debt + equity) 1.34% 1.28% 2.00% 6.71% 9.66% BI S total capital ratio 19.17% 19.72% 19.22% 18.45% 16.90%

20‐May‐20 24

Profit & Loss Statement

Amounts in USD Mn 31-Mar-20 31-Dec-19 31-Dec-18 31-Dec-17 31-Dec-16

Net interest income 194 756 719 667 651 Net income from Islamic financing 17 68 72 64 61 Other operating income 89 403 370 402 369

Operating income

300 1,227 1,160 1,132 1,081 Operating costs (132) (509) (494) (478) (452) 168 718 666 654 629 Net impairment losses on financial assets (67) (145) (112) (112) (102) Gain/(loss) from associates

• - - 6 4

Profit before Tax

101 572 554 548 531 Taxation (16) (90) (88) (89) (72)

Net Profit

86 482 467 459 459

Key ratios

Cost/income ratio 43.8% 41.5% 42.6% 42.2% 41.8% Return on average assets 1.08% 1.5% 1.53% 1.61% 1.64% Return on average equity 7.51% 10.7% 10.88% 11.44% 12.50% Basic EPS (US$) 0.069 0.156 0.153 0.158 0.166 Share price (US$) 0.836 1.127 1.065 1.023 1.226