MUSCAT, July 30 (Reuters) - Profit at Oman’s biggest banks tumbled 41.4 percent in the second quarter to 33.6 million rials ($87.38 million) due to troubles at two Saudi firms and higher debt provisions, analysts and financial reports said.
The total credit provisions of the top five banks soared 225 percent to 52.8 million rials in the second quarter from 16.26 million rials a year earlier.
“The exposures to the Saudi entities for Bank Muscat BMAO.OM and NBO have pulled the scales down on combined profits for the quarter,” Sankar Kailasam, analyst at Gulf Investment Services said.
Bank Muscat said earlier its exposure to Saudi Arabia’s troubled Saad Group [SAADG.UL] and Ahmad Hamad Algosaibi Group totalled $171 million, while National Bank of Oman (NBO) NBO.OM had $17 million exposure.
Bank Muscat set aside the highest provision at 40 million rials, from just 13 million rials in the same period in 2008.
Its net profit was hit the hardest, falling 62 percent to 12 million rials, down from 31.29 million rials.
The provisions of NBO, the country’s second largest bank, soared to 5.61 million rials from 1.15 million rials in the second quarter of last year, while its net profit dropped by nearly half to 6.117 million rials down from 11.63 million rials.
Bank Dhofar’s BDOF.OM provisions rose by 16.7 percent to 3.64 million rials and its net profit fell to 7.65 million rials in the second quarter from 8.4 million rials.
“Oman International Bank (OIB) OIB.OM managed to cut provisions but they are still on the high side reflecting on its profit,” Kailasam added.
OIB trimmed down the credit losses provisions to 1.31 million rials down from 2.91 million rials, but its net profit slipped 11.4 percent to 5.43 million rials.
Bank Sohar BKSB.OM, Oman’s newest bank, had a profit of 2.45 million rials from a loss of 776,000 and its provisions were cut to 1.94 million rials from 2.54 million rials in the second quarter of 2008. (Reporting by Saleh al-Shaibany; Editing by Rupert Winchester)