Bank Muscat (SAOG) (LSE:BKM)

Half Year 2026 Bank Muscat SAOG Earnings Call Transcript

Aug 6, 2026 / 09:00 AM GMT

Release Date Price: $3.84

Transcript

Key Points

Positve

Net profit increased by 9.3% to $137.5 million for H1 2026, reflecting strong business growth.
Non-interest income grew 12.7%, driven by higher investment income and business expansion.
Loan portfolio expanded 6.3% and deposits grew 13.2%, indicating robust balance sheet growth.
Asset quality improved with total provision coverage at 170% and net impairment charges down 20% year-on-year.
Return on equity improved to 13.5% and return on assets reached 1.75%, showing enhanced profitability.
Cost-to-income ratio remained disciplined at 37.8%, demonstrating efficient cost management.
Islamic banking segment holds the highest market share in Oman, contributing to diversification.
International operations contributed 7% of net profit, providing a hedge against domestic competition.
Strong capital position with a floor of 17.5%, well above regulatory minimums.
Management expects continued loan growth of 6-7% for the full year, with a solid pipeline for H2.

Negative

Operating expenses increased 5.8% due to administrative expansion and technology investments.
Loan growth of 6.3% lags behind the sector's double-digit growth, with management citing intentional prudence in retail.
Capital ratio declined to 18.7% from the previous trend of around 20%, though still above the 17.5% floor.
Regulatory mandates to spin off Islamic banking and investment banking activities may increase costs initially.
Islamic banking segment faces lower profitability due to higher funding costs and limited product offerings compared to conventional banks.
Competitive pricing pressures in the retail segment led to intentional slower growth, potentially impacting market share.
Geopolitical uncertainties and global interest rate fluctuations could affect asset quality and provisioning needs.
Fee income growth is expected to be high single-digit, which may not sustain the double-digit pace seen in H1.
The bank's conservative approach may result in missing out on aggressive market share gains by smaller competitors.
The spin-off of Islamic banking could lead to consolidation in the sector, creating uncertainty for Bank Muscat's strategy.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

BKMB.OM - Bank Muscat SAOG
Half Year 2026 Bank Muscat SAOG Earnings Call
Aug 06, 2026 / 09:00AM GMT

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Presentation
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Asmallahu Rahman Raheem Bassalayku wa Salaam ala Sayyidina Muhammad wa ala alaihi wa Sahibiya Jamaeen As-salamu alaikum wa rahmatullah wa barakatu jamiyaan Masaakum Allahu al-Khair Shadni wa isharifni illi rahabbikum liyum fiha al-likaa illi banil khifi al-mathdh an amaliya tua adaa ilbankfi khilal al-fatr al-mawiya al-faynisitura shrin insha'Allah.

Good afternoon, everybody.

Thank you very much for joining us today in this session where we are going to be talking about the financial performance and results of the Bank over the last period of 2026.

With me here today are my colleagues, Sheikh Alfarsi, Deputy CEO, Operations and my colleague Ganesh, Deputy CEO, Investment Banking and Finance.

The

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