NBO profit down due to bad loans

Non-performing loans continue to hit National Bank of Oman's profitability as net profit dropped to 1.12 million Omani riyals for the first nine months of 2002, compared to 8.23 million in the corresponding period of the previous year.

Net profit came down largely due to increase in the bad-loan provision from 8.017 million riyals to 21.19 million for the first nine months, especially against bad loan exposure in Egypt, which constitutes about 13 per cent of NBO's total advances.

The bank has classified 43 million riyals, out of the total 93 million Egypt corporate portfolio, as non-performing loans.

"Our operating profit for the period under review is 23.6 million, 22 per cent higher than for the same period in 2001, which indicates steady revenue growth in our core lines of business.

"Our cost to income ratio has improved from 40.44 per cent recorded for 2001 to 38.85 per cent for the period under review," said Stephen Davies, NBO acting chief executive and general manager.

"It is our stated policy to prudently take provisions on a quarterly basis in line with any incremental risk associated with asset quality."