DUBAI: Bank Muscat, Oman's largest lender, posted a 26.6 percent decrease in its fourth-quarter net profit on Thursday, missing analysts' estimates and suffering in comparison with a figure boosted by a one-off insurance payment last year.
Despite failing to meet expectations, the bank's shares surged to close up 4.7 percent, against a wider market gain of 1.3 percent. Analysts took heart from loan growth and saw the stock as having value after recent fluctuations.
Shares in Bank Muscat, in common with other Omani companies, have traded wildly in recent weeks as concerns over the impact of falling oil prices on the sultanate's economy have caused major volatility on local markets.
Bank Muscat made a profit of 36.5 million rials ($94.8 million) in the three months to Dec. 31 compared with 49.7 million rials in the year-ago period, it said in a statement.
The bank's fourth quarter 2013 earnings had included a $38.8 million payout from insurers after the bank was the victim of one of the biggest cyber fraud cases in history -- an event which had forced it to make a provision for the amount in the first quarter that year, significantly impacting its earnings.
The latest results came in lower than estimates from EFG Hermes and Gulf Baader Capital Markets, which had forecast 39.20 million rials and 40.89 million rials respectively. .
Net profit in 2014 was 163.2 million rials, up 7.3 percent from the previous year.
"It was not a great set of numbers but the major positive was loan growth, which was up 5 percent in the fourth quarter from the third quarter," said Aarthi Chandrasekaran, senior analyst at NBK Capital, which had forecast a full-year net profit of around 168 million rials.
"Investors like the fact it is a cheap stock and there is growth coming into the banking system."
Impairments for credit losses for the fourth quarter were 23.6 million rials, down from 24 million rials in the same period of last year, Reuters calculated from financial statements.
Loans and advances rose 9.9 percent year-on-year to 6.75 billion rials at the end of December, while deposits increased 16.4 percent to 6.63 billion rials, the bourse filing said.
The lending growth rate is broadly in line with that for the wider market, with central bank data showing a 10.3 percent year-on-year rise in November, the latest month for which figures are available.
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