Jan 26 2012
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Bank Sohar net soars 41.8pc
RO 10m rights issue as capital for Islamic window
As a result and subject to the Central Bank of Oman's and bank's shareholders' approval the Board of Directors has recommended a cash dividend of 8 per cent for the year which corresponds to eight baisas per share. The Board of Directors has also recommended a rights issue to the tune of RO 10 million to its existing shareholders to be used as capital for the Islamic window to be created.
The Chairman emphasised that the bank is continuing with its efforts for achieving sustainable and profitable growth.
Bank Sohar 's annual results show remarkable all round improvement. The operating profit for the year was RO 20.007 million as compared to RO 15.645 million in 2010, an increase of 27.9 per cent. Net interest income during the year climbed 13.6 per cent to RO 34.757 million, as compared to RO 30.595 million in 2010.
The operating income for the year 2011 increased to RO 43.186 million, as compared to RO 35.231 million in 2010, an increase of 22.60 per cent. Operating costs are up by 18.3 per cent from RO 19.586 million in 2010 to RO 23.179 million in 2011.The cost to income ratio stood at 53.67 per cent in 2011, down from 55.6 per cent in 2010.
Impressive gains were achieved in other areas of the bank's business as well. Net loans and advances jumped 12.9 per cent during the year to touch RO 1,020 million, against the previous year's level of RO 903 million. Customer deposits grew 17.2 per cent to RO 1,171 million during the year, as compared to RO 999 million in 2010.
In fact, several significant additions were made to Bank Sohar 's network during 2011. A new branch was opened in Al Buraimi last June, marking Bank Sohar 's debut in Buraimi Governorate. This was followed by the launch of three new branches in Ruwi, Al Amerat and Al Khabourah during the third quarter, thereby enhancing the bank's ability to serve both retail and corporate clients.
ًWith this expansion the bank's network has grown to 25 branches and 44 ATMs. Staff strength has kept pace with the growth and the bank currently has a headcount of 549 and an Omanisation ratio of 90.71 per cent.
A key objective for 2012 is the introduction of Islamic Banking. Towards this goal, the bank is putting in place frameworks, systems and procedures to facilitate the roll-out of shariah-compliant products and services. Competition in this emerging financial sector is expected to be fierce, given the widespread interest in Islamic Banking evinced by local commercial banks, but Bank Sohar is determined to be a key player in this business.
A highlight of the annual report is the bank's Corporate Social Responsibility Programme that has been working to improve the quality of life in the community. The bank has been able to sustain support for social and educational programmes that provide help and assistance to disadvantaged people in the community.
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