Muscat - Oman's non-banking financial companies (NBFCs) posted decent growth in income and profits in 2012. And analysts believe that the sector will see strong growth in 2013 on the back of project and infrastructure spending by the government, however, with some competition from the Islamic banks.
An analysis of the six listed NBFCs shows that aggregate income rose 11.94 per cent to RO65.30mn in 2012 from RO58.33mn in the previous year, while their combined net profit rose 17 per cent to RO24.14mn in 2012. According to analysts, all the financing companies, on average, posted a dividend yield of above six per cent for 2012. Al Omaniya Financial Services posted a 17.07 per cent rise in net profit to RO5.65mn from RO4.83mn in the previous year, while National Finance's earnings gained 16 per cent to RO4.11mn from RO3.54mn a year ago. On the other hand, Taageer Finance registered the highest growth in net profit, which increased 21.4 per cent to RO3.90mn from RO3.21mn.
Oman Orix Leasing Co posted a net profit growth of 21 per cent to RO3.16mn in 2012 compared to RO2.61mn in the previous year. The lowest net profit growth was posted by Muscat Finance, at 9.4 per cent, to RO3.91mn in 2012. "We expect some competition for the leasing sector from Islamic banks, especially in auto financing where banks are looking for growth.
Growth visibility, however, will remain strong in 2013, with increase in profitability, a stable growth in asset quality and increased project investments," said Kanaga Sundar, head of research at Gulf Baader Capital Markets (GBCM). Echoing his views, Nandakumar Chenicheri, AVP of asset management at Fincorp, said the sectoral outlook remains positive for 2013 with an increased emphasis on infrastructure spending. "We expect the growth in profitability and revenue to continue on the back of increased government spending on infrastructure. NBFCs can expect some competition from Islamic banks but it is still too early to comment on that."
© Muscat Daily 2013
