Bank Muscat, Oman's largest lender by assets, will issue a one-off dividend, comprising bonus shares and perpetual bonds, to shareholders after its board of directors approved a proposal to optimise the lender's capital structure. 

Bank Muscat shares jumped on the exchange this morning and is presently trading 8.5% higher at OMR0.59.

The one-off dividend will comprise of 1:1 bonus issue, aggregating over 3.75 billion shares and equivalent to OMR375.32, the lender said in a statement on the Muscat Stock Exchange on Wednesday.

The dividend will also include one perpetual bond of OMR1 for every 10 ordinary shares. The bonds will be listed on the exchange and carry a coupon of 4.25% per annum.

The bonds will not have a fixed maturity date but the bank has the option to redeem them five years from the date of issuance.

They will form part of the bank's Tier 1 capital. According to data provider Refinitiv, the bank has risk-adjusted Tier 1 capital ratio of 20.06%, compared with an industry average of 14.94%.

The dividend will not impact the bank's capital position, liquidity or profitability, Bank Muscat said.

The proposals are subject to shareholder and regulatory approvals.

Earlier this month, the bank posted a H1 2022 net profit of OMR99.26 million, 5% higher year-on-year (YoY), despite lower net interest income and higher operating expenses.

(Reporting by Brinda Darasha; editing by Seban Scaria)

brinda.darasha@lseg.com