Investor Presentation Mar 2019 1 Contents Bank Muscat Introduction - PDF document

Investor Presentation Mar 2019 1

Contents  Bank Muscat Introduction  Operating environment  Bank Muscat business - Overview  Financial Performance  Annexure Note: The financial information is updated as of 31 Mar 2019, unless stated otherwise. 2

Bank Muscat Introduction 3

Bank Muscat at a glance Ownership as of Mar 2019 Overview  # 1 Bank in Oman with a significant active customer base with ~ 2 million clients and a workforce of 3,771 employees as of 31st Mar 2019. Royal Court Affairs, 23.63  Established in 1982, headquartered in Muscat with 169 branches across Oman, 2 branches overseas, and 3 representative offices Others, 35.53  Fully diversified commercial bank offering corporate and retail banking services  Primarily domestic dominated operations with over 95% of operating income generated in Oman  Meethaq – pioneer of Islamic Banking services in Oman, officially Dubai Financial Group LLC, 11.77 launched in January 2013 with full fledged product and services Public Authority offering for Social  Listed on the Muscat Securities Market (with a market cap of USD 3,231 ONIC, 9.90 Insurance, 5.13 million as of 31st Mar 2019), London Stock Exchange & Bahrain Stock Ministry of Civil Service Defence Pension Pension Fund, Exchange Fund, 6.49 7.55 Key Financials Bank Muscat Footsteps I n US$ Millions, unless Q1 2019 2018 2017 2016 otherwise stated Total Assets 31,112 31,917 28,959 28,104 Gross Loans 24,675 24,073 22,484 21,483 Deposits 20,888 21,981 19,268 19,369 Operating Income 302 1,160 1132 1081 Net Profit 119 466 460 459 Tier 1 17.35% 18.14% 16.87% 14.75% Total CAR 18.45% 19.38% 18.56% 16.90% 113.88% 105.63% 112.26% 106.69% Loans to Deposit Ratio NPL Ratio 3.10% 3.09% 2.94% 2.91% Cost/Income 41.76% 42.61% 42.22% 41.83% ROA 1.51% 1.53% 1.61% 1.64% ROE 10.68% 10.83% 11.44% 12.50% 4

Bank Muscat – Key Highlights Dominant Franchise in Oman  Largest Bank in Oman by total assets of 35.1%, as of 28 th Feb 2019, around the size of next 3 Omani banks combined. Strong Financial Metrics Highest Government Ownership  Market Capitalisation of USD 3,231 million as at 31 st Mar  Stable and consistent financial 2019  Highest Government Ownership among performance  Largest branch network with 169 domestic branches Omani Banks   Solid topline income growth  The only bank in Oman to be designated a “D-SIB” Royal Court Affairs: 23.63%   Significant direct and indirect Stable cost-to-income ratio despite business and Government ownership through various infrastructure expansion entities.  Strong and sustainable profitability Stable Operating Environment metrics:  Operating profit 2014-2018 CAGR  Stable banking sector of 3.9%  Prudential regulatory environment  Net profit 2014-2018 CAGR of  Stable political system in the Oman 2.4% with excellent diplomatic relationship Solid Capital Position in the region  Economic growth in Oman supported  Strong capitalization levels offering by increase in hydrocarbon room for substantial growth production, strengthening and growing local demand, and discipline  CAR of 18.45% as of 31st Mar 2019 fiscal policy measures Stable Asset Quality Management  Stable and experienced management  Conservative lending approach with proven track record of successful  Strong risk architecture and policies organic and inorganic growth  Adequate asset quality metrics  Good corporate governance 5

Operating Environment 6

Sultanate of Oman – Overview Overview 2 nd Largest country in the GCC with an area covering approx. 309.5 thousand km 2 ,  Kuwait strategically located, sharing borders with Saudi Arabia, & UAE. Bahrain  Stable Political System, excellent diplomatic relations in the region Qatar UAE Saudi  Oman explicitly aims to create a neo-liberal free market economy, where the private sector Arabia is the driver of the economy as opposed to the state Oman  Population of 4.66mn as of Feb 2019 - predominantly represented by Omani Nationals who account for 56.3% of the total population Key Indicators ( 1 )  2018 2019 The economy will continue to grow with the following drivers:  The increase in hydrocarbon production Sovereign Ratings Moody's\S&P Baa3/BB Ba1/BB  The Government’s balanced support for the economy with disciplined fiscal policy Budget Surplus\Deficit in OMR -1.9 Bn (Nov '18) Est '-2.8 Bn measures  Surplus\Deficit % of total revenue Est -19% Est -28% Strengthening and growing local demand; increasing services and activities contribution to GDP Net Public Debt (% GDP) Est 50% Est 53%-55%  Govt. initiated a dedicated program called “Tanfeedh” to focus on economic (1) Source: National Center for Statistics (Nov ‘18), Rating Reports: Moody’s and S&P as of diversification through focus on key sectors in phase 1 viz. manufacturing, logistics and Apr 2019 tourism GDP Growth GDP Composition GDP Growth % Other services, 10.79% 6.0% 5.0% 4.7% 5.0% Public admin & Petroleum defence, 11.53% Activities, 34.94% 2.8% 4.0% Real Estate 3.0% 1.9% Services, 4.74% 2.0% 1.1% Financial Intermediation, 1.0% 5.99% ‐ 0.9% Transport, storage 0.0% & 2014 2015 2016 2017 Est. 2018 Est. 2019 communication, 5.32% Manufacturing & ‐ 1.0% Mining, 10.26% Hotels & Const., Elec. & Wholesale & Restaurants, Water supply, retail trade, 7.25% ‐ 2.0% 0.94% 8.24% 7 Source: National Center for Statistics and Information, figure as of Sep 2017 Source: IMF data as of Apr 2019, & National Centre for Statistics & Information as of Dec 2018 7

Oman Banking Sector – Overview Overview Loans and Deposit Growth  The Omani banking sector comprises of 7 local banks, 2 specialized banks, US$ billion Gross Loan: +10.5% Deposits: +7.1% 9 foreign commercial banks and two full fledged Islamic Banks  The top 3 banks after bank muscat contribute around 36.6% of total sector assets. bank muscat represents 35.1% of total banking sector assets as of Feb 2019  Conservative and Prudent Regulator  A number of regulations and caps in place to support the growth, stability and sustainability of the Omani banking sector  Adequate asset quality with relatively low impaired assets and sound capitalization  Impleme nted Basel 3 regulation with effect from Jan 2014 Oman in the GCC banking sector context (1) Asset Quality (2) Assets as a % of GDP 900 250% 793 791 202% 800 200% 700 625 183% 160% 600 159% 150% 500 433 390 400 109% 100% 300 79% 219 193 200 138 50% 88 81 64 100 40 0 0% UAE Saudi Arabia Qatar Kuwait Oman Bahrain Total Assets in $ Bn GDP in $ Bn Assets as a % of GDP (1) GDP data is estimated for FY 2019 (Source: World Bank, National (2) Source: Central Banks: Oman, UAE, KSA, Qatar & Kuwait as of Mar 2019, Central Banks) Oman, KSA, UAE & Kuwait as of Feb 2019, Bahrain Bahrain as of Apr 2019. as of Jan 2019, & Qatar as of Dec 2018. 8

Bank Muscat – Unrivalled Leading Market Position in Oman Amounts in USD mn. Gross Loans Total Assets Deposits Net Profit 9

Bank Muscat – Dominant Domestic Franchise in the Region Market Share ‐ Assets Market Share – Deposits Assets as % of Total Sector Assets Deposits as % of Total Sector Deposits Asset Quality Strong Capitalization 80.3% 16.0% 18.5% 22.0% 19.3% 18.45% 16.9% 16.1% 129.6% 123.9% 250.0% 1.1% 207.0% 0.9% 1.1% 0.9% 1.1% 200.0% 106.0% 2.0% 145.0% 1.6% 17.6% 150.0% 106.0% 20.9% 5.9% 18.4% 5.6% 100.0% 17.4% 14.9% 14.9% 14.5% 3.3% 3.1% 50.0% 1.9% 1.8% 1.5% 0.0% QNB ENBD FAB NCB BM NBK CBQ CBQ QNB NCB BM FAB NBK ENBD Tier 1 Tier 2 NPL/GL LLR/NPL Source: GCC Central Banks. Banks’ financial Statements. (1) Information for all banks as of Dec 2017, except for NCB as of Sep 2017 & BBK as of June 2017. 10

Bank Muscat Business Overview 11