Investor Presentation Mar 2020 Contents o Bank Muscat Introduction o - PDF document

Investor Presentation Mar 2020

Contents o Bank Muscat Introduction o Operating Environment o Bank Muscat Business – Overview o Financial Performance o Annexure Note: The financial information is updated as of 31st Mar 2020, unless stated otherwise. 20 ‐ May ‐ 20 2

Bank Muscat Introduction 20 ‐ May ‐ 20 3

Bank Muscat at a glance Ownershi Owner hip as as of of Mar Mar 2020 2020 Ov Over ervi view ew  #1 Bank in Oman with a significant active customer base with ~2 million Royal Court clients and a workforce of 3,837 employees as of 31st Mar 2020. Affairs, 23.63  Established in 1982, headquartered in Muscat with 169 branches across Oman, 2 branches overseas, and 3 representative offices Others, 35.19  Fully diversified commercial bank offering corporate and retail banking services Dubai Financial  Primarily domestic dominated operations with over 95% of operating Group LLC, 11.77 income generated in Oman  Meethaq – pioneer of Islamic Banking services in Oman, officially Public Authority Jabreen for Social launched in January 2013 with full fledged product and services International Insurance, 5.13 offering Development,  Listed on the Muscat Securities Market (with a market cap of USD 2,717 9.99 Ministry of Civil Service million as of 31 st Mar 2020), London Stock Exchange & Bahrain Stock Defence Pension Pension Fund, Exchange Fund, 6.49 7.80 Ke Key Financi nancials Bank Bank Mu Muscat at Fo Footste steps I n US$ Millions, unless otherwise Mar' 20 2019 2018 2017 stated Total Assets 31,796 31,925 31,917 28,959 Gross Loans 24,390 23,875 24,073 22,484 Deposits 21,299 20,894 21,981 19,271 Operating I ncome 300 1,227 1160 1132 Net Profit 86 482 467 459 Tier 1 18.36% 18.78% 17.98% 16.87% Total CAR 19.17% 19.72% 19.22% 18.45% Loans to Deposit Ratio 110.33% 110.37% 105.63% 112.26% NPL Ratio 3.43% 3.25% 3.09% 2.94% Cost/ I ncome 43.78% 41.50% 42.61% 42.22% ROA 1.08% 1.51% 1.53% 1.61% ROE 7.51% 10.73% 10.88% 11.44% 20 ‐ May ‐ 20 4

Bank Muscat – Key Highlights Domi Do minant nant Franc Franchise in in Oma Oman  Largest Bank in Oman by total assets of 35%, as of 29th Feb 2020, around the size of next 3 Omani banks combined. Highe Hi ghest Gove Govern rnment Ownershi Ownership Str Strong Fi Financ nancial ial Me Metrics  Market Capitalisation of USD 2,717 million as at 31 st Mar 2020  Highest Government Ownership among  Stable and consistent financial  Largest branch network with 169 domestic branches Omani Banks performance  The only bank in Oman to be designated a “D ‐ SIB”  Royal Court Affairs: 23.63%  Solid topline income growth  Significant direct and indirect  Stable cost ‐ to ‐ income ratio despite Government ownership through various business and infrastructure entities. expansion  Strong and sustainable profitability Stable Stab le Operat Operating Envir Environment metrics:  Stable banking sector  Operating income 2015 ‐ 2019  Prudential regulatory environment CAGR of 3.7%  Stable political system in the Oman  Net profit 2015 ‐ 2019 CAGR of 1.4% with excellent diplomatic relationship Solid So lid Capi Capital tal Posi Positio ion in the region  Economic growth in Oman supported  Strong capitalization levels offering by increase in hydrocarbon room for substantial growth production, strengthening and  CAR of 19.17% as of 31 st Mar 2020 growing local demand, and discipline fiscal policy measures Stab Stable le Asse Asset Qual Qualit ity Ma Management nagement  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 20 ‐ May ‐ 20 5

Operating Environment 20 ‐ May ‐ 20 6

Sultanate of Oman - Overview Overview Kuwait  2 nd Largest country in the GCC with an area covering approx. 309.5 thousand km 2 , Bahrain strategically located, sharing borders with Saudi Arabia, & UAE. Qatar  Stable Political System, excellent diplomatic relations in the region UAE  Oman explicitly aims to create a neo ‐ liberal free market economy, where the Saudi Arabia private sector is the driver of the economy as opposed to the state Oman  Population of 4.62mn as of Apr 2020 ‐ predominantly represented by Omani Nationals who account for 58.6% of the total population (1)  The economy will continue to grow with the following drivers: Key I ndicators 2019 2020  The increase in hydrocarbon production Sovereign Ratings Moody's\S&P Ba1/BB Ba2/BB-  The Government’s balanced support for the economy with disciplined fiscal Budget Surplus\Deficit in OMR -2.65 Bn (Dec '19) -0.34 Bn (Jan '20) policy measures  Surplus\Deficit % of total revenue -25% (Dec '19) Est. '-23% (Dec '20) Strengthening and growing local demand; increasing services and activities contribution to GDP Net Public Debt (% GDP) 53%-55% Est 55%-60%  Govt. initiated a dedicated program called “Tanfeedh” to focus on economic (1) Source: National Center for Statistics (Dec ’19), Rating Reports: Moody’s and S&P as of Apr 2020 diversification through focus on key sectors in phase 1 viz. manufacturing, logistics and tourism GDP Growth GDP Composition as of Dec 2019 Other services I ncl Agri, Fishing GDP Growth % & Base 5.0% 6.0% Chemicals, 4.7% 10.85% 5.0% Petroleum 4.0% 3.0% Public admin & Activities, 2.2% defence, 12.10% 33.85% 3.0% 2.0% 0.3% ‐ 0.9% 1.0% Real Estate Services, 4.63% 0.0% 2015 2016 2017 2018 Est. 2019 Est. 2020 Est. 2021 ‐ 1.0% Financial ‐ 2.0% I ntermediation, ‐ 2.8% 6.63% ‐ 3.0% ‐ 4.0% Transport, storage & communication, Manufacturing & Source: IMF & World Bank as of Apr 2020 5.54% Mining, 10.39% 20 ‐ May ‐ 20 7 Hotels & Wholesale & Const., Elec. & Restaurants, retail trade, Water supply, 1.05% 6.96% 8.01%

Oman Banking Sector - Overview Overview Loans and Deposit Growth  The Omani banking sector comprises of 7 local banks, 2 specialized banks, 9 US$ billion Gross Loan: +6.1% Deposits: +4.2% foreign commercial banks and two full fledged Islamic Banks 67.3 67.1 65.1 61.4 61.1  59.7 59.2 The top 3 banks after bank muscat contribute around 36.6% of total 54.5 50.8 sector assets. bank muscat represents 35% of total banking sector assets 47.2 as of Feb 2020  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 2016 2017 2018 2019 Feb 2020 capitalization  Implemented Basel 3 regulation with effect from Jan 2014 Gross loan Deposits Oman in the GCC banking sector context (1) Asset Quality (2) Assets as a % of GDP 12.0% 900 250% 793 791 202% 183% 800 160% 200% 625 700 5.6% 7.0% 600 4.8% 159% 150% 433 500 1.9% 390 400 109% 1.9% 1.8% 1.6% 100% 300 219 79% 193 2.0% 138 200 50% 88 81 64 40 100 839 726 430 239 208 0 0% 93 ‐ 3.0% UAE Saudi Qatar Kuwait Oman Bahrain UAE Saudi Arabia Qatar Kuwait Bahrain Oman Arabia Total Assets NPL/ GLs Total Assets in $ Bn GDP in $ Bn Assets as a % of GDP 20 ‐ May ‐ 20 8 (1) GDP data is estimated for FY 2019 (Source: World (2) Source: Central Banks: UAE as of Jan’ 20, Oman Bahrain & Qatar as of Feb’ 20, Bank, National Central Banks) KSA & Kuwait as of Mar’ 20.

Bank Muscat – Unrivalled leading Market Position in Oman Gross Loans (USD Mn) Total Assets (USD Mn) Bank Muscat 31,795 Bank Muscat 24,392 Bank Dhofar 11,312 Bank Dhofar 8,265 National Bank of Oman 9,465 National Bank of Oman 7,582 Sohar International 8,873 Sohar International 6,670 HSBC Bank Oman 6,605 Ahli Bank 5,445 Oman Arab Bank 6,486 Oman Arab Bank 5,278 Ahli Bank 6,535 HSBC Bank Oman 4,190 Deposits (USD Mn) Net Profit (USD Mn) Bank Muscat 21,299 Bank Muscat 86 Bank Dhofar 8,042 National Bank of Oman 134 National Bank of Oman 6,577 Bank Dhofar 23 HSBC Bank Oman 5,387 HSBC Bank Oman ‐ 10 Oman Arab Bank 5,190 Sohar International 16 Sohar International 5,532 Oman Arab Bank 85 Ahli Bank 4,470 Ahli Bank 18 Note: Total assets, deposits, & Net profit as of Dec’ 19 for 20 ‐ May ‐ 20 9 OAB, & NBO, while gross loans for OAB, NBO, BD, & Ahli as of Dec’ 19

Bank Muscat – Dominant domestic franchise in the region Market Share – Deposits Market Share ‐ Assets 61.6% 80.2% 40.4% 35.0% 27.1% 36.9% 34.9% 22.5% 29.2% 30.7% 18.6% 19.5% 9.3% 8.8% CBQ ENBD FAB NCB BM NBK QNB CBQ ENBD FAB NCB NBK BM QNB Asset Quality Strong Capitalization 84.6% 126.4% 272.2% 120.5% 300.0% 250.0% 0.9% 0.7% 1.0% 1.1% 1.1% 200.0% 1.9% 95.0% 2.1% 138.0% 17.4% 150.0% 100.0% 5.5% 5.0% 18.8% 18.0% 16.8% 100.0% 15.9% 14.3% 14.5% 3.4% 3.5% 50.0% 1.9% 1.8% 1.1% 0.0% QNB ENBD FAB NCB BM NBK CBQ CBQ QNB NCB BM FAB NBK ENBD Tier 1 Tier 2 NPL/GL LLR/NPL 20 ‐ May ‐ 20 10 Note: BM, FAB, ENBD, & CBQ as of Mar’ 20, NCB & NBK as of Dec’ 19.

Bank Muscat Business Overview 20 ‐ May ‐ 20 11