Investor Presentation Sep 2019 Contents o Bank Muscat Introduction o - PDF document

Investor Presentation Sep 2019

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 30th Sep 2019, unless stated otherwise. 17 ‐ Nov ‐ 19 2

Bank Muscat Introduction 17 ‐ Nov ‐ 19 3

Bank Muscat at a glance Owner Ownershi hip as as of of Se Sep 2019 2019 Over Ov ervi view ew  #1 Bank in Oman with a significant active customer base with ~2 million clients and a workforce of 3,796 employees as of 30 th Sep 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, 35.47  Fully diversified commercial bank offering corporate and retail banking services  Dubai Financial Primarily domestic dominated operations with over 95% of operating income Group LLC, 11.77 generated in Oman Public Authority  Meethaq – pioneer of Islamic Banking services in Oman, officially launched in for Social ONIC, 9.90 January 2013 with full fledged product and services offering Insurance, 5.13  Listed on the Muscat Securities Market (with a market cap of USD 3,536 million as Civil Service of 30th Sep 2019), London Stock Exchange & Bahrain Stock Exchange Ministry of Pension Fund, Defence Pension 7.61 Fund, 6.49 Key Financi Ke nancials Bank Mu Bank Muscat at Fo Footste steps I n US$ Millions, unless otherwise Sep-19 2018 2017 2016 stated Total Assets 31,958 31,917 28,959 28,104 Gross Loans 24,242 24,073 22,484 21,483 Deposits 21,208 21,981 19,268 19,369 Operating I ncome 914 1,160 1132 1081 Net Profit 367 466 460 459 Tier 1 17.81% 18.14% 16.87% 14.75% Total CAR 19.01% 19.38% 18.56% 16.90% Loans to Deposit Ratio 109.81% 105.63% 112.26% 106.69% NPL Ratio 3.33% 3.09% 2.94% 2.91% Cost/ I ncome 41.06% 42.61% 42.22% 41.83% ROA 1.53% 1.53% 1.61% 1.64% ROE 10.70% 10.83% 11.44% 12.50% 17 ‐ Nov ‐ 19 4

Bank Muscat – Key Highlights Domina minant nt Franch Franchis ise in in Oman Oman  Largest Bank in Oman by total assets of 35.6%, as of 31 st Aug 2019, Str Strong Finan Financia ial Met Metric ics around the size of next 3 Omani banks combined. Hi Highes ghest Govern vernment Owners Ownership hip  Market Capitalisation of USD 3,536 million as at 30th Sep 2019  Stable and consistent financial  Highest Government Ownership among  Largest branch network with 169 domestic branches performance Omani Banks  The only bank in Oman to be designated a “D ‐ SIB”   Solid topline income growth Royal Court Affairs: 23.63%   Significant direct and indirect Government Stable cost ‐ to ‐ income ratio despite business and infrastructure ownership through various entities. expansion  Strong and sustainable profitability Stabl Stable Opera Operating ing Envi vironm ronment ent metrics:  Operating income 2014 ‐ 2018 CAGR  Stable banking sector of 3.9%  Prudential regulatory environment  Net profit 2014 ‐ 2018 CAGR of 2.4%  Stable political system in the Oman with excellent diplomatic relationship in the So Soli lid Cap Capital tal Pos Positi tion region  Economic growth in Oman supported by  Strong capitalization levels offering room increase in hydrocarbon production, for substantial growth strengthening and growing local demand,  CAR of 19.01% as of 30 th Sep 2019 and discipline fiscal policy measures Stab Stable le Asset Asset Quali Quality Managem Management nt  Stable and experienced management with  Conservative lending approach proven track record of successful organic  Strong risk architecture and policies and inorganic growth  Adequate asset quality metrics  Good corporate governance 17 ‐ Nov ‐ 19 5

Operating Environment 17 ‐ Nov ‐ 19 6

Sultanate of Oman - Overview Kuwait Overview  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 private Saudi Arabia sector is the driver of the economy as opposed to the state Oman  Population of 4.66mn as of Oct 2019 ‐ predominantly represented by Omani Nationals who account for 57.3% of the total population  The economy will continue to grow with the following drivers: Key Indicators ( 1 ) 2018 2019  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 Budget Surplus\Deficit in OMR -1.9 Bn (Dec '18) -0.35 Bn (May '19) policy measures  Strengthening and growing local demand; increasing services and activities Surplus\Deficit % of total revenue -19% -7.6% (May '19) contribution to GDP Net Public Debt (% GDP) 50% Est 53%-55%  Govt. initiated a dedicated program called “Tanfeedh” to focus on economic (1) Source: National Center for Statistics (July ’19), Rating Reports: Moody’s and S&P as of Apr 2019 diversification through focus on key sectors in phase 1 viz. manufacturing, logistics and tourism GDP Growth GDP Composition as of Jun 2019 GDP Growth % Other services, 9.42% 6.0% 5.0% 4.7% 5.0% Public admin & Petroleum defence, 10.95% Activities, 4.0% 2.8% 32.88% 3.0% 1.9% Real Estate Services, 4.53% 2.0% 1.1% 1.0% Financial ‐ 0.9% I ntermediation, 6.24% 0.0% 2014 2015 2016 2017 Est. 2018 Est. 2019 Transport, ‐ 1.0% storage & communication, 5.10% ‐ 2.0% Hotels & Manufacturing & Source: IMF data as of Apr 2019, & National Centre for Statistics & Information as of July 2019 Restaurants, Wholesale & Mining, 15.80% Const., Elec. & 0.98% retail trade, 17 ‐ Nov ‐ 19 7 Water supply, 6.73% 7.36%

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: +10.5% Deposits: +7.1% foreign commercial banks and two full fledged Islamic Banks  The top 3 banks after bank muscat contribute around 36.3% of total sector assets. bank muscat represents 35.6% of total banking sector assets as of Aug 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 12.0% 900 250% 793 791 202% 183% 800 160% 200% 625 700 5.6% 5.6% 7.0% 600 159% 150% 433 500 390 1.9% 1.9% 1.8% 400 1.6% 109% 100% 2.0% 300 219 79% 193 138 200 50% 88 81 64 40 100 793 668 400 227 201 91 0 0% ‐ 3.0% UAE Saudi Qatar Kuwait Oman Bahrain UAE Saudi Qatar Kuwait Bahrain Oman Arabia Arabia Total Assets NPL/ GLs Total Assets in $ Bn GDP in $ Bn Assets as a % of GDP 17 ‐ Nov ‐ 19 8 (1) GDP data is estimated for FY 2019 (Source: World (2) Source: Central Banks: UAE as of May’ 19, Qatar as of Jun’19, Kuwait & Bahrain Bank, National Central Banks) as of Aug’ 19, KSA as of Sep’ 19 and Oman as of Sep’ 19.

Bank Muscat – Unrivalled leading Market Position in Oman Gross Loans (USD Mn) Total Assets (USD Mn) Deposits (USD Mn) Net Profit (USD Mn) 17 ‐ Nov ‐ 19 9 Note: Oman Arab Bank Financials as of June’ 19

Bank Muscat – Dominant domestic franchise in the region Market Share ‐ Assets Market Share – Deposits Asset Quality Strong Capitalization 95.2% 126.6% 118.5% 250.0% 227.4% 1.2% 0.9% 0.8% 1.1% 1.1% 200.0% 109.0% 1.7% 1.9% 133.0% 17.3% 150.0% 104.0% 4.9% 17.8% 4.8% 100.0% 17.2% 15.9% 14.6% 14.5% 13.9% 3.3% 3.1% 50.0% 1.9% 1.9% 1.4% 0.0% CBQ QNB NCB BM FAB NBK ENBD QNB ENBD FAB NCB BM NBK CBQ 17 ‐ Nov ‐ 19 10 NPL/GL LLR/NPL Tier 1 Tier 2

Bank Muscat Business Overview 17 ‐ Nov ‐ 19 11