Bank Muscat SAOG advanced to the highest level in almost a month after Oman’s biggest lender posted a 20 percent increase in third-quarter profit, beating analysts’ estimates as lending grew.
The shares rose as much as 1.6 percent to 0.565 rial before closing at 0.561 rial, the highest since Sept. 19. The stock was the second-biggest gainer and the most traded by value on Oman’s MSM30 Index, which climbed 0.6 percent. Third-quarter net income rose to 35.8 million rials ($93 million) from 29.9 million rials a year earlier, according to Bloomberg calculations based on nine-month results provided by the bank.
Quarterly profit beat the 32.6 million-rial mean estimate of six analysts compiled by Bloomberg. The bank’s nine-month net interest income increased 5.3 percent to 168.3 million rials as loans and advances jumped 18 percent, the lender said. Omani banks’ profits will climb 25 percent in the third quarter, the fastest pace in the Gulf Cooperation Council, helped by a rights issue at Bank Muscat, Arqaam Capital Ltd. said last month.
“After a disappointing second quarter, this comes as a relief, with net interest margins going up sequentially,” Jaap Meijer, a Dubai-based analyst at Arqaam, said in an e-mailed note today. “We view the stock as attractive, offering a cheap entry point into the leading Omani-based bank and fears for net interest margins compression are overdone.”
Shares of Bank Muscat, which said in August its rights issue was subscribed 1.275 times, have dropped 13 percent in 2012, lagging the benchmark stock index, which is little changed in the period. The stock trades at a price-to-earnings ratio of 8.5 times, compared with 11 times for the MSM30 Index.
Thirteen analysts including Meijer recommend investors buy the shares of Bank Muscat, while one has a hold rating on the stock, according to data compiled by Bloomberg.