National Bank of Oman's annual general meeting (AGM) approved the board of directors' recommendation for a dividend of 20 per cent - 17.5 per cent cash and 2.5 per cent stock. Shareholders also approved the report of the board and the financial statements of the bank for 2011. In addition, a limit of RO200, 000 was fixed to allow the board to contribute towards corporate social responsibility (CSR) initiatives and donations in 2012, a press release said. While addressing shareholders, Mohammed Mahfoodh al Ardhi, NBO deputy chairman, said, “The bank approaches 2012 with optimism as continued government spending is expected to maintain the growth momentum. “The wholesale and investment banking franchise will continue to support domestic project financing and related activity, while mortgages, cards business and low-cost deposit activities will remain the key focus for retail banking. Participation in major domestic transactions and cross border activity in conjunction with NBO's strategic alliance partner - Commercial Bank of Qatar, continues to be key to driving efficiencies by sharing best practices." Ardhi added that NBO will launch an Islamic banking window this year and will provide Islamic Sharia-compliant products and services to both retail and corporate customers, after obtaining regulatory approvals. The bank's net profit after tax increased 26 per cent to RO34.2mn in 2011 compared with RO27.2mn in 2010. Net interest income grew to RO58.2mn, up five per cent from 2010 with the cost of funds improved to 2.13 per cent from 2.64 per cent. Net spreads were 3.18 per cent in 2011. Other income was a strong driver of revenue growth in 2011, with significant improvement in the ratio of non-interest income to total income, at 37 per cent, up from 29 per cent in 2010. Operating expenses increased nine per cent to RO43mn in 2011 as the bank continued to invest in its employees, systems and delivery channel network. The cost to income ratio improved from 51 per cent to 47 per cent on a year-on-year basis due to higher levels of income. Net provisions for credit losses and investments for the year were higher than the previous year by RO2.1mn predominantly due to an increase in impairment of investments classified under the available for sale category, Muscat Daily reported.
