Equity Analysis /

BANK MUSCAT: Trip notes - still positive, but macro holds the key

    Rahul Shah
    Rahul Shah

    Head of Financials Equity Research

    Tellimer Research
    21 December 2017
    Published byTellimer Research
    Earlier this month we met with five Omani banks. Key takeaways for Bank Muscat investors: The macro environment remains challenging, but 2018 should look better than 2017. Loan growth will remain in mid-single digits, but with a shift from retail to corporate credit demand. Margins should improve slightly, as higher funding costs are passed on to corporate borrowers. The cost/ income ratios should improve very slightly. The asset quality outlook is broadly stable (with any problems focused on expat/ low income retail exposures), but the cost of risk could trend higher as the flow of provision recoveries ebbs.