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MENA

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

    Rahul Shah
    Rahul Shah

    Head of Financials Equity Research

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    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.