Oman Arab Bank SAOG ($OAB)

So thank you very much for attending this session today. I will take you through the bank's performance. And after that, we will take questions. As usual, I think there is a disclaimer. Do you want to make a disclaimer?

Yes. Thank you, Abu Sulaiman. [Foreign Language] Good afternoon, everyone. [Foreign Language]. Thank you, first of all, for joining today's call. And before Abu Sulaiman starts with the overall view of the operating environment and what's happening in the market, just one disclaimer, housekeeping issue. As you can see in front of you on the screen, it's a reminder that today's session is recorded, first of all. And also that the presentation and all of the discussion that will take place after the presentation, it's presented by us and it's not an indication in any way to buy or sell any of the bank's security. And also in the discussion, maybe we'll refer to some of the forward-looking statements, and these statements are based on the current available information that we have today. So I'll just hand it over to Abu Sulaiman to have the opening remarks and overall view of the market and the operating environment. And then we'll take you through the financial performance for 2025.

Yes. So 2025 was quite an exciting year. All the banks, as you have probably seen, have enjoyed a very stable and very good economic environment, although oil prices were below the 2024. However, the general performance of the economy is quite good. The government in 2024 continues to repay the debt. But in 2025, they went back in the market, which is quite a good thing because they keep on going and repaying. The accelerated repayment was primarily to repay the expensive debt. So we've seen also the reserves have gone up from $18.4 billion to $19.6 billion. Okay, so then to GDP. As I said, was going down from very high 2021 at OMR 20.8 billion to OMR 14.6 billion. And the government, they will plan to reduce it to 30% of GDP, which was achieved. Banking sector, as I mentioned, there is a very good track on the banking sector, continuous growth. 2025 was about 7.7% growth for conventional banks with about OMR 27.5 billion conventional loans. As against Islamic, the conventional grew almost 8%; Islamic, about 7.4%. So this is quite a strong growth. And we see that almost all the banks are well covered and we have covered the provisions. And this has gone since corona. All the banks are continuously building up their provision base. So this is very good coverage. Again, customer deposits, also similar more or less in growth. Although it's less than 2024, but still, it's quite strong growth. Conventional banks grew about 5.4%. Islamic banks grew about 9.6%. This is primarily of some big deposits moving from conventional to Islamic because of some big companies which were listed in this year in the Islamic index gaining recently the banks' growth over conventional banks. Loan-to-deposit ratio, although it went down, but still very strong at 98%. So as far as Oman Arab Bank, the growth really was quite impressive in 2025. You can see operating profit, which is the most important ratio to show the performance of the bank, grew at 17%. Loans. At the balance sheet level, the loans and deposits grew 6%, and the similar growth on the customer deposits, which led to a net profit growth of about 13%. Cost base. Although, I mean, we grew that much, however, we managed to control the cost. And our cost-to-income ratio is now 54% high. Again, if you remember the historical, this was quite high, so constantly going down from 57.1% to 54.1%, 2025 and 2024. The upper quadrant shows how we manage the cost. Although we had significant growth, staff costs remain controlled. Although because we have to pay 3% increments, but we will be more or less at an acceptable growth. Depreciation reduction of about OMR 4 million. Other costs went up by about OMR 1.7 million. So this is quite good. With all this, our capital base remains also very, very strong. Core capital such as CET1 is above the requirement of the Central Bank. Again, there is a growth there because of the injection of the capital of OMR 50 million that we have. So capital remains quite strong. Risk-weighted assets, again, well managed in 2025 from 77% in 2024 to about 73% in 2025. So capital remains quite very comfortable and also managing our risk-weighted assets very, very well there. So this is on a very high level a presentation of our performance in 2025. I'm sure many of you must have analyzed our numbers when they were published in more detail. So if you have any specific questions, the three of us are here to answer whatever question.

So if anyone have any questions, we are opening the session for the Q&A. So please feel free to unmute yourself and raise your query.

Am I audible?

Yes.

I have one question on the Tier 1 perpetual bonds. For FY '25, you had close to a net profit of OMR 34.3 million, and out of which, after that, the interest on perpetual bonds was close to OMR 13 million. So are there any plans to replace this expensive capital with a cheaper one in future?

You mean the...

Yes. On net income, it's having an impact.

So most of the banks use all different sources of capital that they could lay their hands on. 2025, we got our shareholders to inject OMR 50 million, which we think at this point of time, for the core capital, that is sufficient. We're not looking at going back to them to ask them to inject more capital at this point of time because we are meeting all the regulatory ratios with regards to core capital. Any other questions? So we are fasting. I don't know whether there is anybody of you also fasting or not. Are we audible to everybody? Or I'm not sure if everybody listens to us or hears us. Peter, are you there? Peter? Rachel Smith, are you there? Sandesh, are you there?

Yes. I asked just now on the Tier 1.

Sandesh, are you guys able to hear us properly?

Yes, I am able to.

All the others, like Glady Inocencio? So if there are no questions, thank you very much, whoever is there and whoever can listen to us. We wish you all the best, and we wish that you enjoy your holidays. It looks like the weather is changing for everybody to enjoy the holidays. Eid Mubarak.

Okay. Thank you.