OIB plans 300 ATMs, mulls Islamic window

MUSCAT: Oman International Bank (OIB), in a major initiative to connect its ATM network to Oman Switch, has decided to install 300 new automated teller machines (ATMs).

Of this, 105 new ATMs will replace the existing machines, which will be completed by the year-end. “We will be able to connect our ATMs to Oman Switch within three months, probably by the end of January next year.

For connecting to Oman Switch, we need to make some changes in our system,” a senior OIB official told ‘Times of Oman’. In fact, OIB is the only Omani bank that is not a member of Oman Switch.

“Our first focus is to change the existing ATMs in different locations. However, at the same time, priority will be accorded to some new locations.”

The official, on condition of anonymity, said as part of a pilot project, seven ATM machines have been successfully replaced with the new ones. Another 12 to 15 new ATMs will be installed by the end of next week.

“As all these machines are going to be installed in separate cabins. The bank has to spend a lot of money for refurbishing the locations.”

OIB, which is in serious discussions with HSBC Oman for a merger, also commenced work on a feasibility study to open an Islamic banking window for the bank.

Further, the bank will open two new branches — one each in Duqm and Mabellah — which will take the total branch network to 87.

OIB said its net profit for the first nine months of 2011 was slightly lower at RO12.18 million as against RO12.94 million posted for the same period of last year.

This was mainly due to a growth in other operating expense, which was higher at RO17.86 million, mainly on account of staff costs, improvements to network of branches and marketing costs, as compared to RO15.21 million for the same period last year.

The interest income stood at RO27.27 million as against RO27.39 million for the same period last year, while interest expenses were reduced to RO4.13 million as against RO5.09 million. Other operating income increased to RO8.24 million from RO7.45 million for the comparable period of last year.


“This was on account of a dividend received for the first time from Investment Stabilisation Fund – Oman. Thus the total income of RO31.39 million was higher than the same period of last year’s level of RO29.75 million,” stated the bank’s chairman Dr Juma Ali Juma Al Juma.

Gross loans surged ahead to RO722.87 million by end ofSeptember 2011 from RO693.77 million. “The bank has committed to a long term loan of RO75 million to partially finance 10 Very Large Crude Carriers starting in the last quarter of this year,” Al Juma noted.


Referring to the bank’s merger proposal, he said if negotiations proceed to an agreement, the combined entity will be a leading player in the fast growing Omani market.

Total deposits rose by 8.7 per cent to RO795.87 million by end-September, 2011 compared to RO732.08 million for the same period last year.

“The bank maintains one of the strongest liquidity positions in the banking sector in the Sultanate.”

The provision for loan impairment came down to RO2.22 million from last year’s level of RO3.32 million Recoveries were lower than last year at RO2.37 million as compared to RO3.46 million for the same period last year, as the bank had a major bad loan recovery last year.

The share capital of the bank stands at RO96.81 million, an increase of RO5.48 million as a result of 6 per cent bonus shares. The net asset per share is 171 baisas which is almost the same as at the end of September last year.

The capital adequacy ratio stands at 14.87 per cent as compared to 15.78 per cent a year ago, on account of the higher loan book. The minimum regulatory limit required by Central Bank of Oman is 12 per cent.

As far as the international operations are concerned, the India operations and the Pakistan operations, continue to be closely monitored to improve negative results. Indian operations are expecting a major recovery in the last quarter of the year.