National Bank of Oman Q2 2025 slides: Profit up 10.3%, assets grow 10.9%

Introduction & Market Context

National Bank of Oman (MSX:NBOB), the oldest bank in Oman founded in 1973, released its Q2 2025 investor presentation highlighting strong financial performance amid favorable economic conditions. The bank, with a market capitalization of $1.35 billion, has benefited from Oman’s robust economic growth, with the country’s nominal GDP expanding by 4.7% year-over-year in Q1 2025.

Oman’s economic landscape has provided a supportive backdrop for the banking sector, with the government achieving an estimated fiscal surplus of $1.4 billion in 2024 and reducing public debt to $37.4 billion. This prudent fiscal management has earned the country positive rating outlooks from major agencies, with Moody’s upgrading Oman’s rating to Baa3 "Stable."

As shown in the following chart of Oman’s economic indicators:

Quarterly Performance Highlights

NBO reported impressive financial results for the first half of 2025, with net profit reaching $88.4 million, up 10.3% compared to the same period last year. Total assets grew to $14.3 billion as of June 30, 2025, representing a 10.9% year-over-year increase. Gross loans and advances expanded by 9.1% to reach $11.0 billion, while net interest income rose by 1.7% to $138.5 million.

Fee income showed particularly strong growth, increasing by 19.4% from $56.8 million to $67.8 million compared to the corresponding period last year. This performance aligns with the bank’s strategic focus on diversifying revenue streams and enhancing non-interest income.

The bank’s operational efficiency remained stable, with the cost-to-income ratio at 40.8% for Q2 2025, consistent with the 40.76% reported in the earnings call. Return on assets (ROA) for Q2 2025 stood at a healthy 1.29%.

The following chart illustrates NBO’s key profitability metrics and operating income composition:

Asset Quality and Capital Position

NBO maintained strong asset quality metrics in Q2 2025, with the non-performing loan (NPL) ratio at 4.6%. The bank continued its conservative provisioning approach, with total provisions as a percentage of loans standing at 4.2%. Net impairment charges decreased by 6.8% year-over-year to $18.4 million, reflecting improved risk management practices.

The bank’s loan portfolio showed balanced growth across sectors, as illustrated in the following breakdown:

Capital adequacy remained robust with the total capital adequacy ratio at 16.6% for H1 2025, well above regulatory requirements. Liquidity metrics were equally strong, with the liquid asset ratio representing 22.6% of total assets and the Net Stable Funding Ratio strengthening to 113.3% in Q2 2025.

The following chart details NBO’s funding mix and capitalization metrics:

Strategic Initiatives

NBO’s presentation highlighted its strategic priorities centered around three key pillars: safeguarding capital and funding, driving value creation through cost optimization and income growth, and investing in sustainable capabilities and digital transformation.

The bank has placed significant emphasis on integrating Environmental, Social, and Governance (ESG) factors into its strategic framework. This approach aligns with Oman’s sustainability development goals, including the country’s Net Zero 2050 targets and Vision 2040 pillars.

NBO’s comprehensive overview of the bank reveals its strong shareholder base, with The Commercial Bank of Qatar holding 34.90% and Suhail Bahwan holding 14.75% of shares as of June 30, 2025:

A notable area of growth for NBO has been its Islamic banking window, Muzn Islamic Banking, which has operated since 2013. Muzn’s total operating income increased by 28.8% to $13.5 million in Q2 2025 from $10.5 million in Q2 2024, with total assets showing a compound annual growth rate of 41.3%.

The following chart illustrates Muzn Islamic Banking’s impressive performance:

Forward-Looking Statements

Looking ahead, NBO is developing a new three-year strategic plan with continued focus on ESG commitments and innovation in green financial products. The bank is in the final year of its current five-year strategy (2021-2025), during which it has increased market share in both loans and deposits.

The bank remains committed to maintaining a conservative approach to lending while exploring opportunities for growth. According to the earnings call, NBO is considering a potential equity raise to support future expansion, particularly significant given its negative free cash flow yield of -17% reported by InvestingPro.

NBO’s stock closed at $0.29 as of August 26, 2025, showing stability in its market performance. With its strong financial results and strategic positioning, the bank appears well-positioned to navigate the competitive banking landscape in Oman and capitalize on the country’s favorable economic conditions.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.