Bank Muscat opened 2026 with a stronger bottom line, posting first-quarter net profit of OMR64 million, up 9 per cent from a year earlier, as higher net interest income combined with lower impairment charges to lift earnings at Oman’s biggest lender. The result points to a bank still benefiting from scale, disciplined funding management and steadier credit costs even as lenders across the Gulf remain alert to economic and geopolitical volatility.
The earnings update matters beyond a single quarter because Bank Muscat remains the dominant force in Oman’s banking system. Its own investor material describes it as the country’s largest bank by assets, with a domestic market share of about 32 per cent, 3.9 million customers, 198 branches and stable investment-grade ratings from Moody’s, S&P and Fitch. That gives the lender unusual weight in signalling broader trends in credit demand, deposit gathering and asset quality across the sultanate’s financial system.
The latest quarterly gain appears to extend a pattern that was already visible through 2025. For the full year, Bank Muscat reported net profit of OMR255.5 million, up 13.3 per cent, while total operating income rose 8.3 per cent and net impairment losses on financial assets fell to OMR60.97 million from OMR64.41 million. At the end of December 2025, customer deposits stood at OMR10.43 billion and net loans and financing receivables at OMR10.74 billion, underlining the balance-sheet depth that has helped the bank convert higher business volumes into earnings growth.
A year earlier, the first quarter had already shown a similar direction of travel, though at a more modest pace. In the first three months of 2025, the bank posted net profit of OMR58.56 million, with net interest income and Islamic financing income rising to OMR102 million and impairment losses falling to OMR15.04 million from OMR16.22 million. Loans and advances, including Islamic financing receivables, rose to OMR10.54 billion, while customer deposits climbed to OMR10.00 billion. Set against that base, the move to OMR64 million this quarter suggests the bank has preserved margin support while keeping provisioning pressure contained.
That combination is important for investors because Gulf banks have spent the past several years balancing stronger rates and healthier margins against the risk that more expensive borrowing could weaken asset quality. Bank Muscat’s own year-end presentation indicated a gross non-performing loan ratio of 3.62 per cent at the end of 2025, down from 3.86 per cent a year earlier, with capital adequacy at 19.66 per cent and tier 1 capital at 19.09 per cent. Those levels suggest the bank entered 2026 with sizeable buffers even before the first-quarter improvement in profit.
The wider domestic backdrop has also been supportive, though not without challenges. Central Bank of Oman data published late last year showed the banking sector’s outstanding credit growing 8.6 per cent year on year by the end of October 2025, while private-sector credit rose 4.4 per cent. That points to an economy still producing lending opportunities, particularly outside the hydrocarbon core, even as banks remain selective in underwriting and closely watch repayment trends.
Oman’s policy setting has helped reinforce that backdrop. The IMF’s 2025 Article IV consultation said the country was continuing reforms aimed at strengthening the financial sector, improving the business environment and supporting diversification. For a bank such as Bank Muscat, which sits at the intersection of corporate finance, retail lending, treasury and Islamic banking, that reform agenda matters because it can widen the pool of bankable projects while reducing the system’s dependence on swings in oil revenue.
Still, the operating environment is not without risk. The IMF this week cut its 2026 growth forecast for the Middle East and North Africa, warning that conflict-related disruption, energy market volatility and weaker confidence could weigh on activity across the region. For lenders, that means the strongest institutions may continue to grow, but they are unlikely to ignore the possibility of renewed pressure on funding costs, borrower sentiment and cross-border business flows.
Against that backdrop, Bank Muscat’s first-quarter performance is likely to be read as a sign of resilience rather than exuberance. The bank has the largest domestic franchise in Oman, a broad deposit base, a sizeable Islamic banking arm through Meethaq, and a track record of maintaining profitability while absorbing shifts in rates and credit conditions. A 9 per cent rise in quarterly profit, powered by stronger interest income and lighter impairments, suggests management has begun the year from a position of relative strength, with the market now watching whether that momentum can be sustained through the rest of 2026.
The earnings update matters beyond a single quarter because Bank Muscat remains the dominant force in Oman’s banking system. Its own investor material describes it as the country’s largest bank by assets, with a domestic market share of about 32 per cent, 3.9 million customers, 198 branches and stable investment-grade ratings from Moody’s, S&P and Fitch. That gives the lender unusual weight in signalling broader trends in credit demand, deposit gathering and asset quality across the sultanate’s financial system.
The latest quarterly gain appears to extend a pattern that was already visible through 2025. For the full year, Bank Muscat reported net profit of OMR255.5 million, up 13.3 per cent, while total operating income rose 8.3 per cent and net impairment losses on financial assets fell to OMR60.97 million from OMR64.41 million. At the end of December 2025, customer deposits stood at OMR10.43 billion and net loans and financing receivables at OMR10.74 billion, underlining the balance-sheet depth that has helped the bank convert higher business volumes into earnings growth.
A year earlier, the first quarter had already shown a similar direction of travel, though at a more modest pace. In the first three months of 2025, the bank posted net profit of OMR58.56 million, with net interest income and Islamic financing income rising to OMR102 million and impairment losses falling to OMR15.04 million from OMR16.22 million. Loans and advances, including Islamic financing receivables, rose to OMR10.54 billion, while customer deposits climbed to OMR10.00 billion. Set against that base, the move to OMR64 million this quarter suggests the bank has preserved margin support while keeping provisioning pressure contained.
That combination is important for investors because Gulf banks have spent the past several years balancing stronger rates and healthier margins against the risk that more expensive borrowing could weaken asset quality. Bank Muscat’s own year-end presentation indicated a gross non-performing loan ratio of 3.62 per cent at the end of 2025, down from 3.86 per cent a year earlier, with capital adequacy at 19.66 per cent and tier 1 capital at 19.09 per cent. Those levels suggest the bank entered 2026 with sizeable buffers even before the first-quarter improvement in profit.
The wider domestic backdrop has also been supportive, though not without challenges. Central Bank of Oman data published late last year showed the banking sector’s outstanding credit growing 8.6 per cent year on year by the end of October 2025, while private-sector credit rose 4.4 per cent. That points to an economy still producing lending opportunities, particularly outside the hydrocarbon core, even as banks remain selective in underwriting and closely watch repayment trends.
Oman’s policy setting has helped reinforce that backdrop. The IMF’s 2025 Article IV consultation said the country was continuing reforms aimed at strengthening the financial sector, improving the business environment and supporting diversification. For a bank such as Bank Muscat, which sits at the intersection of corporate finance, retail lending, treasury and Islamic banking, that reform agenda matters because it can widen the pool of bankable projects while reducing the system’s dependence on swings in oil revenue.
Still, the operating environment is not without risk. The IMF this week cut its 2026 growth forecast for the Middle East and North Africa, warning that conflict-related disruption, energy market volatility and weaker confidence could weigh on activity across the region. For lenders, that means the strongest institutions may continue to grow, but they are unlikely to ignore the possibility of renewed pressure on funding costs, borrower sentiment and cross-border business flows.
Against that backdrop, Bank Muscat’s first-quarter performance is likely to be read as a sign of resilience rather than exuberance. The bank has the largest domestic franchise in Oman, a broad deposit base, a sizeable Islamic banking arm through Meethaq, and a track record of maintaining profitability while absorbing shifts in rates and credit conditions. A 9 per cent rise in quarterly profit, powered by stronger interest income and lighter impairments, suggests management has begun the year from a position of relative strength, with the market now watching whether that momentum can be sustained through the rest of 2026.
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Oman