On behalf of the Board of Directors, I am pleased to present the Annual Report for the year ended December 31, 2020.
The year 2020 started on a disconsolate note of the sad demise of our revered HM Sultan Qaboos bin Said. This followed by the outbreak of COVID-19 and its consequential lock down caused an unplanned slowdown of the economy. The operating cash flows for the corporate sector in general came under stress, while economic activity receded through 2020. This resulted in new lending opportunities to be limited, also causing an increase in non-performing loans for the Company.
The Company reorganized its resources towards proactively managing its customers through concerted collection efforts. The Company also ensured that services continue for its customers during the pandemic. Remedial and legal functions were strengthened to continue the focus on recoveries through 2021.
Muscat Finance is optimistic about the Sultanate’s vision 2040 of diversifying the economy into non-hydrocarbon areas, resulting in a diverse source of revenue streams and a more vibrant economy going forward. This will translate into a wider opportunity for Muscat Finance SAOG and the finance sector in general.
Due to the prevailing conditions through the year, Muscat Finance has been selective in new lending. This has resulted in the portfolio growth to be below budgeted levels. The Company stood by existing clients in offering payment deferments where merited and helping them navigate a difficult year.
In Retail finance, signs of improvement in business activity towards the latter half of the year have been observed. The Company has positioned well with its partners through initiatives such as Íhtifal Tamweel’ wherein the end customer receives additional value for the borrowing relationship with the Company. Such alliances will go a long way in capturing lending opportunities as the market activity improves further. On the corporate front, the Company also proactively accommodated our clients through the year.”
Faisal Mohamed Al Yousef