Sohar International Bank Saog: Interim Condensed Financial Statements For The Nine Months Ended 30 September 2022

SOHAR INTERNATIONAL BANK SAOG
INTERIM CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2022
INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)
(RO’000)
Nine months ended Three months ended
30 September 30 September 30 September 30 September

Notes 2022 2021 2022 2021
Interest income 16 120,752 109,478 44,492 37,487
Interest expense 17 (51,538) (53,647) (18,622) (17,741)
———— ———— ———— ————
Net interest income 69,214 55,831 25,870 19,746
Net income from Islamic financing and investing activities 18 6,784 6,109 2,325 1,917
Other operating income 19 20,667 20,230 7,793 6,287
———— ———— ———— ————
TOTAL OPERATING INCOME 96,665 82,170 35,988 27,950
———— ———— ———— ————
Staff costs (23,893) (21,469) (8,147) (7,195)
Other operating expenses 20 (13,060) (11,755) (4,470) (3,921)
Depreciation (2,785) (2,278) (899) (804)
———— ———— ———— ————
TOTAL OPERATING EXPENSES (39,738) (35,502) (13,516) (11,920)
———— ———— ———— ————
NET OPERATING INCOME BEFORE IMPAIRMENT
56,927 46,668 22,472 16,030
PROVISIONS
———— ———— ———— ————
Loan impairment charges and other credit risk provisions (net) 21 (23,907) (18,653) (11,186) (5,885)
———— ———— ———— ————
PROFIT BEFORE TAX 33,020 28,015 11,286 10,145
Income tax expense (4,934) (4,217) (1,665) (1,548)
———— ———— ———— ————
PROFIT FOR THE PERIOD 28,086 23,798 9,621 8,597
══════ ══════ ══════ ══════
OTHER COMPREHENSIVE INCOME / (EXPENSE)
Items that will not be reclassified to profit and loss

Revaluation gains/(losses) on equity instruments held at fair value
133 (612) 123 (107)
through other comprehensive income (FVOCI)
Items to be reclassified subsequently to profit and loss

Net changes in fair value on debt instruments classified FVOCI 798 1,386 319 (82)
———— ———— ———— ————
OTHER COMPREHENSIVE INCOME / (EXPENSE) FOR
THE PERIOD, NET OF INCOME TAX 931 774 442 (189)
———— ———— ———— ————
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD,
24,572 8,408
NET OF INCOME TAX 29,017 10,063
══════ ══════ ══════ ══════
Profit for the period
Conventional banking 24,438 21,750 8,509 7,791
Islamic banking 3,648 2,048 1,112 806
———— ———— ———— ————
28,086 23,798 9,621 8,597
══════ ══════ ══════ ══════
Baisa Baisa Baisa Baisa
Basic earnings per share for the period 22 4.22 3.46 0.61 0.36
The accompanying notes 1 to 31 form an integral part of these interim condensed financial statements Page 2 of 37
INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY

(Unaudited)
(RO’000)
Share Share Legal General Fair value Subordinated Impairment Retained Total Shareholders’ Perpetual tier 1 Total
capital premium reserve reserve reserve loans reserve reserve earnings Equity capital securities Equity
295,355 18,038 34,389 988 (2,181) 28,000 5,464 16,525 396,578 200,000 596,578
Balance as at 1 January 2022
Profit for the period - - - - - - - 28,086 28,086 - 28,086
Other comprehensive income for the period - - - - 931 - - - 931 - 931
──── ───── ───── ───── ───── ─────── ─────── ──── ────── ───── ────
Total comprehensive income for the period - - - - 931 - - 28,086 29,017 - 29,017
──── ───── ───── ───── ───── ─────── ─────── ──── ────── ───── ────
Rights issue 160,000 - - - - - - - 160,000 - 160,000
Redemption of perpetual tier 1 capital securities - - - - - - - - - (100,000) (100,000)
Perpetual tier 1 interest paid - - - - - - - (15,250) (15,250) - (15,250)
Dividends paid for the year 2021 - - - - - - - (11,960) (11,960) - (11,960)
Reclassification of net change in fair value of - - - - 756 - - (756) - - -
equity instruments upon de- recognition
──── ───── ───── ───── ───── ────── ────── ──── ───── ───── ─────
Balance as at 30 September 2022 455,355 18,038 34,389 988 (494) 28,000 5,464 16,645 558,385 100,000 658,385
════ ═════ ═════ ═════ ═════ ══════ ══════ ════ ════ ═════ ═════
Share Share Legal General Fair value Subordinated Impairment Retained Total Shareholders’ Perpetual tier 1 Total
capital premium reserve reserve reserve loans reserve reserve earnings Equity capital securities Equity
Balance as at 1 January 2021 245,355 18,038 30,520 988 (3,437) 21,000 5,464 13,774 331,702 200,000 531,702
Profit for the period - - - - - - - 23,798 23,798 - 23,798
Other comprehensive income for the period - - - - 774 - - - 774 - 774
──── ───── ───── ───── ───── ─────── ─────── ──── ────── ───── ────
Total comprehensive income for the period - - - - 774 - - 23,798 24,572 - 24,572
──── ───── ───── ───── ───── ─────── ─────── ──── ────── ───── ────
Rights issue 50,000 - - - - - - - 50,000 - 50,000
Perpetual Tier 1 interest paid - - - - - - - (15,250) (15,250) - (15,250)
Rights issue expenses surplus - - 961 - - - - - 961 - 961
Reclassification of net change in fair value of
- - - - 444 - - (444) - - -
equity instruments upon de- recognition
──── ───── ───── ───── ───── ────── ────── ──── ──── ───── ────
Balance as at 30 September 2021 295,355 18,038 31,481 988 (2,219) 21,000 5,464 21,878 391,985 200,000 591,985
════ ═════ ═════ ═════ ═════ ══════ ══════ ════ ════ ═════ ═════
INTERIM CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)
(RO’000)
30 September 30 September
2022 2021
OPERATING ACTIVITIES
Profit before tax 33,020 28,015
Adjustments for:
Depreciation 2,785 2,278
Loan impairment charges and other credit risk provisions (net) 23,907 18,653
Net loss/(gain) on investments 103 (3,256)
Profit on sale of fixed assets (36) -
Income from Islamic investment activities (1,298) (1,230)
Interest on investments (20,868) (16,384)
Interest accrued on subordinated loans 1,832 1,832
────── ──────
Cash from operating activities before changes in operating assets and liabilities 39,445 29,908
Due from banks (5,010) 727
Loans, advances and Islamic financings (net) (210,620) (65,013)
Investment held at fair value through profit or loss (FVTPL) (1,180) 4,564
Other assets 9,314 (31,906)
Due to banks (8,276) 403,217
Customer deposits 231,513 (2,806)
Other liabilities (1,344) 36,070
────── ──────
Net cash from operating activities 53,842 374,761
Income tax paid (2,419) (3,902)
────── ──────
Net cash from operating activities, net of tax 51,423 370,859
══════ ══════
INVESTING ACTIVITIES
Purchase of investments (net) (13,593) (135,165)
Proceeds from sale of investments 272 15,256
Acquisition of property and equipment (2,567) (5,233)
Income from Islamic investment activities 837 804
Interest received on investments 20,868 16,384
────── ──────
Net cash from investing activities 5,817 (107,954)
══════ ══════
FINANCING ACTIVITIES
Dividends paid (11,960) -
Rights issue 160,000 50,000
Redemption of perpetual tier 1 capital securities (100,000) -
Rights issue expenses surplus - 961
Interest paid on subordinated loans (1,571) (1,571)
Interest paid on perpetual tier 1 capital securities (15,250) (15,250)
────── ──────
Net cash used in financing activities 31,219 34,140
══════ ══════
NET CHANGE IN CASH AND CASH EQUIVALENTS 88,459 297,045
CASH AND CASH EQUIVALENT AT BEGINNING OF THE PERIOD 593,226 262,109
────── ──────
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 681,685 559,154
══════ ══════
REPRESENTING:
Cash and balances with Central Bank (other than capital deposit) 83,245 79,579
Due from banks with original maturity (OM) of 90 days or less 281,025 196,560
Investment securities with OM of 90 days or less 404,794 589,126
Due to banks with OM of 90 days or less (87,379) (306,111)
────── ──────
681,685 559,154
══════ ══════
────────────────────────────────────────────────────────────────────
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
AS AT 30 SEPTEMBER 2022
1. Legal status and principal activities
Sohar International Bank SAOG (“the Bank”), formerly Bank Sohar SAOG, was established in the Sultanate of Oman on 4 March 2007 as a public joint
stock company and is primarily engaged in commercial, investment and Islamic banking through a network of thirty commercial banking branches and nine
Islamic banking branches within the Sultanate of Oman. The Bank operates under commercial, investment and an Islamic banking licence issued by the
Central Bank of Oman (CBO) and is covered by its deposit insurance scheme. The Bank started commercial operations from 9 April 2007. The registered
address of the Bank is PO Box 44, Hai Al Mina, Postal Code 114, Muscat, Sultanate of Oman. The Bank has its primary listing on the Muscat Securities
Market.
With effect from 30 April 2013, the Bank obtained a license to operate an Islamic Banking Window (“Sohar Islamic”). Sohar Islamic offers a full range of
Islamic banking services and products. The principal activities of the window include accepting Shari'a compliant customer deposits, providing Shari'a
compliant financing based on Murabaha, Mudaraba, Musharaka, Ijarah, Istisna'a, Salam and providing commercial banking services, investment and other
activities permitted under Islamic Banking Regulatory Framework (IBRF).
The Bank employed 888 employees as of 30 September 2022 (31 December 2021: 888, 30 September 2021: 890).
2. Basis of preparation
These interim condensed financial statements are prepared in accordance with International Accounting Standard No.34 - “Interim Financial Reporting “,
relevant disclosure requirements of the Commercial Companies Law of Oman, Capital Market Authority and the applicable regulations of the CBO. Since
these are interim condensed financial statements, they do not contain all information and disclosures for the full financial statements prepared in accordance
with IFRS. Therefore, it should be read in conjunction with the Bank’s annual financial statements as at 31 December 2021.
In addition, results for the nine months period ended 30 September 2022 are not necessarily indicative of the results that may be expected for the full financial
year ending 31 December 2022. (Requirement of IAS 34 para 16 A)
2.1 Statement of compliance
The accounting policies used in the preparation of the interim condensed financial statements are consistent with those used in the preparation of the annual
financial statements for the year ended 31 December 2021.
2.2 Basis of measurement
These financial statements have been prepared under the historical cost convention except for the following:
derivative financial instruments are measured at fair value;

financial instruments classified as at fair value through profit or loss (FVTPL) are measured at fair value;
financial assets classified at fair value through other comprehensive income (FVOCI) are measured at fair value;
The statement of financial position is presented in descending order of liquidity as this presentation is more appropriate to the Bank’s operations
2.3 Functional and presentation currency
These financial statements are presented in Rial Omani, which is the Bank’s functional currency. All financial information presented in Rial Omani has been
rounded to the nearest thousands, unless otherwise indicated.
2.4 Use of estimates and judgements
In preparation of the Bank’s financial statements, management is required to make certain estimates and assumptions that affect the reported amount of
financial assets and liabilities and the resultant provisions for impairment and fair values. In particular, considerable judgment by management is required
in the estimation of the amount and timing of future cash flows when determining the level of provisions required for impaired loans and receivables as
well as provisions for impairment provision for unquoted investment securities. Estimates and judgments are continually evaluated and are based on
historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future
periods.
Page 5 of 37

3. Application of new and revised International Financial Reporting Standards (IFRS)
For the period ended 30 September 2022, the Bank has adopted all of the new and revised standards and interpretations issued by the International
Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its
operations and effective for periods beginning on 1 January 2022. The new standards and amendments to standards that were effective for annual periods
beginning from 1 January 2022 did not had any material impact on these interim condensed financial statements of the Bank.
3.a Interest rate benchmark reforms
IASB issued amendments to IFRS 9, IAS 39 and IFRS 7 in September 2019 through interest rate benchmark reforms. These amendments modify specific
hedge accounting requirements to allow hedge accounting to continue for affected hedges during the period of uncertainty before the hedged items or
hedging instruments affected by the current interest rate benchmarks are amended as a result of the on‑going interest rate benchmark reforms. The
amendments are relevant to the Bank, provided that the Bank hedges and applies hedge accounting to its benchmark interest rate exposure. The
application of the amendments has no significant impact on the Bank’s accounting as currently the Bank has limited exposure to hedge accounting
relationships.
The Bank has modest volumes of derivative and non‑derivative financial instruments, mostly within its Banking Book, that are not included in hedge
accounting relationships. The fair value of these financial assets and liabilities reflects the uncertainties arising from the interest rate benchmark reforms.
The Bank is closely monitoring the market and the output from the various industry working groups managing the transition to new benchmark interest
rates. This includes announcements made by LIBOR regulators (including the Financial Conduct Authority (FCA) and the US Commodity Futures
Trading Commission) regarding the transition away from LIBOR (including GBP LIBOR, USD LIBOR and JPY LIBOR) to Sterling Overnight Index
Average Rate (SONIA), the Secured Overnight Financing Rate (SOFR), and the Tokyo Overnight Average Rate (TONA) respectively and
announcements on the transition from EONIA to Euro Short Term Rate (€STR). The FCA has made clear that, at the end of 2021, it will no longer seek
to persuade, or compel, banks to submit to LIBOR. Furthermore, EONIA will cease to be published from 3 January 2022.
The Bank established an IBOR transition management team comprising senior executives from Risk management, Finance, Treasury, Legal and IT. The
transition programme is under the governance of the ALCO Committee, chaired by the Chief Executive Officer who reports to the Board. The Bank’s
transition arrangements to alternative benchmark rates have been established. The Bank’s current IBOR linked contracts do not generally include
adequate and robust fall back provisions for a cessation of the referenced benchmark interest rate. However, the Bank is in process of updating its legal
documentation as appropriate and in line with industry best practice.
For the Bank’s derivatives, the International Swaps and Derivatives Association’s (ISDA) fall back clauses were made available at the end of 2019 and
the Bank has commenced discussion with its correspondent banks with the aim to implement this language into its ISDA agreements for derivatives in
both the banking and trading book.
In respect of floating rate customer advances and deposits, the Bank’s response is focused on treating customers fairly and considers several aspects of
transition including the reduction of clients’ exposures to legacy IBOR contracts by amending or replacing existing contracts to include robust fall back
provisions or replace IBOR with relevant alternative benchmark interest rates. A critical aspect of this response is also the development of new products
linked to relevant alternative benchmark interest rates. The Bank will develop a detailed communication plan with a focus on communicating with
customers in a way that is clear, fair and not misleading.
Implementation of this plan commenced in 2021, and will include explanation of what will happen to contracts that mature beyond the end of 2021 and
the effect of IBOR replacement on the customer. The Bank is engaging with the customer to ensure availability of suitable options in this regard. Initial
communications will focus on raising awareness and engagement will increase with detailed discussions with all clients for the required changes in the
contracts, if any. Our response also includes a rigorous training programme to ensure that relevant client‑facing staff have adequate knowledge and
competence to understand the implications of IBORs ending and can respond to customers appropriately.
The Bank will continue to apply the amendments to IFRS 9 until the uncertainty arising from the interest rate benchmark reforms with respect to the
timing and the amount of the underlying cash flows that the Bank is exposed ends. The Bank has assumed that this uncertainty will not end until the
Bank’s contracts that reference IBORs are amended to specify the date the interest rate benchmark will be replaced and the cash flows of the alternative
benchmark rate and the relevant spread adjustment. This will, in part, be dependent on the introduction of fall back clauses which have yet to be added
to the Bank’s contracts and the negotiation with lenders and bondholders
Page 6 of 37

3. Application of new and revised International Financial Reporting Standards (IFRS) (continued)
3.b Covid-19 and Expected Credit Loss (ECL)
ECL provisions and management overlays during the pandemic:
The Bank continues to assess borrowers for other indications of default, taking into consideration the underlying cause of any financial difficulty and
whether it is likely to be temporary as a result of Covid-19 or of a longer term nature. The Bank continues to assess significant corporate exposures to
adequately safeguard against any adverse movements due to Covid-19 in addition to industry specific account level adjustments for retail exposures with
regards to specific industry sectors whose employees are expected to be most impacted.
The Bank has included within its loan impairment charges and other credit risk provisions (net) an element of management overlay in response to
expected credit deterioration due to the economic impact of COVID-19. The impact of such an uncertain economic environment is judgmental and the
Bank will continue to assess its ECL provisions taking into account initiatives by the CBO as well as guidance issued by the International Accounting
Standards Board (IASB).
Relaxation from the IFRS 9 Significant increase in Credit Risk (SICR) criteria:
CBO Circular BSD/CB&FLC/2021/002 dated March 18, 2021 temporarily suspended the requirement of IFRS 9 Significant increase in Credit Risk
(SICR) and two-track approach for loan loss provisioning for FY 2021, CBO circular BSD/CB & FLC/2022/001 further extended this suspension until
financial year ending 31 December 2022. This relaxation mitigates the effects of stage downgrades of customer accounts most impacted by qualitative
and specific quantitative factors relating to credit deterioration. Circular SD/CB & FLC/2022/004 extended the window for Restructuring / Re-scheduling
the credit facilities of affected borrowers until 31 October 2022.
4. Potential mergers
On 23rd November 2021, the Bank announced its intent to explore the possibility of a merger with Bank Nizwa SAOG, subject to regulatory and
shareholder approvals. Approval was received from CBO on 18th January 2022 for the Bank to go ahead with the due diligence process. On June 16th,
2022 the Bank confirmed its commitment to pursue the proposed merger with the due diligence process to be finalised at the earliest.
On 16th June 2022 the Bank announced its intent to explore the possibility of a merger with HSBC Bank Oman SAOG (HSBC Oman), in a deal which
would include HSBC Oman shareholders being offered cash and shares subject to obtaining final approvals from the respective boards, regulators and
shareholders.
On 26th July 2022 the Bank disclosed that it has received HSBC Oman’s acceptance to enter into a non-binding memorandum of understanding with the
Bank, dated 25th July 2022,on proceeding to exclusive discussions in relation to the possible merger between the two entities, on the basis of a merger
by incorporation whereby HSBC Oman would be dissolved and its shareholders offered a consideration valuing HSBC Oman at 1.0x book value, with
such consideration consisting of shares of Sohar International Bank SAOG with the option for the shareholders of HSBC Oman to elect to receive the
consideration in cash, provided that the maximum cash consideration payable by the Bank to the shareholders of HSBC Oman that elect to receive cash
consideration shall not exceed 70% of the total consideration payable by the Bank. The shares of the Bank that would form part of the consideration to
the shareholders of HSBC Oman would value the Bank at1.0x book value. The respective book value of each bank would be calculated later. The ongoing
exclusive discussions, negotiations and the potential merger shall remain subject to due diligence and entry into definitive agreements, in addition to
obtaining final approvals from the respective boards, regulators and shareholders.
Page 7 of 37

(RO’000)
5. Cash and balances with Central Bank
30 September 31 December 30 September

2022 2021 2021
(Unaudited) (Audited) (Unaudited)
Cash 31,525 34,551 36,339

506 507 506
Capital deposit with CBO
Balance with CBO 51,720 60,815 43,240
────── ────── ──────
83,751 95,873 80,085
══════ ══════ ══════
The Capital deposit with CBO cannot be withdrawn without CBO approval.
During the period, average minimum balance to be kept with CBO as statutory reserves is RO 105.37 million (31 December 2021:
95.69 million, 30 September 2021: RO 91.52 million).
6. Due from banks

2022 2021 2021
Local currency:
Money market placements 65,019 - -
————— ————— —————
65,019 - -
————— ————— —————
Foreign currency:
Money market placements 163,422 145,147 167,099
Lending to banks - 462 2,013
Demand balances 52,684 27,351 29,472
————— ————— —————
216,106 172,960 198,584
————— ————— —————
Gross carrying amount 281,125 172,960 198,584
Less: ECL provision (26) (1) (3)

————— ————— —————
281,099 172,959 198,581
═══════ ═══════ ═══════
Analysis of changes in the gross carrying amount and corresponding ECL provision on due from banks:
30 September 2022 30 September2021

(Unaudited) (Unaudited)
Stage 1 Stage 2 Stage 3 Total Total

At 1 January 172,498 462 - 172,960 81,616
New assets originated or purchased 108,627 - - 108,627 137,086
Assets derecognised or matured - (462) - (462) (20,118)
────── ────── ────── ────── ──────
Gross carrying amount 281,125 - - 281,125 198,584
══════ ══════ ══════ ══════ ══════
Page 8 of 37

(RO’000)
6. Due from banks (continued)
30 September
30 September 2022 2021
At 1 January - 1 - 1 32
Net impairment charge/(release) (Note 21) 26 (1) - 25 (29)
────── ────── ────── ────── ──────
ECL provision 26 - - 26 3
══════ ══════ ══════ ══════ ══════
7. Loans, advances and Islamic financings (net)

2022 2021 2021
Corporate 1,965,006 1,833,296 1,777,127

Retail 955,087 916,167 928,020
─────── ─────── ───────
Gross loans, advances and Islamic financings 2,920,093 2,749,463 2,705,147
Less: ECL provision (97,135) (112,113) (124,134)

Less: Contractual interest/profit not recognised (26,393) (25,142) (30,572)
─────── ─────── ───────
(123,528) (137,255) (154,706)
─────── ─────── ───────
2,796,565 2,612,208 2,550,441
═══════ ═══════ ═══════
Gross loans, advances and Islamic financings include RO 384.822 million (31 December 2021: RO 336.012 million,
30 September 2021: RO 294.480 million) through Sohar Islamic financing activities.
Loans, advances and Islamic financings (net) comprise:

2022 2021 2021
Loans 2,687,914 2,525,822 2,455,279

Overdrafts 141,594 122,478 126,584
Loans against trust receipts 77,008 69,542 81,199
Bills discounted 13,577 31,621 42,085
─────── ─────── ───────
Gross loans, advances and Islamic financings 2,920,093 2,749,463 2,705,147
Less: ECL provision (97,135) (112,113) (124,134)

Less: Contractual interest/profit not recognised (26,393) (25,142) (30,572)
─────── ─────── ───────
(123,528) (137,255) (154,706)
─────── ─────── ───────
2,796,565 2,612,208 2,550,441
═══════ ═══════ ═══════
Page 9 of 37

(RO’000)
7. Loans, advances and Islamic financings (net) (continued)
Analysis of changes in the gross carrying amount and corresponding ECL provision on loans, advances and Islamic financings:
30 September 2022
(Unaudited)
Stage 1 Stage 2 Stage 3 Total
At 1 January 2,252,908 348,564 147,991 2,749,463

New assets originated or purchased 462,821 20,532 6,458 489,811
Assets derecognised or repaid (217,186) (55,737) (5,018) (277,941)
Loans written off - - (3,401) (3,401)
Loans transferred to memoranda portfolio - - (38,164) (38,164)
Loans transferred from memoranda portfolio - - 325 325
Transfers to Stage 1 13,477 (12,524) (953) -
Transfers to Stage 2 (41,508) 42,054 (546) -
Transfers to Stage 3 (4,002) (43,333) 47,335 -
────── ────── ────── ──────
Gross carrying amount 2,466,510 299,556 154,027 2,920,093
══════ ══════ ══════ ══════
At 1 January 5,206 34,123 72,784 112,113

Impairment charge 1,342 2,067 34,528 37,937
Impairment release (2,117) (4,708) (4,851) (11,676)
Loans transferred to memorandum portfolio - - (38,164) (38,164)
Loans brought back from memorandum portfolio - - 325 325
Transfers to Stage 1 882 (548) (334) -
Transfers to Stage 2 (135) 309 (173) -
Transfers to Stage 3 (58) (1,162) 1,220 -
────── ────── ────── ──────
ECL provision 5,120 30,081 61,934 97,135
══════ ══════ ══════ ══════
Net impairment charge / (release) Stage 1 Stage 2 Stage 3 Total

────── ────── ────── ──────
Net impairment charge / (release) (Note 21) (775) (2,641) 29,677 26,261
══════ ══════ ══════ ══════
Page 10 of 37

(RO’000)
7. Loans, advances and Islamic financings (net) (continued)
30 September 2021
(Unaudited)

At 1 January 2,130,737 344,288 157,086 2,632,111
New assets originated or purchased 584,733 32,575 11,392 628,700
Assets derecognised or repaid (528,760) (21,771) (4,756) (555,287)
Loans written off - - (568) (568)
Loans transferred from memoranda portfolio - - 191 191
Transfers to Stage 1 25,838 (23,537) (2,301) -
Transfers to Stage 2 (14,978) 16,867 (1,889) -
Transfers to Stage 3 (1,472) (7,251) 8,723 -
────── ────── ────── ──────
Gross carrying amount 2,196,098 341,171 167,878 2,705,147
══════ ══════ ══════ ══════
At 1 January 5,125 41,659 59,659 106,443
Loans written off - - (568) (568)
Loans transferred from memorandum portfolio - - 191 191
Transfers to Stage 1 1,635 (810) (825) -
Transfers to Stage 2 (265) 1,077 (811) -
────── ────── ────── ──────
ECL provision 5,588 30,576 87,970 124,134
══════ ══════ ══════ ══════
Net impairment charge / (release) Stage 1 Stage 2 Stage 3 Total

────── ────── ────── ──────
Net impairment charge / (release) (Note 21) (884) 3,558 15,393 18,067
══════ ══════ ══════ ══════
The analysis of the changes in contractual interest/profit not recognised is as follows:
30 September 30 September
2022 2021
Contractual interest/profit not recognised
Balance at beginning of year 25,142 22,171
Not recognised during the period 7,172 8,926
Written back due to recovery/write off (5,921) (525)
─────── ───────
Balance at end of the period 26,393 30,572
═══════ ═══════
All loans, advances and Islamic financings require payment of interest/profit, some at fixed rates and others at rates that reprice prior to maturity.
Interest/profit reserve account (Reserve interest) is maintained to comply with rules, regulations and guidelines issued by CBO on loans, advances and Islamic
financings that are impaired. As of 30 September 2022, loans, advances and Islamic financings on which interest/profit was not being accrued or where
interest/profit was reserved amounted to RO 154.0 million. (31 December 2021: RO 148.0 million, 30 September 2021: RO 167.9 million).
Page 11 of 37

(RO’000)
8. Investment securities

2022 2021 2021
Equity Investments:
Held at FVOCI 4,945 5,084 5,946

─────── ─────── ───────
Total Equity Investments 4,945 5,084 5,946
─────── ─────── ───────
Debt Investments
Held at FVTPL 95,386 94,774 94,837
Held at FVOCI 416,034 589,255 599,858

Less : ECL provision (438) (797) (895)
─────── ─────── ───────
FVOCI debt investments (net) 415,596 588,458 598,963
─────── ─────── ───────
Held at amortised cost 359,421 345,635 338,989
Less : ECL provision (441) (1,947) (1,875)
─────── ─────── ───────
Held at amortised cost (net) 358,980 343,688 337,114
─────── ─────── ───────
Total Debt Investments 869,962 1,026,920 1,030,914
─────── ─────── ───────
Total Investment securities 874,907 1,032,004 1,036,860
═══════ ═══════ ═══════
8.1 Held at FVTPL

2022 2021 2021
Unquoted equity investments - Oman
Service sector 3,176 3,176 2,500
Quoted debt investments – Foreign
Service sector 101 114 115
Quoted debt investments – Oman
Government development bonds (GDB) 92,110 91,484 92,222
─────── ─────── ───────
Total FVTPL investments 95,386 94,774 94,837
═══════ ═══════ ═══════
As at 30 September 2022, unquoted equity investments include an investment of RO 2.50 million in the Oman Development Fund SAOC
(“Fund”). The Fund was incorporated on 7 May 2014 under license no. 1196427 with the Bank being the founder shareholder. The purpose of
the Fund is to identify mid-segment industrial and manufacturing sectors that leverage Oman’s unique advantages such as its infrastructure, tax
treaties, geography and natural mineral resources for potential investment opportunities. The Bank currently holds a 12.66% stake in the Fund
(31 December 2021: 12.66%, 30 September 2021: 12.66%). The Bank has an Investment Management Agreement with the Fund.
Page 12 of 37

(RO’000)
8 Investment securities (continued)
8.2 Held at FVOCI

Carrying / Carrying / Carrying /
fair value Cost fair value Cost fair value Cost
30 September 30 September 31December 31December 30 September 30 September
2022 2022 2021 2021 2021 2021
(Unaudited) (Unaudited) (Audited) (Audited) (Unaudited) (Unaudited)
Quoted equity investments – Oman

Service sector 4,945 5,309 5,084 6,338 5,946 7,013
Unquoted equity investments – Oman

Service sector - 34 - 34 - 34
─────── ─────── ─────── ─────── ─────── ───────
Total Equity Investments 4,945 5,343 5,084 6,372 5,946 7,047
─────── ─────── ─────── ─────── ─────── ───────
Real estate sector 8,188 7,854 7,138 7,854 7,661 7,854
Less : ECL provision (438) - (429) - (866) -
Treasury bills 49,621 49,405 224,844 224,691 234,881 234,881

Less: ECL provision - - (7) - (7) -
Government development bonds 3051 3001 3,030 3,016 3,070 3,020

Less : ECL provision - - (7) - (7) -
Quoted debt investments – Foreign

Treasury bills 355,174 356,353 354,243 354,258 354,246 354,262
Less : ECL provision - - (354) - (15)
─────── ─────── ─────── ─────── ─────── ───────
Total debt investments 415,596 415,613 588,458 589,819 598,963 600,017
─────── ─────── ─────── ─────── ─────── ───────
Total investments held at FVOCI 420,541 420,956 593,542 596,191 604,909 607,064
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
USD Treasury bills of RO 354.2 million (31 December 2021: RO 354.2 million, 30 September 2021: 354.2 million) are assigned as collateral against the
bank’s borrowings of RO 354.2 million (31 December 2021: RO 354.2 million, 30 September 2021: 354.2 million).
Analysis of changes in the ECL provision on debt investments classified as FVOCI:

30 September
At 1 January 368 429 - 797 880
Net impairment charge / (release) (Note 21) (358) (1) - (359) 15

────── ────── ────── ────── ──────
ECL provision 10 428 - 438 895
══════ ══════ ══════ ══════ ══════
Page 13 of 37

(RO’000)
8. Investment securities (continued)
8.3 Held at amortised cost

2022 2021 2021

Government development bonds 322,257 322,936 315,967
Sovereign sukuks 14,141 - -
Service sector 23,023 22,699 23,022
─────── ─────── ───────

359,421 345,635 338,989
Less: ECL provision (441) (1,947) (1,875)
─────── ─────── ───────

Total investments held at amortised cost 358,980 343,688 337,114
═══════ ═══════ ═══════
Analysis of changes in the fair value and the corresponding ECL provision on debt investments classified as held at amortised cost:
30 September 2022
(Unaudited)
30 September
Stage 1 Stage 2 Stage 3 Total 2021
(Unaudited)
At 1 January 337,022 8,613 - 345,635 222,166

Assets purchased 13,786 - - 13,786 116,823
────── ────── ────── ────── ──────
Gross carrying amount 350,808 8,613 - 359,421 338,989
══════ ══════ ══════ ══════ ══════
Stage 1 Stage 2 Stage 3 Total 30 September

2021
(Unaudited)
At 1 January 1,554 393 - 1,947 626

Net impairment charge / (release) (Note 21) (1,472) (34) - (1,506) 1,249
────── ────── ────── ────── ──────
ECL provision 81 360 - 441 1,875
══════ ══════ ══════ ══════ ══════
Page 14 of 37

(RO’000)
9. Other assets
2022 2021 2021
Acceptances 134,451 137,795 77,143

Prepayments 2,076 3,570 3,053
Receivables 2,060 2,191 1,624
Positive fair value of derivatives (Note 26) 1,453 4,278 4,502
Right-to-use assets 6,960 7,437 7,126
Others 14,417 15,031 13,433
─────── ─────── ───────
161,417 170,302 106,881
═══════ ═══════ ═══════
10. Due to banks

2022 2021 2021
Local currency:
Money market borrowings - 17,028 60,748
Demand balances 14,630 5,109 7,446
─────── ─────── ───────
14,630 22,137 68,194
─────── ─────── ───────
Foreign currency:
Money market borrowings 689,142 733,966 829,343
Demand balances 15,658 47,004 45,036
Syndicated borrowings 19,439 115,756 96,440
─────── ─────── ───────
724,239 896,726 970,819
─────── ─────── ───────
Total Due to banks 738,869 918,863 1,039,013
═══════ ═══════ ═══════
Foreign currency borrowings include bank borrowings amounting to RO 354.2 million (December 2021: RO 354.2
million, September 2021: RO 354.2 million) with underlying collateral in the form of USD Treasury bills of RO 354.2
million (December 2021: RO 354.2 million, September 2021: RO 354.2 million)
Page 15 of 37

(RO’000)
11. Customer deposits

2022 2021 2021
Term deposits 722,762 880,737 868,524

Demand deposits 977,084 841,706 709,790
Saving deposits 457,445 324,360 311,117
Margin deposits 63,590 64,919 64,820
─────── ─────── ───────
2,220,881 2,111,722 1,954,251
═══════ ═══════ ═══════

Islamic Banking 2022 2021 2021
Term deposits 189,957 137,984 154,533

Demand deposits 169,960 92,660 72,742
Saving deposits 43,830 50,742 45,857
Margin deposits 1,350 1,357 1,376
────── ────── ──────
405,097 282,743 274,508
────── ────── ──────
Total Customer deposits 2,625,978 2,394,465 2,228,759
═══════ ═══════ ═══════
12. Other liabilities
30 September 31 December 30-September

2022 2021 2021
Acceptances 134,451 137,795 77,143

Staff entitlements 2,164 1,870 1,502
Income tax provision 12,102 9,616 9,069
Negative fair value of derivatives (Note 26) 16 79 283
Deferred tax liabilities 1,144 1,115 903
Other accruals and provisions 30,291 27,631 31,193
ECL provision on loan commitments
and financial guarantees (Note 15) 3,313 3,828 1,322
Lease liability on right of use assets 5,828 6,753 6,165
─────── ─────── ───────
189,309 188,687 127,580
═══════ ═══════ ═══════
Page 16 of 37

(RO’000)
13. Share capital
The authorised share capital of the Bank is 10,000,000,000 shares (31 December 2021: 4,000,000,000, 30 September 2021: 4,000,000,000).
The shareholders approved the increase of 6,000,000,000 shares on 18th August 2022 after having obtained all regulatory approvals. The
issued shares of the Bank are 4,590,062,290 shares (31 December 2021: 2,990,062,290 shares,30 September 2021: 2,990,062,290 shares).
The paid up share capital of the Bank is RO 455.355 million (31 December 2021: RO 295.355 million, 30 September 2021: RO 295.355
million).
On 22 September 2022, the Bank completed the issuance of 1,600,000,000 shares through rights issue to its existing shareholders at a price
of 102 baisa per share consisting of nominal value of 100 baisa per share and 2 baisa per share to cover the rights issue expenses, resulting
in an increase in share capital of RO 160 million.
As at 30 September 2022, the following shareholders held 10% or more of the Bank’s capital, either individually or together with related parties:
Number of shares % Holding

The Royal Court of Affairs 752,157,388 16.39
Oman Investment & Finance Co. SAOG 707,999,671 15.42
14. Perpetual Tier 1 Capital Securities
The Bank issued its first Perpetual Tier 1 Capital Securities amounting to RO 100 million on 25 September 2017. These securities bear interest on
their nominal amount from the issue date to the first call date at a fixed annual rate of 7.75% with interest rate reset at five year intervals. The interest
is payable semi-annually in arrears and treated as a deduction from equity. On 25th September 2022 the Bank, after prior consent from the CBO,
exercised its option to redeem the securities in full.
On 14 March 2019, the Bank issued its second Perpetual Tier 1 Capital Securities amounting to RO 100 million. These securities bear interest on
their nominal amount from the issue date to the first call date at a fixed annual rate of 7.50% with interest rate reset at five year intervals. The interest
is payable semi-annually in arrears and treated as a deduction from equity.
Both the securities constitute direct, unconditional, subordinated and unsecured obligations of the Bank and are classified as equity in accordance
with IAS 32: Financial Instruments – Classification. They do not have a fixed or final maturity date. The Bank may at its discretion and after prior
consent from the relevant regulatory authority, exercise its option to redeem the securities in full (not in part) on the first Call Date, i.e. the 5th
anniversary of the Issue Date, and every six months thereafter, again subject to the prior consent of the regulatory authorities. The Bank at its sole
discretion may elect not to pay the interest. This is not considered as an event of default. If the Bank does not pay the interest, on a scheduled payment
date (for whatever reason), it cannot make any other distribution or payment on or with respect to its ordinary shares or any of its other Common
Equity Tier 1 instruments or securities, ranking junior to or pari-passu with the Perpetual Tier 1 Capital Securities unless and until it has paid one
interest payment in full on the securities. The terms of the Perpetual Tier 1 Capital Securities issuance allow the Bank to write-down (in whole or in
part) any amounts due to the holders of the securities under certain circumstances.RO 15.25 million was paid as interest during the period ended 30
September 2022 (31 December 2021: 15.25 million, 30 September 2021: RO 15.25 million) and is recognised in the statement of changes in equity.
On 16th June 2022, the Bank announced its intention to issue its third Perpetual Tier 1 Capital Securities amounting to RO 50 million with a green –
shoe option of RO 25 million subject to regulatory and shareholder approvals. The shareholders approved the proposed transaction on 18th August
2022.
Page 17 of 37

(RO’000)
15. Contingent liabilities and commitments

15.1 Contingent liabilities
Standby letters of credit and guarantees commit the Bank to make payments on behalf of customers, contingent upon the failure of the customer to
perform under the terms of a specified contract.

2022 2021 2021
Guarantees 231,849 235,442 227,528

Documentary letters of credit 63,368 103,079 103,756
────── ────── ──────
295,217 338,521 331,284
══════ ══════ ══════
15.2 Commitments
Credit related commitments include commitments to extend credit, standby letters of credit and guarantees that are designed to meet the
requirements of the Bank’s customers. Commitments to extend credit represent contractual commitments to make loans and revolving credits.
Commitments generally have fixed expiry dates or other termination clauses and require the payment of a fee. Since commitments may expire
without being drawn upon, the total contracted amounts do not necessarily represent future cash obligations.

2022 2021 2021
Capital commitments 4,607 3,311 2,776

Credit related commitments 480,361 516,515 416,606
────── ────── ──────
484,968 519,826 419,382
══════ ══════ ══════
Page 18 of 37

(RO’000)
15. Contingent liabilities and commitments (continued)
Analysis of changes in the gross carrying amount and corresponding ECL provision on credit related commitments, contingent liabilities and
acceptances:

2022 2021 2021
Contingent liabilities 295,217 338,521 331,284

Credit related commitments 480,361 516,515 416,606
Acceptances 134,451 137,795 77,143
────── ────── ──────
Gross carrying amount 910,029 992,831 825,033
══════ ══════ ══════
30 September
At 1 January 943,193 46,995 2,774 992,962 901,014

New assets originated or purchased 426,984 4,764 140 431,888 332,339
Assets derecognised or repaid (496,201) (16,457) (2,163) (514,821) (408,320)
Transfers to Stage 1 11,456 (11,348) (108) - -
Transfers to Stage 2 (2,623) 2,627 (4) - -
Transfers to Stage 3 (2,175) (72) 2,247 - -
────── ────── ────── ────── ──────
Gross carrying amount 880,634 26,509 2,886 910,029 825,033
══════ ══════ ══════ ══════ ══════
At 1 January 1,673 727 1,428 3,828 1,972

Impairment charge 612 (246) 166 532 918
Impairment release (773) (83) (190) (1,046) (1,567)
Transfers to Stage 1 32 (32) - - -
Transfers to Stage 2 (10) 10 - - -
Transfers to Stage 3 (1) (8) 9 - -
────── ────── ────── ────── ──────
ECL provision 1,533 368 1,413 3,313 1,322
══════ ══════ ══════ ══════ ══════
Net impairment charge/(release) Stage 1 Stage 2 Stage 3 Total
Impairment charge 612 (246) 166 532 918

Impairment release (773) (83) (190) (1,046) (1,567)
────── ────── ────── ────── ──────
Net impairment charge/(release)(Note 21) (161) (329) (24) (514) (649)
══════ ══════ ══════ ══════ ══════
Page 19 of 37

(Unaudited)
(RO’000)
16. Interest income


2022 2021 2022 2021
Due from banks 1,207 485 871 152

Loans and advances 98,677 92,609 35,682 31,321
Investment securities 20,868 16,384 7,939 6,014
───── ───── ───── ─────
120,752 109,478 44,492 37,487
═════ ═════ ═════ ═════
17. Interest expense Nine months ended Three months ended

2022 2021 2022 2021
Due to banks 8,900 8,360 3,915 2,819

Customer deposits 40,806 43,455 14,090 14,305
Subordinated loans 1,832 1,832 617 617
───── ───── ───── ─────
51,538 53,647 18,622 17,741
═════ ═════ ═════ ═════
18. Net income from Islamic financing and investing activities
18.1 Gross income earned

2022 2021 2022 2021
Due from banks 121 25 120 4

Financings 13,772 12,025 4,989 3,944
Investment securities 1,298 1,230 435 435
────── ────── ────── ──────
15,191 13,280 5,544 4,383
══════ ══════ ══════ ══════
18.2 Profit paid

2022 2021 2022 2021
Cus Customer deposits 7,556 6,994 2,927 2,301

Due to banks 851 177 292 165
────── ────── ────── ──────
8,407 7,177 3,219 2,466
────── ────── ────── ──────
Net income from Islamic financing and 6,784 6,109 2,325 1,917
investing activities ══════ ══════ ══════ ══════
Page 20 of 37

(Unaudited)
(RO’000)
19. Other operating income


2022 2021 2022 2021
Fees and commissions 16,740 12,644 6,820 4,700

Net gains from foreign exchange 3,615 3,889 814 1,390
Dividend income 375 395 183 184
Profit on sale of fixed assets 36 - 36 -
Bad debt recovery 4 46 2 37
Gain/(loss) on sale of investments (103) 3,256 (62) (24)
───── ───── ───── ─────
20,667 20,230 7,793 6,287
═════ ═════ ═════ ═════
20. Other operating expenses


2022 2021 2022 2021
Operating and administration costs 9,796 8,950 3,431 3,046

Occupancy cost 2,703 2,582 951 854
Directors remuneration 525 150 75 -
Directors sitting fees 9 32 3 8
Shari’a supervisory board remuneration and sitting fees 27 41 10 13
───── ───── ───── ─────
13,060 11,755 4,470 3,921
═════ ═════ ═════ ═════
21. Loan impairment charges and other credit risk provisions (net)

Note 30 September 30 September 30 September 30 September
2022 2021 2022 2021
Net impairment charge / (release):
Loans, advances and Islamic financings (net) 7 26,261 18,067 11,200 6,291
Contingent liabilities and commitments 15 (514) (649) (49) (390)
Due from banks 6 25 (29) 26 (21)
Investment securities held at amortised cost 8.3 (1,506) 1,249 1 1
Investment securities held at FVOCI 8.2 (359) 15 8 4
────── ───── ────── ─────
Loan impairment charges and other credit risk 23,907 18,653 11,186 5,885
provisions (net)
══════ ═════ ══════ ═════
Page 21 of 37

(Unaudited)
(RO’000)
22. Basic earnings per share
Basic earnings per share is calculated by dividing profit for the period less interest on perpetual tier 1 capital securities by the weighted
average number of shares outstanding during the period.

2022 2021 2022 2021
Profit for the period 28,086 23,798 9,621 8,597

Less: Interest paid on perpetual tier 1 capital securities (15,250) (15,250) (7,687) (7,687)
────── ────── ────── ──────
12,836 8,548 1,934 910
────── ────── ────── ──────
Weighted average number of shares outstanding during the
period (‘000) 3,042,810 2,473,172 3,146,584 2,549,241
────── ────── ────── ──────
Basic earnings per share for the period (baisa) 4.22 3.46 0.61 0.36
══════ ══════ ══════ ══════
There are no instruments that are dilutive in nature and hence the basic and diluted earnings per share are same for each period.
Page 22 of 37

(RO’000)
23. Financial Instruments
Additional disclosures on non-performing financial assets and impairment coverage as per CBO circular BM 1149:
30 September 2022
(Unaudited)
Classification
Gross CBO IFRS9 Difference Net carrying IFRS9 CBO
CBO IFRS9 carrying Provisions Provisions amount Reserve Reserve
amount Interest Interest
(1) (2) (3) (4)=(2)-(3) (5)=(1)-(3)
Standard` Stage 1 2,366,083 27,374 4,612 22,762 2,361,471 - -

Stage 2 62,784 718 1,908 (1,190) 60,876 - -
Stage 3 - - - - - - -
Sub Total 2,428,867 28,092 6,520 21,572 2,422,347 - -
Special mention Stage 1 100,427 940 508 432 99,919 - -

Stage 2 236,772 8,420 28,173 (19,753) 208,599 - -
Stage 3 - - - - - - -
Sub Total 337,199 9,360 28,681 (19,321) 308,518 - -
Sub standard Stage 1 - - - - - - -

Stage 2 - - - - - - -
Stage 3 13,365 3,146 5,388 (2,242) 7,977 195 195
Sub Total 13,365 3,146 5,388 (2,242) 7,977 195 195
Doubtful Stage 1 - - - - - - -
Stage 2 - - - - - - -
Stage 3 40,155 11,761 6,886 4,875 33,269 726 726
Sub Total 40,155 11,761 6,886 4,875 33,269 726 726
Loss Stage 1 - - - - - - -
Stage 2 - - - - - - -
Stage 3 100,507 62,920 76,053 (13,133) 24,454 25,472 25,472
Sub Total 100,507 62,920 76,053 (13,133) 24,454 25,472 25,472
Gross Loans, advances
and Islamic financings
(net)
Stage 1 2,466,510 28,314 5,120 23,194 2,461,390 - -
Stage 2 299,556 9,138 30,081 (20,943) 269,475 - -
Stage 3 154,027 77,827 88,327 (10,500) 65,700 26,393 26,393
Sub Total 2,920,093 115,279 123,528 (8,249) 2,796,565 26,393 26,393
*Due from banks, Stage 1 1,917,750 2 1,639 (1,637) 1,916,111 - -

Investment securities, Stage 2 45,971 - 1,166 (1,166) 44,805 - -
Loan commitments & Stage 3 2,887 - 1,414 (1,414) 1,473 - -
Financial guarantees
Sub total 1,966,608 2 4,219 (4,217) 1,962,389 - -
Stage 1 4,384,260 28,316 6,759 21,557 4,377,501 - -

Stage 2 345,527 9,138 31,247 (22,109) 314,280 - -
Stage 3 156,914 77,827 89,741 (11,914) 67,173 26,393 26,393
Total 4,886,701 115,281 127,747 (12,466) 4,758,954 26,393 26,393
*Other items not covered under CBO circular BM 977 and related instructions
Page 23 of 37

(RO’000)
23. Financial Instruments (continued)
31 December 2021
(Audited)
Classification:
CBO IFRS 9 Gross Net carrying IFRS9 CBO

Carrying CBO IFRS9 amount Reserve Reserve
amount Provision Provisions Difference interest interest
RO’000 RO’000 RO’000 RO’000 RO’000 RO’000 RO’000
(1) (2) (3) (4)=(2)-(3) (5)=(1)-(3)
Standard Stage 1 2,176,534 31,065 4,832 26,233 2,171,702 - -

Stage 2 64,740 928 2,699 (1,771) 62,041 - -
Stage 3 - - - - - - -
Sub Total 2,241,274 31,993 7,531 24,462 2,233,743 - -

Stage 2 283,824 7,065 31,424 (24,359) 252,400 - -
Stage 3 - - - - - - -
Sub Total 360,198 7,909 31,798 (23,889) 328,400 - -

Stage 2 - - - - - - -
Stage 3 4,856 1,247 1,626 (379) 3,230 109 109
Sub Total 4,856 1,247 1,626 (379) 3,230 109 109
Stage 2 - - - - - - -
Stage 3 23,559 11,406 11,045 361 12,514 1,744 1,744
Sub Total 23,559 11,406 11,045 361 12,514 1,744 1,744
Loss Stage 1 - - - - - - -
Stage 2 - - - - - - -
Stage 3 119,576 72,766 85,255 (12,489) 34,321 23,289 23,289
Sub Total 119,576 72,766 85,255 (12,489) 34,321 23,289 23,289
Gross Loans, advances
and Islamic financings
(net)
Stage 1 2,252,908 31,909 5,206 26,703 2,247,702 - -
Stage 2 348,564 7,993 34,123 (26,130) 314,441 - -
Stage 3 147,991 85,419 97,926 (12,507) 50,065 25,142 25,142
Sub Total 2,749,463 125,321 137,255 (11,934) 2,612,208 25,142 25,142
Stage 1 2,032,190 3 3,587 (3,584) 2,028,603 - -

*Due from banks, Stage 2 65,848 - 1,558 (1,558) 64,290 - -
Loan commitments &
Sub Total 2,100,812 3 6,573 (6,570) 2,094,239 - -
Stage 1 4,285,098 31,912 8,793 23,119 4,276,305 - -

Stage 2 414,412 7,993 35,681 (27,688) 378,731 - -
Stage 3 150,765 85,419 99,354 (13,935) 51,411 25,142 25,142
Total 4,850,275 125,324 143,828 (18,504) 4,706,447 25,142 25,142
Page 24 of 37

(RO’000)
30 September 2021
(Unaudited)
IFRS9 Gross CBO IFRS9 Difference Net carrying IFRS9 CBO

CBO Classification carrying Provisions Provisions amount Reserve Reserve
amount Interest Interest
RO’000 RO’000 RO’000 RO’000 RO’000 RO’000 RO’000
(1) (2) (3) (4)=(2)-(3) (5)=(1)-(3)
Standard` Stage 1 2,121,282 26,458 5,149 21,309 2,116,133 - -

Stage 2 55,684 700 3,615 (2,915) 52,069 - -
Stage 3 - - - - - - -
Sub Total 2,176,966 27,158 8,764 18,394 2,168,202 - -

Stage 2 285,487 10,224 40,691 (30,467) 244,796 - -
Stage 3 - - - - - - -
Sub Total 360,303 11,003 41,130 (30,127) 319,173 - -

Stage 2 - - - - - - -
Stage 3 6,253 2,182 1,976 206 4,277 56 56
Sub Total 6,253 2,182 1,976 206 4,277 56 56
Stage 2 - - - - - - -
Stage 3 36,675 11,354 10,269 1,085 26,406 1,272 1,272
Sub Total 36,675 11,354 10,269 1,085 26,406 1,272 1,272
Loss Stage 1 - - - - - - -
Stage 2 - - - - - - -
Stage 3 124,950 83,857 106,297 (22,440) 18,653 29,244 29,244
Sub Total 124,950 83,857 106,297 (22,440) 18,653 29,244 29,244
Gross Loans, advances and
Islamic financings (net)
Stage 1 2,196,098 27,237 5,588 21,649 2,190,510 - -
Stage 2 341,171 10,924 30,576 (19,652) 310,595 - -
Stage 3 167,878 97,393 118,542 (21,149) 49,336 30,572 30,572
Sub Total 2,705,147 135,554 154,706 (19,152) 2,550,441 30,572 30,572
*Due from banks, Stage 1 1,919,065 18 2,609 (2,591) 1,916,456 - -

Loan commitments & Stage 3 2,766 - 76 (76) 2,690 - -
Sub total 1,962,456 18 4,096 (4,078) 1,958,360 - -
Stage 1 4,115,163 27,255 8,197 19,058 4,106,966 - -

Stage 2 381,796 10,924 31,987 (21,063) 349,809 - -
Stage 3 170,644 97,393 118,618 (21,225) 52,026 30,572 30,572
Total 4,667,603 135,572 158,802 (23,230) 4,508,801 30,572 30,572
Page 25 of 37

(RO’000)
CBO circular BM 1149 requires excess of CBO provisions (calculated as the aggregate provision on portfolio and specific basis computed under CBO
methodology) over IFRS 9 ECL provisions computed under IFRS9 to be transferred to an impairment reserve, a non-distributable reserve ineligible for
regulatory capital , as an after tax appropriation from retained earnings. The Bank generally transfers this amount at the end of each financial year.
CBO circular BSD/CB & FLC/2022/001 suspended this requirement until 31 December 2022. Impairment reserve as at 30 September 2022 is RO 5.46
million (31 December 2021: RO 5.46 million 30 September 2021: RO 5.46 million).
30 September 2022 CBO IFRS 9 Difference

(Unaudited) RO’000 RO’000 RO’000
Loan impairment charges and other credit risk provisions (net) 30,007 23,907 (6,100)
Total ECL provision and contractual interest/profit not recognised 141,674 127,747 (13,927)
Gross NPL ratio 5.27% 5.27% -

Net NPL ratio 1.79% 2.35% 0.56%
(NPL ratio denominator is funded non-performing loans, advances and Islamic financings)
Comparison of ECL provision under IFRS 9 and extant CBO norms:
CBO IFRS 9
Gross loans advances and Islamic financings 115,279 97,135
Due from Banks 2 26
Investment securities (amortised cost) - 441
Investment securities (FVOCI) - 438
Loan commitments and financial guarantees - 3,314
─────── ───────
Total ECL provision 115,281 101,354
Contractual interest/profit not recognised 26,393 26,393
─────── ───────
Total ECL provision and contractual interest/profit not recognised 141,674 127,747
═══════ ═══════
Analysis of changes in the IFRS 9 ECL provision on Due from banks, Loans, advances and Islamic financings (net) (excluding contractual
interest/profit not recognised), Investment securities and Loan commitments and financial guarantees
30 September 2022
(unaudited)
At 1 January 8,793 35,681 74,212 118,686

Loans transferred to memorandum portfolio - - (38,164) (38,164)
Loans transferred from memorandum portfolio - - 325 325
Transfers to Stage 1 914 (580) (334) -
Transfers to Stage 2 (145) 319 (173) -
────── ────── ────── ──────
Total ECL provision 6,759 31,247 63,348 101,354
══════ ══════ ══════ ══════
Page 26 of 37

(RO’000)
Restructured loans
Loans with renegotiated terms are defined as loans that have been restructured due to deterioration in the borrower’s financial position, for which the Bank
has made concessions by agreeing to terms and conditions that are more favourable for the borrower than the Bank had provided initially and that it would
not otherwise consider. A loan continues to be presented as part of loans with renegotiated terms until maturity, early repayment or write-off. For
restructured loans, there is no reserve interest under IFRS9 and CBO classification.
Gross Net carrying

IFRS 9 Carrying CBO IFRS9 Difference amount
Classification: amount Provision Provisions RO’000 RO’000
RO’000 RO’000 RO’000
CBO
(1) (2) (3) (4)=(2)-(3) (5)=(1)-(3)
Stage 1 101,246 965 537 428 100,709
Classified as performing Stage 2 143,984 5,228 6,916 (1,688) 137,068
Stage 3 - - - - -
Sub Total 245,230 6,193 7,453 (1,260) 237,777
Stage 1 - - - - -
Classified as non-performing Stage 2 - - - - -
Stage 3 - - - - -
Sub Total - - - - -
Stage 1 101,246 965 537 428 100,709
Stage 2 143,984 5,228 6,916 (1,688) 137,068
Stage 3 - - - - -
Total 245,230 6,193 7,453 (1,260) 237,777
31 December 2021 (Audited)
Classification: Gross Carrying Net carrying
amount CBO Provision IFRS9 Difference amount
CBO RO’000 RO’000 Provisions RO’000 RO’000
IFRS 9 RO’000
(1) (2) (3) (4)=(2)-(3) (5)=(1)-(3)
Stage 1 75,445 727 371 356 75,074
Classified as performing Stage 2 193,791 5,485 15,379 (9,894) 178,412
Stage 3 - - - - -
Sub Total 269,236 6,212 15,750 (9,538) 253,486
Classified as non- performing Stage 1 - - - - -
Stage 2 - - - - -
Stage 3 - - - - -
Sub Total - - - - -
Total Stage 1 75,445 727 371 356 75,074
Stage 2 193,791 5,485 15,379 (9,894) 178,412
Stage 3 - - - - -
269,236 6,212 15,750 (9,538) 253,486
30 September 2021 (Unaudited)
Classification: Gross Carrying Net carrying
amount CBO Provision IFRS9 Provisions Difference amount
CBO IFRS 9 RO’000 RO’000 RO’000 RO’000 RO’000
(1) (2) (3) (4)=(2)-(3) (5)=(1)-(3)
Stage 1 74,118 721 441 280 73,677
Classified as performing 207,198 7,118 32,509 (25,391) 174,689
Stage 2
Stage 3 - - - - -
Sub Total 281,316 7,839 32,950 (25,111) 248,366
Stage 1 - - - - -
Classified as non-performing
Stage 2 - - - - -
Stage 3 - - - - -
Sub Total - - - - -
Stage 1 74,118 721 441 280 73,677
Stage 2 207,198 7,118 32,509 (25,391) 174,689
Stage 3 - - - - -
Total 281,316 7,839 32,950 (25,111) 248,366
Page 27 of 37

(RO’000)
24. Related party transactions

In the ordinary course of business, the Bank enters into transactions with certain of its directors, shareholders, senior management, Shari’a
supervisory board, Shari’a reviewer and companies in which they have a significant interest. These transactions are conducted on an arm’s length
basis and are approved by the Bank’s management and Board of Directors.
Aggregate amount of balances and the income and expenses generated with such related parties:

2022 2021 2021
Directors & senior management
Loans, advances and Islamic financings at end of period 3,339 3,505 3,207
Disbursed during the period 528 1,811 1,365
Repaid during the period (315) (394) (282)
Deposits at end of period 1,056 1,671 1,557

Received during the period 987 1,299 990
Matured/paid during the period (1,285) (1,992) (1,482)
Interest income during the period 104 120 77

Interest expense during the period 10 22 (17)
Directors sitting fees and remuneration 604 198 182
Shari’a Supervisory Board members sitting fees and remuneration 27 55 41
Other related parties

Loans, advances and Islamic financings at end of period 87,674 71,947 71,416
Disbursed during the period 27,398 34,911 30,569
Repaid during the period (835) (3,486) (1,803)
Deposits at end of period 7,669 14,895 9,976

Received during the period 2,466 6,726 6,428
Matured/paid during the period (8,597) (5,310) (9,799)
Interest income during the period 3,095 3,856 2,894

Interest expense during the period 185 247 (182)
Other fee income 3,303 117 83
Key management compensation:
Key management comprises of 7 (2021:7) senior management executives. The Bank considers these members to be key management
personnel for the purpose of IAS 24 Related Party Disclosures.
In the ordinary course of business, the Bank conducts transactions with certain of its key management personnel and companies in which they
have a significant interest. The balances in respect of these related parties as at the reporting date are as follows:
2022 2021 2021
Key management personnel (Unaudited) (Audited) (Unaudited)
Loans, advances and Islamic financings at end of 1,428 1,499 1,068

period
Deposits at end of the period 241 303 289
Interest expense during the period 1 1 1
Salaries and other short term benefits 1,176 1,914 1,141
Post-employment benefits 32 34 22
Page 28 of 37

(RO’000)
24. Related party transactions (continued)
Aggregate amount of balances and the income and expenses generated with shareholders holding 10% or more of the Bank’s
shares:

2022 2021 2021
Loans, advances and Islamic financing at end of period 7,648 7,896 7,378
Disbursed during the period 7,452 7,728 6,899
Repaid during the period - (311) -
Deposits at end of period 61 52 213

Received during the period 10 1 149
Matured/paid during the period - (90) (77)

Interest expense during the period 3 1 1
As at 30 September 2022, no loans to related parties are classified under stage 3 (31 December 2021: nil, 30 September 2021; nil)
25. Fair value of financial instruments
Fair value (FV) is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
In the accessible principal market for the asset or liability; or

In the absence of a principal market, in the most advantageous accessible market for the asset or liability.
The Bank uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices in active markets for the same instrument without modification or repacking;
Level 2: quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all significant
Inputs are based on observable market data; and
Level 3: valuation techniques for which any significant input is not based on observable market data.
The Bank considers that the fair value of financial instruments was not significantly different to their carrying value (including accrued
interest) at each of those dates. The table below sets out the classification and fair value of each class of financial assets and liabilities
including accrued interest.
Page 29 of 37

(RO’000)
25. Fair value of financial instruments (continued)
At 30 September 2022 Amortised Total carrying

(Unaudited) cost FVOCI FVTPL /fair value
Assets
Cash and balances with Central Bank 83,751 - - 83,751

Due from banks 281,099 - - 281,099
Investment securities 358,980 420,541 95,386 874,907
Loans, advances and Islamic financings (net) 2,796,565 - - 2,796,565
Other assets (excluding prepayments ) 157,888 - 1,453 159,341
───── ───── ───── ─────
3,678,283 420,541 96,839 4,195,663
═════ ═════ ═════ ═════
Liabilities
- -
738,869 738,869
Due to banks
Customer deposits 2,625,978 - - 2,625,978
Other liabilities (excluding other accruals & provisions) 161,767 - - 161,767
Subordinated loans 35,654 - - 35,654
───── ───── ───── ─────
3,562,268 - - 3,562,268
═════ ═════ ═════ ═════
Total
Amortised carrying /fair
At 31 December 2021 cost FVOCI FVTPL value
(Audited)
Assets

Due from banks 172,959 - 172,959
Investment securities 343,688 594,217 94,099 1,032,004
Loans, advances and Islamic financings (net) 2,612,208 - - 2,612,208
Other assets (excluding prepayments) 162,454 - 4,278 166,732
───── ───── ───── ─────
3,387,182 594,217 98,377 4,079,776
═════ ═════ ═════ ═════
Liabilities
Due to banks 918,863 - - 918,863

───── ───── ───── ─────
3,513,227 - - 3,513,227
═════ ═════ ═════ ═════
Page 30 of 37

(RO’000)
25. Fair value of financial instruments (continued)
At 30 September 2021 Amortised Total carrying

(Unaudited) cost FVOCI FVTPL /fair value
Assets
Due from banks 198,581 - - 198,581
Investment securities 2,550,441 - - 2,550,441
Loans, advances and Islamic financings (net) 337,114 604,909 94,837 1,036,860
Other assets (excluding prepayments and derivatives) 99,326 - 4,502 103,828
───── ───── ───── ─────
3,265,547 604,909 99,339 3,969,795
═════ ═════ ═════ ═════
Liabilities
Due to banks 1,039,013 - - 1,039,013

───── ───── ───── ─────
3,401,763 - - 3,401,763
═════ ═════ ═════ ═════
Analysis of financial instruments measured at fair value at the end of the reporting period:
30 September 2022 Positive FV of Negative FV of

(Unaudited) Investment securities Derivatives derivatives Total
Level 1 4,945 - - 4,945

Level 2 507,806 1,453 (16) 509,243
Level 3 3,176 - - 3,176
───── ───── ───── ─────
515,927 1,453 (16) 517,364
═════ ═════ ═════ ═════
31 December 2021 Positive FV of Negative FV of

(Audited) Investments securities Derivatives derivatives Total
Level 1 5,084 - - 5,084

Level 2 680,056 4,278 (79) 684,255
Level 3 3,176 - - 3,176
───── ───── ───── ─────
688,316 4,278 (79) 692,515
═════ ═════ ═════ ═════
30 September 2021 Positive FV of Negative FV of

(Unaudited) Investment securities Derivatives derivatives Total
Level 1 5,270 - - 5,270

Level 2 691,300 4,502 (283) 695,518
Level 3 3,176 - -
───── ───── ───── ─────
699,746 4,502 (283) 703,964
═════ ═════ ═════ ═════
Page 31 of 37

(RO’000)
26. Derivatives
The table below sets out the positive and negative fair values of derivative financial instruments, together with their notional amounts, analysed
by term to maturity. The notional amounts, which provide an indication of the volumes of the transactions outstanding at the end of the period,
do not necessarily reflect the amounts of future cash flows involved. These notional amounts, therefore, are neither indicative of the Bank’s
exposure to credit risk, which is generally limited to the positive fair value of the derivatives, nor to market risk.
Notional amounts by term to maturity

As at 30 September 2022 Positive FV Negative FV Notional Within 3 More than
(Unaudited) amount months 3 - 12 months 1 year
Forward foreign exchange purchase contracts 50 16 496,296 438,472 57,824 -

═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Forward foreign exchange sale contracts 1,403 - 502,105 444,338 57,767
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Notional amounts by term to maturity

As at 31 December 2021 Positive FV Negative FV Notional Within 3 More than
(Audited) amount months 3 - 12 months 1 year
Forward foreign exchange purchase contracts 20 68 882,431 743,102 139,329 -

═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Forward foreign exchange sale contracts 4,258 11 880,234 744,165 136,069 -

═══════ ═══════ ═══════ ═══════ ═══════ ═══════
As at 30 September 2021 Positive FV Negative FV Notional Notional amounts by term to maturity

(Unaudited) amount
Within 3 More than
months 3 - 12 months 1 year
Forward foreign exchange purchase contracts 74 195 909,353 538,499 311,870 58,984
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Forward foreign exchange sale contracts 4,428 88 911,003 542,982 310,132 57,889
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Interest rate swaps 427 428 106,187 - - 106,187
═══════ ═══════ ═══════ ═══════ ═══════ ═══════
Page 32 of 37
────────────────────────────────────────────────────────────────────
(RO’000)
27. Exposure to liquidity risk
The Bank also monitors the liquidity through Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR) and Leverage
Ratio. Current levels of these ratios are given below:
30 September 2022 31 December 2021 30 September 2021

LCR 185.0% 271.6% 297.1%

LCR (average for the quarter) 186.2% 196.6% 202.7%
NSFR 112.6% 113.2% 112.5%
Leverage ratio 14.3% 13.7% 13.6%
The LCR and NSFR is calculated in accordance with Basel III framework and guidelines adopted by CBO vide circular BM 1127 and
BM 1147. The complete disclosures required under these circulars are available on the Investor Relations page of the Bank’s website.
The table below summarises the maturity profile of the Bank’s liabilities as on the reporting date based on contractual repayment
arrangements. The contractual maturities of liabilities have been determined on the basis of the remaining period at the statement of
financial position date to the contractual maturity date and do not take account of the effective maturities as indicated by the Bank’s
deposit retention history and the availability of liquid funds.
Gross
30 September 2022 Carrying nominal Within 3 3 - 12
(Unaudited) amount outflow months months Over 1 year
Non – derivative liabilities

Due to banks 738,869 739,005 50,230 334,556 354,219
Customer deposits 2,625,978 2,694,460 1,714,491 437,976 541,993
Other liabilities 189,309 189,309 189,309 - -
Subordinated loans 35,654 37,369 880 36,489 -
────── ────── ────── ────── ──────
Total 3,589,810 3,660,143 1,954,910 809,021 896,212
══════ ══════ ══════ ══════ ══════
31 December 2021 Carrying Gross nominal Within 3 3 - 12

(Audited) amount outflow months months Over 1 year
Due to banks 918,863 1,023,051 468,507 2,752 551,792
Subordinated loans 35,392 38,668 325 1,956 36,387
────── ────── ────── ────── ──────
Total 3,537,407 3,719,217 2,080,380 579,491 1,059,346
══════ ══════ ══════ ══════ ══════
30 September 2021 Carrying Gross nominal Within 3 3 - 12

(Unaudited) amount outflow months months Over 1 year
Due to banks 1,039,013 1,278,245 577,962 170,864 505,569
Subordinated loans 35,654 41,389 349 2,101 38,939
────── ────── ────── ────── ──────
Total 3,431,006 3,751,826 2,038,310 653,206 1,036,460
══════ ══════ ══════ ══════ ══════
Page 33 of 37

(RO’000)
28. Capital management
The international standard for measuring capital adequacy is the risk asset ratio, which relates capital to balance sheet assets and off
balance sheet exposures weighted according to broad categories of risk. The risk asset ratio calculated in accordance with the capital
adequacy guidelines of the Bank for International Settlement is as follows:
30 September 2022 31 December 2021 30 September 2021

CET 1 capital
Ordinary share capital 455,355 295,355 295,355
Share premium 18,038 18,038 18,038
Legal reserve 34,389 34,389 31,481
General reserve 988 988 988
Subordinated loan reserve 28,000 28,000 21,000
Retained earnings (11,441) 4,565 (1,920)
Fair value losses (517) (2,181) (2,219)
────── ────── ──────
Total CET 1 capital 524,812 379,154 362,723
Additional Tier 1 capital

Perpetual Tier 1 Capital Securities 100,000 200,000 200,000
────── ────── ──────
Total Tier 1 capital 624,812 579,154 562,723
────── ────── ──────
Tier 2 capital
Impairment provision on portfolio basis 6,733 17,537 17,833
Fair value gains 10 - -
Subordinated loan - 7,000 14,000
────── ────── ──────
Total Tier 2 capital 6,743 24,537 31,833
────── ────── ──────
Total regulatory capital 631,555 603,691 594,556
══════ ══════ ══════
Risk weighted assets
Credit and market risks 3,104,872 2,967,799 2,890,674
Operational risk 199,723 199,723 191,888
────── ────── ──────
Total risk weighted assets 3,304,595 3,167,522 3,082,562
══════ ══════ ══════
Capital adequacy ratio
Total regulatory capital expressed as a percentage of
19.11% 19.06 % 19.29%
total risk weighted assets
Total tier I capital expressed as a percentage of total
18.91% 18.28 % 18.26%
risk weighted assets
Total CET 1 capital expressed as a percentage of total
15.88% 11.97 % 11.77%
risk weighted assets
The capital adequacy ratio is calculated in accordance with Basel II & Basel III requirements as adopted by CBO. Disclosures required
under Basel III and circular BM-1114 dated 17 November 2013 issued by CBO are available on the Investor Relations page of the
Bank’s website.
Total CET 1 capital excludes impairment reserve, interim profits for the period and an adjustment to fair value for unrealised gains.
Proposed dividends (if any) are deducted from retained earnings.
Page 34 of 37

(RO’000)
29. Fiduciary activities
The Bank’s fiduciary activities consist of portfolio and investment management and custodial services. The aggregated assets under
management, which are not included in the Bank’s statement of financial position as at 30 September 2022 is RO 294 million (31 December
2021: RO 229 million, 30 September 2021: RO 213 million).
30. Comparative figures
Certain comparative figures have been reclassified in order to conform to the presentation for the current period. Such
reclassifications do not affect previously reported net profit or shareholders’ equity.
31. Segmental information
Segmental information is presented for the Bank’s operating segments. For management purposes the Bank is organised into the
following operating segments:
Retail banking:
Including loans to and deposits from retail customers, credit card and fund transfer facilities.
Wholesale banking:
Corporates including loans to and deposits from large and mid-sector corporates, small & medium enterprises and trade finance
customers.
Government and project finance syndication including loans to and deposits from government and financial institutions, project
finance and syndicated loans.
Investments including proprietary investments, correspondent and investment banking.
Treasury including money market instruments, derivatives and foreign exchange products
Islamic banking
Including Islamic financing activities, current accounts, unrestricted investment accounts and other products and services to
corporate and individual customers under Shari’a principles.
Head office
Includes balance sheet, income and expense related items that are not directly related to the Bank’s operating segments
The CEO monitors the operating results of business units separately for making decisions about resource allocation and performance
assessment.
Transfer pricing between operating segments is on an arm’s length basis in a manner similar to transactions with third parties.
No revenue from transactions with a single external counterparty or customer amounted to 10% or more of the Bank’s total revenue in
2022 or 2021.
Page 35 of 37

(RO’000)
31.1 Segmental information (continued)
Retail Wholesale Islamic Head

banking banking banking Office Total
PROFIT FOR THE PERIOD
Net interest income 17,389 51,825 - - 69,214

Net income from Islamic financing and - - 6,784 - 6,784
investing activities
Other operating income 6,257 13,227 1,183 - 20,667
───── ───── ───── ───── ─────
Total operating income 23,646 65,052 7,967 - 96,665
Total operating expenses (17,294) (18,810) (3,634) - (39,738)
───── ───── ───── ───── ─────
Net operating income before impairment 6,352 46,242 4,333 - 56,927
provisions
Loan impairment charges and other credit risk (763) (23,103) (41) - (23,907)
provisions (net)
───── ───── ───── ───── ─────
Profit before tax 5,589 23,139 4,292 - 33,020
Income tax expense (895) (3,395) (644) - (4,934)
═════ ═════ ═════ ═════ ═════
Profit for the period 4,694 19,744 3,648 - 28,086
═════ ═════ ═════ ═════ ═════
Retail Wholesale Islamic Head Total

banking banking banking Office
FINANCIAL POSITION
Assets
Cash and balances with Central Bank - 50,965 32,786 - 83,751
Due from banks - 228,009 53,090 - 281,099
Investment securities - 845,086 29,821 - 874,907
Loans, advances and Islamic financings (net) 781,661 1,632,707 382,197 - 2,796,565
Other assets - 135,856 1,802 23,759 161,417
Investment properties - - - 2,900 2,900
Property and equipment - - 682 46,874 47,556
───── ───── ───── ───── ─────
Total Assets 781,661 2,892,623 500,378 73,533 4,248,195
═════ ═════ ═════ ═════ ═════
Liabilities
Due to banks - 690,248 48,621 - 738,869

Customer deposits 840,127 1,380,754 405,097 - 2,625,978
Other liabilities - 134,463 3,020 51,826 189,309
Subordinated loans - - - 35,654 35,654
───── ───── ───── ───── ─────
Total Liabilities 840,127 2,205,465 456,738 87,480 3,589,810
Internal funding (net) (58,466) 687,158 (628,692) -
Total Equity - - 43,640 614,745 658,385

───── ───── ───── ───── ─────
Total Liabilities & Equity 781,661 2,892,623 500,378 73,533 4,248,195
═════ ═════ ═════ ═════ ═════
Page 36 of 37

(RO’000)
31.1 Segmental information (continued)

PROFIT FOR THE PERIOD
Net interest income 13,670 42,161 - - 55,831

Net income from Islamic financing and - - 6,109 - 6,109
investing activities
Other operating income 5,374 14,315 541 - 20,230
───── ───── ───── ───── ─────
Total operating income 19,044 56,476 6,650 - 82,170
Total operating expenses (14,817) (17,073) (3,612) - (35,502)
───── ───── ───── ───── ─────
Net operating income before impairment 4,227 39,403 3,038 - 46,668
provisions
Loan impairment charges and other credit risk (1,313) (16,878) (462) - (18,653)
provisions (net)
───── ───── ───── ───── ─────
Profit before tax 2,915 22,525 2,576 - 28,015
Income tax expense (481) (3,375) (361) - (4,217)
═════ ═════ ═════ ═════ ═════
Profit for the period 2,433 19,150 2,215 - 23,798
═════ ═════ ═════ ═════ ═════

FINANCIAL POSITION
Assets
Cash and balances with Central Bank - 51,153 28,932 - 80,085
Due from banks - 182,263 16,318 - 198,581
Investment securities - 1,008,050 28,810 - 1,036,860
Loans, advances and Islamic financings (net) 764,310 1,495,116 291,015 - 2,550,441
Other assets - 81,645 736 24,500 106,881
Investment properties - - - 2,900 2,900
Property, equipment and fixtures - - 734 46,509 47,243
───── ───── ───── ───── ─────
Total Assets 764,310 2,818,227 366,545 73,909 4,022,991
═════ ═════ ═════ ═════ ═════
Liabilities
Due to banks - 984,726 54,287 - 1,039,013

Customer deposits 518,769 1,435,482 274,508 - 2,228,759
Other liabilities - 77,426 1,761 48,393 127,580
Subordinated loans - - - 35,654 35,654
───── ───── ───── ───── ─────
Total Liabilities 518,769 2,497,634 330,556 84,047 3,431,006
Internal funding (net) 245,541 320,593 (566,134) -
Total Equity - - 35,989 555,996 591,985

───── ───── ───── ───── ─────
Total Liabilities & Equity 764,310 2,818,227 366,545 73,909 4,022,991
═════ ═════ ═════ ═════ ═════
Page 37 of 37

Sohar International Bank Saog: Interim Condensed Financial Statements For The Nine Months Ended 30 September 2022

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Sohar International Bank Saog: Interim Condensed Financial Statements For The Nine Months Ended 30 September 2022

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SOHAR INTERNATIONAL BANK SAOG

INTERIM CONDENSED FINANCIAL STATEMENTS

INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME

Nine months ended Three months ended

30 September 30 September 30 September 30 September

OTHER COMPREHENSIVE INCOME / (EXPENSE)

Items that will not be reclassified to profit and loss

Items to be reclassified subsequently to profit and loss

INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY

INTERIM CONDENSED STATEMENT OF CASH FLOWS

1. Legal status and principal activities

2.1 Statement of compliance

2.2 Basis of measurement

derivative financial instruments are measured at fair value;

2.3 Functional and presentation currency

2.4 Use of estimates and judgements

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

3. Application of new and revised International Financial Reporting Standards (IFRS)

3.a Interest rate benchmark reforms

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

3.b Covid-19 and Expected Credit Loss (ECL)

ECL provisions and management overlays during the pandemic:

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

5. Cash and balances with Central Bank

30 September 31 December 30 September

Cash 31,525 34,551 36,339

6. Due from banks

Less: ECL provision (26) (1) (3)

30 September 2022 30 September2021

Stage 1 Stage 2 Stage 3 Total Total

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

6. Due from banks (continued)

Stage 1 Stage 2 Stage 3 Total Total

7. Loans, advances and Islamic financings (net)

30 September 31 December 30 September

Corporate 1,965,006 1,833,296 1,777,127

Less: ECL provision (97,135) (112,113) (124,134)

Loans, advances and Islamic financings (net) comprise:

Loans 2,687,914 2,525,822 2,455,279

Less: ECL provision (97,135) (112,113) (124,134)

═══════ ═══════ ═══════

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

7. Loans, advances and Islamic financings (net) (continued)

Stage 1 Stage 2 Stage 3 Total

At 1 January 2,252,908 348,564 147,991 2,749,463

Stage 1 Stage 2 Stage 3 Total

At 1 January 5,206 34,123 72,784 112,113

Net impairment charge / (release) Stage 1 Stage 2 Stage 3 Total

Impairment charge 1,342 2,067 34,528 37,937

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

7. Loans, advances and Islamic financings (net) (continued)

Stage 1 Stage 2 Stage 3 Total

Net impairment charge / (release) Stage 1 Stage 2 Stage 3 Total

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

30 September 31 December 30 September

Held at FVOCI 4,945 5,084 5,946

Held at FVTPL 95,386 94,774 94,837

Held at FVOCI 416,034 589,255 599,858