Omani banks have announced their proposed dividend distribution for 2018 this morning. The recommended dividends are pending the approval of the Central Bank of Oman and the banks’ AGM.
 
Bank Muscat’s 2018 proposed DPS was slightly above EFGe: Bank Muscat’s Board of Directors has recommended a DPS of OMR0.030 in 2018, flat Y-o-Y and marginally above our forecast of OMR0.028. The cash dividend implies a 7.3% dividend yield and a payout ratio of 51% in 2018 (up from 47% in 2017 and above our forecast of 47%). The BoD has also recommended a 5% stock dividend distribution, in line with stock dividend distribution in 2014-17.
 
NBO’s 2018 DPS surprises positively: National Bank of Oman’s Board of Directors has proposed a DPS of OMR0.016 in 2018, up from OMR0.015 in 2017 and exceeding our forecast of OMR0.012. The proposed DPS implies a 8.7% dividend yield and a payout ratio of 51% in 2018 (down from 66% in 2017, but above our estimate of 49%). The BoD did not recommend any stock dividend distribution. 
 
Bank Dhofar’s 2018 proposed DPS down Y-o-Y: Bank Dhofar’s Board of Directors has recommended the distribution of a cash dividend of OMR0.010 in 2018, down from OMR0.012 in 2017, but slightly above our forecast of OMR0.008. The proposed DPS implies a 6.3% dividend yield and a payout ratio of 66% in 2018 (broadly unchanged Y-o-Y, but well above EFGe of 42%). The BoD has also recommended a 7% stock dividend distribution. 

Rajae Aadel

  
Bank Muscat: OMR0.41 as of 29 Jan 2019, Rating: Buy, TP: OMR0.51/share, MCap: USD3,180mn, BKMB OM/BKMB.OM
Bank Dhofar: OMR0.16 as of 29 Jan 2019, Rating: Sell, TP: OMR0.14/share, MCap: USD1,164mn, BKDB OM/BKDB.OM
National Bank Of Oman: OMR0.18 as of 29 Jan 2019, Rating: Neutral, TP: OMR0.19/share, MCap: USD783mn, NBOB OM/NBOB.OM