Oman’s Bank Muscat Hit By $39m Prepaid Card Fraud
The lender said 12 prepaid travel cards were compromised outside of Oman.
Bank Muscat, Oman’s largest lender, will take an impairment charge of up to OMR15 million ($39 million) after a small number of prepaid travel cards were hit by fraud, the bank said on Tuesday.
The bank said its board met on Monday after 12 prepaid travel cards were compromised outside of Oman. The cards allow users to carry currencies abroad rather than using their debit or credit cards in foreign countries, which can be expensive.
No other customers have been affected by the fraud.
“We are exploring all avenues to minimise the impact on our shareholders and will pursue the various options available to the bank,” Bank Muscat said, adding it would update the market when more information was available.
Shares in Bank Muscat recovered somewhat on Tuesday, trading up 2.1 per cent at 0625 GMT, having slumped 4.3 per cent on Monday, the largest one-day fall in the stock since July 2011.
The impairment, which was a result of unspecified electronic fraud, represented 10.5 per cent of Bank Muscat’s estimated 2013 earnings, United Securities said in a note.
However, even taking the impairment into account, the stock was “still underpriced as compared to its domestic and regional peers,” trading at around 1.1-times book value, the note added.
Bank Muscat posted a 18.5 per cent increase in 2012 net profit last month, fuelled by a 16.2 per cent growth in lending.
The bank expects lending growth to be around 14-15 per cent this year, driven by high government spending and higher wages for local citizens, its chief operating officer was quoted by local media as saying earlier this month.