BMI 31 July 2006...  Manama. 26th July, 2006: BankMuscat International (BMI) today announced its plan to acquire 40% in National Finance Company (NFC), a leading finance company in Oman. NFC, one of the oldest leasing finance company in Oman, provides asset based financing to small and medium enterprises (SMEs) and individual customers.

Announcing the new strategic venture, Abbas Al Derazi, Acting General Manager of BMI said:

"BMI was set up with a vision to become a dynamic regional bank. The investment in National Finance Company (NFC) will be the first expansion outside Bahrain for BMI, and is an important milestone in achieving our strategic objectives. This strategic partnership will enable NFC to consolidate its position in Oman, as well tap new markets in the region.”

Through this stake, BMI will gain management control of the venture. NFC has strong relationships with local customers, especially in the automobile and small and medium enterprise (SME) segments. BMI, whose 49 per cent stake is held by BankMuscat (SAOG), will invest BD 8.7 million (USD 23.2 million) to become a strategic stakeholder of National Finance Company.

“BMI will be acquiring 40 per cent stake in the company, through the private placement route. The transaction will involve issue of fresh capital, which will increase the paid up capital of NFC from RO 7.2 million (USD 18.7 million) to RO 12 million (USD 31.2 million) – making NFC a strongly capitalized finance & leasing company in Oman. Our representation on the NFC Board will be proportional to our stake.” said George Thomas, Head, International Business Expansion.

“The transaction is subject to approval from the regulatory authorities, as well a due-diligence exercise to be carried out by BMI.” he added.

BMI recently posted strong financial results announcing a net profit of USD 4.9 million (BD 1.9 million) for the first half ended 30 June 2006, an increase of 34% as compared to the corresponding period last year when the Bank recorded a net profit of USD 3.7 million (BD 1.4 million). Loans and Advances stood at USD 541 million (BD 204 million) as compared to USD 316 million (BD 119 million) at 30 June 2005. Total assets stood at USD 785 million (BD 296 million) and rose by 73% over the USD 455 million (BD 171 million) recorded at the end of June 2005. Return on Equity (ROE) stood at 15.04% while Earnings Per Share (EPS) was 0.49 cents (0.186 fils)