Tageer Finance: Improved performance
Published: 23/08/2017 12:00 pm
Taageer Finance improved its position by one slot to achieve the fourth rank in this year's BusinessToday-EY survey. The company has secured 179 points in this year's survey compare to l65 points in the previous year.
The company scored maximum points in growth in loans parameter and that helped it to improve its position. At the same time, it didn't perform very well in some segments such as net profit per employee, efficiency and interest spread and that capped the gain in the survey. In 2016, the company reported a 1.2 per cent growth in its net profit at RO4.74mn compared to RO4.42mn in the previous year. During the year under consideration, its non-performing loan (NPL) grew to RO8.6mn compare to RO8.15mn in the previous year. However, NPL in terms of percentage of overall loans stood at 5.36 per cent in 2016, which was third from the bottom in the industry.
Recently there was an announcement about the merger of National Finance and Oman Orix Leasing. As one of the most experienced persons in the sector, do you think that this trend will continue in the near future also?
Mergers happen for different reasons and under various economic conditions. Globally and regionally mergers of companies/entities take place when the shareholders see very attractive business case with value addition for them within their industry for consolidation. Oman has indeed experienced mergers, particularly, within the banking industry over the past several years. However, there has not been any merger/consolidation within the non banking & finance companies over the past two decades. The current proposal for merger amongst two companies within the NBFC sector would be the first one. It's difficult to say whether the trend would continue amongst companies within the sector to merge, it all depends on the strategy of each company and the shareholders' long term vision on NBFCs' future role and contribution to the country's economy and sustainable returns for the investors.
Industry captains in the country's financial segment often complain that there not enough avenues available for them to invest. Do you agree with this?
It all depends on what kind of returns they are looking for their investments. Oman's banking and NBFC sectors has been giving fantastic returns on its paid in capital and their performance has been one of the best in the region – thanks to our regulators for their policies and the guidance.
There is a nervousness in the market due to prolonged softening of crude oil prices that is hampering the economic growth in the country. What are your views on this?
I do agree that there is a nervousness in the market which is quite understandable due sharp decline in global oil prices. The government has already taken some bold initiatives to address the budget deficit. Oman's budget for the year 2017 is tackling the falling oil prices with a sustainable plan to put the country on the right path and direction. These are tough times for the entire MENA region and we need to face the challenges. In my opinion, Omani authorities are doing every thing possible to address the challenges. There are good opportunities for Oman to move forward. It should face challenges of raising large investment for infrastructure projects and create jobs for its growing young population. Private sector can play a very important role in attracting long term infrastructure investment opportunities at amuch faster pace to support the government's initiatives during these critical times for mutual benefits.