2025 Chairman Report

 

Dear Shareholders,

I am pleased to present to you the financial results of Oman Arab Bank SAOG (OAB) for the year 2025.

On behalf of the Board of Directors, I am pleased to present a reflection on a year defined by resilient performance and strategic transition for Oman Arab Bank. Navigating a dynamic economic landscape, we have remained steadfast in our commitment to fortifying our core operations and accelerating our digital evolution. By prioritizing customer-centric innovation and operational excellence, the Bank has successfully delivered sustained value to our shareholders and the wider Omani community. This progress is a direct result of the professionalism and unwavering dedication of our talented team, whose efforts continue to reinforce our standing as a premier financial partner within the Sultanate.

Looking ahead, we are inspired by the vast opportunities to further align our growth with Oman’s national economic ambitions. Our trajectory remains focused on investing in transformative technologies that elevate the banking experience while upholding the most thorough standards of corporate governance and risk management. We extend our profound gratitude to our shareholders for their continued trust, to the Central Bank of Oman and regulatory authorities for their indispensable guidance, and to our loyal customers for their enduring partnership. Together, we are exceptionally well-positioned to build upon these achievements and cultivate a future of shared prosperity and enduring success.

 

OPERATING ENVIRONMENT

During 2025, the Sultanate of Oman continued to demonstrate economic resilience, supported by prudent fiscal management, steady growth in non-oil sectors, and ongoing structural reforms aligned with Oman Vision 2040. Government initiatives to stimulate investment, enhance private sector participation, and advance economic diversification contributed to a stable operating environment for the banking sector. Continued focus on infrastructure development, renewable energy, logistics, and digital transformation, creating opportunities across corporate, SME, and retail segments. Within this context, the banking sector remained well-capitalized and resilient, enabling financial institutions to support national development priorities while maintaining strong risk management and sustainable growth.

Inflationary pressures remained broadly contained, while monetary and regulatory frameworks continued to support financial stability and credit discipline. Accelerated investment in digital infrastructure and financial technology further reshaped customer behavior and service delivery models across the sector, requiring banks to balance growth ambitions with agility, innovation, and disciplined execution amid evolving risk dynamics.

Oman’s improving macroeconomic fundamentals were reinforced by positive sovereign credit rating actions during the year. Fitch Ratings upgraded the Sultanate’s long-term foreign-currency rating to BBB- with a stable outlook, while Standard & Poor’s affirmed Oman’s investment-grade rating at BBB- with a stable outlook. These developments reflected strengthened fiscal discipline, declining public debt levels, and improved economic resilience, supporting investor confidence and a favourable operating environment for the banking sector.

CONSOLIDATED FINANCIAL PERFORMANCE

The Bank’s recorded net profit after tax of  34.4 million for the year ended 31 December 2025, up 13% compared to  30.4 million in 2024.

Net interest income from conventional banking and net income from Islamic financing stood at   112.6 million for the year ended 31 December 2025, up 13% compared to  99.5 million in 2024 due to an increase in interest and financing income by 3% coupled with decrease in interest and profit expense by 4%.

Operating income increased by 10% to  139.0 million for the year ended 31 December 2025 compared to  126.5 million in 2024, while operating expenses increased at a slower rate of 4% to reach  75.2 million compared to 72.2 million in 2024. This has led to a healthy growth in operating profit which grew 17% to reach  63.7 million in 2025 compared to 54.3 million for the last year. Net allowances for expected credit losses recorded  22.9 million in 2025 compared to  18.1 million in 2024.

Net loans and advances, including Islamic finance, grew 7% to  3,720 million compared to  3,491 million at 31 December 2024, while customer deposits reached  3,775 million by the end of 2025, up 6% compared to  3,572 million at 31 December 2024.

PERFORMANCE OF THE PARENT COMPANY

The parent company recorded a net profit after tax of  34.7 million for the year ended 31 December 2025, up 13% compared to  30.7 million in 2024. Interest income grew 1%, driven by higher investments, loans and advances, while interest expense decreased by 7% due to a favourable change in the deposit mix and an increase in current accounts and savings accounts. Operating income reached  112.7 million for the year ended 31 December 2025, up 11% compared to  101.4 million in 2024, driven by 12% growth in net interest income and an increase in share of profit from subsidiary by 20%. Operating expenses increased by 5% to reach  55.2 million for the year ended 31 December 2025 compared to  52.6 in 2024 while operating profit recorded an increase of 18%. Net allowances for expected credit losses increased by 31% to record  18.5 million for the year ended 31 December 2025 compared to  14.1 million in 2024.

Net loans and advances stood at  2,514 million at 31 December 2025, compared to  2,391 million for the same period last year. Customer deposits reached  2,495 million at 31 December 2025 compared to  2,467 million at 31 December 2024. A key highlight of the Parent Company’s performance was the successful completion of the  50 million rights issue, which strengthened the Bank’s capital base.

 

PERFORMANCE OF ALIZZ ISLAMIC BANK

 

Alizz Islamic Bank’s net profit grew by 20% to  12.0 million for the year ended 31 December 2025 compared to  10.0 million in 2024. Net financing receivables increased by 10% and reached  1,206 million at 31 December 2025 compared to  1,100 million for the same period last year. Customer deposits reached  1,280 million at 31 December 2025, up 16% compared to  1,104 million at 31 December 2024.

AWARDS AND RECOGNITIONS

Oman Arab Bank (OAB) received wide recognition during the year for its strategic excellence and strong execution across key areas. The Bank was officially honored by the Ministry of Labor for its pivotal role in enabling efficient digital government revenue collection. It also received the “Best Cybersecurity and Risk Management Implementation in Oman” award alongside regional recognition as the “Best Brand in Customer Experience for Corporate Banking,” reflecting its investment in digital innovation and service quality for corporates and SME clients. In addition, OAB was recognized for its “Outstanding Commitment to SME Growth and Empowerment”, reinforcing its role in supporting entrepreneurship and economic development.

Building on this momentum, OAB received national recognition for its leadership in community development and financial inclusion under the theme “From Initiatives to Empowerment,” and was awarded the “Organization with Best CSR Practices” in recognition of its sustainable social impact.

During the final quarter of 2025, Oman Arab Bank continued to earn external accolades for excellence in operations and innovation. The Bank was honoured with the CXO Award, reflecting its leadership in customer experience and organizational performance. It also received an award from STP Citibank in recognition of its strong performance and operational efficiency in transaction banking. Furthermore, the Bank’s marketing and communication capabilities were acknowledged through recognition at the TOMI Awards, underscoring its ability to deliver impactful and strategically aligned campaigns.

PRODUCTS AND SERVICES

Across the first three quarters of 2025, OAB strengthened its focus on enhancing customer experience and supporting economic growth through the launch of innovative products and digital solutions. In Q1, the Bank introduced a new suite of commercial banking services, leveraging Host-to-Host and SWIFTNet connectivity, launched the Corporate Mobile Banking application, and rolled out a Virtual Account solution for brokerage firms listed on the MSX. Retail momentum was supported through targeted campaigns, including the Ramadan ‘Markabati’ Car Loan and a 4% cashback Eid al-Fitr Spend campaigns, while Alizz Islamic Bank partnered with Visa to launch premium shari’a-compliant premium cards with instant issuance capabilities.

Product and engagement initiatives continued in Q2 with the “Eidiyah from OAB” cashback campaign for Eid Al-Adha, rewarding credit cardholders for local and international spending. In Q3, OAB further enhanced retail offerings through the “Travel Loan,” “Kharif Dhofar,” and “Back to School” campaigns, alongside the introduction of “Low-Cost Remittances” to over 50 countries. During the same period, Alizz Islamic Bank expanded its digital offerings through the launch of Visa Business debit/credit cards, a new mobile app for corporate/SME customers, and a fully digital E-Mandate for Direct Debit service.

In Q4, OAB continued to expand its product portfolio with a focus on premium banking experiences and customer value. The Bank launched a limited-time promotional partnership with Hypermax, offering Visa credit cardholders instant savings on essential grocery purchases, reinforcing the Bank’s commitment to value-driven, everyday banking solutions.

 

STRATEGIC COLLABORATIONS & PARTNERSHIPS

During the year, OAB accelerated its strategic contribution to national development, community empowerment, and digital innovation, fully aligning with Oman Vision 2040. Early-year initiatives focused on national talent development, including participation in the SQU Career Fair and the ‘Ruwad Al Arabi’ program, and financial inclusion, marked by a strategic partnership with Takaful Oman Insurance to integrate financial services and a key role with the FSA to launch five digital trading platforms on the MSX. The Bank continued to support economic growth through over       100 million in SME financing, participation in the landmark Hafeet Rail project, and the execution of an innovative interest rate swap transaction in the oil and gas sector. In parallel, OAB launched a nationwide financial literacy program targeting SMEs to strengthen financial capability. In Q3, OAB further promoted entrepreneurship through the Tumouhi SME Development Roadshow in Salalah and financed key national transactions including the USD 1.6 billion deal to complete construction of the polysilicon plant in the Sohar Free Zone. Alizz Islamic Bank complemented these efforts through initiatives focused on environmental and social responsibility, including support for Special Olympians and participating in the Stride for Nature Charity Run.

Strategic partnerships remained central to OAB’s growth agenda in the final quarter of 2025. The Bank entered into a cooperation agreement with Genacom to strengthen digital and operational capabilities and signed a memorandum of understanding with the Omani Games and Esports Committee, supporting emerging digital sectors and youth-focused initiatives.

In the infrastructure and sustainable development space, OAB partnered with Sohar Port and Freezone to provide USD 220 million in financing, supporting one of Oman’s key logistics and industrial hubs. The Bank further reinforced its role in national development through the financing and launch of the Boulevard Al Samou project, a landmark urban development delivered in collaboration with the Ministry of Housing and Urban Planning and Al Daham Real Estate.

EVENTS AND PARTICIPATION

The Bank reinforced its focus on innovation and customer experiences. As the Official Banking Sponsor of the Muscat International Book Fair 2025, OAB introduced a fully cashless experience through the deployment of its SoftPOS solution across all vendor stalls, enabling secure cards and smartphone payments. In collaboration with Dar Al Atta’a, the Bank launched a community book donation drive, encouraging the collection of gently used books for children across Oman.

In Q4, OAB hosted the CEO Summit 2025, bringing together senior leaders and decision-makers to discuss strategic priorities and future economic trends. It also engaged broader business and public audiences through participation in Al Dar Expo and by hosting a dedicated business roundtable, reinforcing transparency and constructive dialogue.

In recognition of national leadership and contribution, the Bank honoured H.E. Mohammed Al Zubair at a special event celebrating individuals who have shaped Oman’s economic, social, and cultural development. The quarter also featured the YouthVerse initiative, aimed at empowering Omani youth in creativity, technology, and esports, and concluded with an exclusive Elite client event, strengthening relationships with the Bank’s premium clientele.

 

DEVELOPMENT OF HUMAN RESOURCES

In 2025, OAB placed strong emphasis on human capital development, employee well-being, and organizational culture, reinforcing its internal talent pipeline and national commitment. Early in the year, the Bank refreshed and launched the nine-month Al Ruwad Graduate programme for 25 young national talents, in partnership with the Ministry of Labour. Momentum continued through the year with by offering a wide range of training programs and internship opportunities, alongside the introduction of the “Junior Banker” program for students.

Employee engagement and culture were further enhanced through regular branch visits, ‘Breakfast with the CEO’ sessions, OAB Ramadan Football Tournament, alongside automation of HR processes to improve efficiency and employee experience. OAB also rolled out a Bank-wide Competency Framework to align employee skills with organizational goals.

Alizz Islamic Bank complemented these efforts with targeted development programs, including banking training program for non-banking professionals in Q1, and the successful graduation of multiple flagship programmes such as “Ruwad Alizz”, “Tamkeen”, and “Manahil Alizz”. These programs, alongside youth-focused partnerships, underscored the Group’s commitment to nurturing national talent in line with Oman Vision 2040.

COMMUNITY ENGAGEMENT

Throughout 2025, OAB and Alizz advanced their commitment to social responsibility and community empowerment, with a strong focus on financial inclusion, entrepreneurship, youth development and special needs support.

In the first half of the year, OAB launched a pioneering debt waiver initiative to support distressed customers and organized the annual Iftar Saem, demonstrating its commitment to social solidarity. Financial literacy and youth engagement were further strengthened through the launch of “Money Adventures for Young Savers,” a nationwide financial education program developed with the Ministry of Education to reach 3,000 students. Inclusivity remained central to the Bank’s efforts, with sponsorship of six Special Olympics athletes, who secured seven medals at the Turin 2025 World Winter Games, and sponsorship of “Safar” tour.

Alizz Islamic Bank complemented these initiatives through its “Sports for All” initiative, by sponsoring a full-year training program for ten Special Olympics Oman athletes. It also partnered with SQU for the GCC Sports Tournament, and continued its “Sharakah” program to provide intensive guidance to eight selected SMEs. Both banks also delivered impactful Ramadan initiatives focused on digital donations and community support.

Community engagement continued in the latter part of the year with the expansion of the Tumouhi Sharqiya initiative, extending SME support to the Al Sharqiya governorates. In parallel, OAB reinforced its integrated approach to community and employee wellbeing by hosting one of its SME clients, Rusayl Diagnostic Center, at its Head Office, promoting health awareness among staff while supporting local enterprise visibility.

 

 

 

 

 

 

 

 

CONCLUDING THOUGHTS

As we look ahead, we remain focused on leveraging opportunities presented by Oman’s dynamic economic landscape to deliver sustainable growth. I extend my heartfelt gratitude to His Majesty Sultan Haitham bin Tarik, may the Almighty protect and preserve him, for his visionary leadership and to our shareholders, customers, and employees for their continued trust and support. Together, we will achieve new milestones and drive a prosperous future for OAB.

Sincerely,

Rashad Al Zubair

Chairman of Board of Directors