(Updates share price in second paragraph)
Feb. 25 (Bloomberg) -- Bank Muscat SAOG dropped the most in seven months as Oman’s biggest lender reported fraudulent transactions totaling $39 million on travel cards.
The shares slid 4.3 percent, the most since July 11, to 0.607 rial at the close in Muscat. They tumbled as much as 6.9 percent. About 6.1 million shares were traded, almost five times the three-month daily average, according to data compiled by Bloomberg. The benchmark MSM30 Index fell 0.5 percent.
Twelve prepaid travel cards were “compromised” on Feb. 20 outside Oman, the bank said in a statement to the bourse today. “No customers have suffered any financial loss and no other credit or debit cards issued by Bank Muscat have been affected.”
Losses from loan defaults at banks have risen across the Persian Gulf since the credit crisis as slowing economic growth led to thousands of job losses. Bank Muscat reported last month an 18 percent increase in annual profit to 139.2 million rials ($362 million), meeting analysts’ estimates. The lender’s impairment charges for bad loans rose 3.2 percent last year to 57.9 million rials.
The central bank in the neighboring United Arab Emirates in 2009 said it would ask banks to replace magnetic strips on credit cards with the “chip and pin” technology, to help combat credit card fraud. The move followed a review of the country’s cash-machine network and incidents of credit-card fraud.
Bank Muscat’s profit in 2013 is forecast to rise 10 percent to 153 million rials, according to the mean estimate of nine analysts compiled by Bloomberg. The shares are rated a buy by 11 analysts and a hold by two.
--Editors: Claudia Maedler, Mark Sweetman