Increased letter of credit (L/C) business has contributed to improved performance at one of Oman's largest banks.

National Bank of Oman (NBO) now joins the ranks of an apparently burgeoning number of financial institutions in the Arabian Gulf and elsewhere that are benefiting from buoyant L/C business.

NBO improvements

Oman's second largest lender by market value, NBO recently reported its second largest quarterly profit after recovering funds from bad debt and boosting lending.

NBO's chief financial officer, Arvind Aiyer, told the Reuters news agency that fees from L/Cs had contributed to the bank's healthy performance in the first quarter. Fees and commissions overall surged a massive 45.5 per cent he said.

Other banks

Earlier this year Commercial Bank of Dubai reported that its L/C and guarantee business in 2006 increased to AED6,793 million, up 41 per cent on the previous year. (DC World News, 27 January 2007).

In Bahrain, increased L/C and guarantee business also contributed to an 18 per cent increase in profits in the nine months to 30 September 2006 compared with the same period in the previous year at Gulf International Bank. (DC World News, 30 November 2006).

In the US meanwhile, Cleveland-based regional bank, National City, recently reported that over the last five years it has recorded a 210 per cent increase in the value of L/Cs it provides for deals with China alone. (DC World News, 13 December 2006)

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.