National Bank of Oman and the "Mysterious" Treasure Fleet International

Not To Scale

Larger Than Life

You may have seen articles that Treasure Fleet International of Singapore had offered to buy a stake (amount undisclosed) in National Bank of Oman.  Gulf News.  Reuters.

Here’s the report from the Times of Oman.  Emphasis courtesy of AA.

“Muscat: National Bank of Oman (NBO) on Thursday said that it had received a letter from Treasure Fleet International Pte Ltd proposing to acquire a stake in the bank.

“The proposal from Treasure Fleet International Pte. Ltd. will be reviewed and discussed by the board of directors. Further disclosure concerning this matter will be made if there are developments to report,” said a bank disclosure statement posted on MSM website.

NBO also said that no legally binding commitments have been made and this matter is still subject to review and approval by NBO’s board of directors, the shareholders of NBO and the local regulatory authorities. Treasure Fleet International is a Singapore-based firm, according to its website, which is under development.

That last bit caught AA’s eye.  Off on a buying spree, but doesn’t have a working website.

But the press doesn't seem to have a clue about TFI.  Or was unable to find a clue.  Or didn't bother to.

AA did a cursory search via the internet and learned:

1. As per the Government of Singapore’s “bizfile”, the company was formed and registered in Singapore 24 August 2016 with Ng Lee Ken (NLK) filing the paperwork.   The same source notes that on 29 August NLK also filed a change of shareholders. Check the EROM section.  Side note:  This is fairly common.   A local registered agent opens a company using its personnel as shareholders of record and then subsequently amends the shareholders’ list to reflect new shareholders (presumably the actual owners or their other nominees).
2. As per Singapore’s Business Times, TFI was formed with between S$500,00 to S$5,000,000 (roughly US$345,000 to US$3,448,000) in capital.
3. As per AA's research, TFI shares its Singapore office and telephone number 65 6286 3622 with the following other companies:  Andromedic/MEA; Elite Power; and VKMCS (Victory Knights Management Consulting Service).
4. The Oman Connection Updated: Elite Power has an office in Oman.    VKMCS is no stranger to Oman having relationships with Bank of Muscat, Al Ramooz Group of Companies, Voltamp Oman,  and the Royal Oman Navy and joint partnerships with TFI and Andromedic.  VKMCS also appears to be related to Seven Seas Victory Knights Company LLC Oman.  A common principal individual appears to be a Mr. Nicholas Koh. 

So what we’ve got here is a 4 month old company with no more than US$3.4 million in capital apparently making an offer to buy a stake in NBO significant enough for NBO to file a report with the Muscat Securities Market.

Curious. 

At first blush TFI seems to be rather small tonnage for a sea voyage of this sort. But with the network of affiliated companies, who knows?

There is additional information for sale at “bizfile”, though it seems one needs a SingPass to pay. SingPass is restricted to Singaporeans and those with residence.   Neither of which AA qualifies for. 

So an appeal to any of SAM’s Singaporean readers out there or other folks more clever than AA to buy the documents and post a comment with details of shareholders of record.  Perhaps the Oman connection goes deeper.

For that purpose, TFI’s UEN (corporate registration) is 201623102G. 

Its registered address is:

62 UBI ROAD 1

#09-03

OXLEY BIZHUB 2

SINGAPORE 408734 Good hunting!

National Bank of Oman 2008 Preliminary Earnings Announcement - 42.5% Lower Than 2008

You've probably seen the press headlines that NBO's 2009 earnings were 42.5% lower than 2008.  But probably not much more than the headline.

While the announcement on the Muscat Exchange is  naturally brief (this is an announcement of preliminary results after all), we can look at earlier quarterly reports  on NBO's website to get sufficient information to make an informed guess about the full year's results. 

At 30 September 2009, NBO's net income was OR 26.1 million which was down some 43.8% from the comparable nine month period in 2008.  For the full year (FYE) net profit was down 42.5%.

What drove this decline?  Without the 4Q09 numbers, we don't know for certain, but with the 3Q09 financials we can infer the difference. 

First, Operating Profit (profit before provisions and taxes) was down some 4.9% at 3Q09.  At FYE 2009 it was down 13.3%.  That implies some deterioration in 4Q09 but not sufficient to cause the 42.5% drop in net income.

Second, the major culprit in depressing 3Q09 net income were expenses related to loan losses.  Provisions were OR10.4 million a whisker higher than 2008. So the culprits are in recoveries on previous provisions, charegoffs as well as other items.

Here are the details- again for the first nine months of the year:

1. Net recoveries of OR4.7 million versus OR12.9 million - a difference of OR8.2 million.
2. OR3.1 million in impairment losses on available for sale investments versus zero the year before.
3. OR4 million in credit loss expense for bank loans versus zero the year before. 

The total is OR15.3 million in additional expenses in 2009.

We can expect a similar pattern to hold in 4Q09 with net income in that period an additional OR6 million (which appears to be the average run rate per quarter for the year).

Two more observations.

First, if we look at comprehensive income (which includes changes in fair value that did not pass through the income statement), NBO's (comprehensive) income for the first nine months was OR22.5 million versus OR30.2 million for 2008.  On this basis the decline is only 25.5%.

Some additional information on the additional credit loss expense.  The bank loans comprise OR1.9 to a bank in Kazakhstan (my guess is Alliance but it may be BTA).  And OR6.6 million in exposure to Awal Bank and The International Banking Corporation.  NBO took a 50% provision on the Saudi Group exposure and 37.5% on the Kazakh bank. 

Update:  While I haven't been following Kazakhstan, I suspect 37.5% may be a bit light for a provision.  As to Awal and TIBC, this provision is probably light as well.  The Governor of the Central Bank of the UAE is on record as requiring his banks to provision 100%.  According to the press reports, he is quoted as saying this level is on par with local and international regulators' views. Earlier post here.