Insurers indemnify Bank Muscat in $39m card fraud

Bank Muscat, Oman’s top lender, said the bank will recover the $39 million it lost in a global pre-paid card fraud after insurers agreed to indemnify the loss.

In a globally coordinated campaign, hackers broke into two unidentified payment processing companies in India that handled the prepaid debit cards for two Middle Eastern banks and stole $45 million, including from Bank Muscat. The other lender was National Bank of Ras Al-Khaimah in the United Arab Emirates.

Bank Muscat had reported in February that its pre-paid travel cards were hit by fraud, forcing it to take a 15 million rial ($39.0 million) loss provision.

“We refer to our initial disclosure on Feb 25, 2013 in relation to the pre paid card fraud incident and would like to inform the market that the bank’s insurers have agreed to indemnify the bank’s loss in the sum of $38.8 million,” it said in a bourse statement on Sunday.

“The bank will reverse the loss provision created in Q1 2013 towards this specific loss through its Q4 2013 results.”

Bank Muscat’s shares rose 2.0 percent in the first minutes of trading on Oman’s stock exchange.-Reuters