S&P ratings assigned to BankMuscat

DUBAI - Standard & Poor's Ratings Services said yesterday it assigned its 'BBB-' long-term and its 'A-3' short-term counterparty credit and certificate of deposit ratings to Oman-based BankMuscat S.A.O.G. The outlook is stable. These are the first full interactive ratings assigned to an Omani bank by Standard & Poor's. At the same time, Standard & Poor's withdrew its 'BBpi' rating on the bank.

By A Staff Reporter

Published: Wed 7 Jan 2004, 11:56 AM

Last updated: Thu 2 Apr 2015, 12:04 AM

"The ratings on BankMuscat reflect the bank's dominant commercial position in Oman, good earnings profile, and improving asset quality and capitalisation," said Standard & Poor's credit analyst Emmanuel Volland. "They also reflect controlling ownership by the Government of Oman. Standard & Poor's considers that the bank's importance to the economy, its ownership structure, and status of flagship bank, mean that government support in times of difficulty would most likely be available," he added.

The ratings are constrained, however, by the small and concentrated Omani economy, the bank's partial reliance on wholesale funding, and high loan leverage.

BankMuscat is the leading bank in the small financial sector of Oman, achieving a market share of about 35 per cent in loans and deposits. BankMuscat is strengthening its franchise and reducing reliance on its small home market through selective domestic and cross-border acquisitions.

In line with this strategy, it purchased a small domestic commercial lender, the Industrial Bank of Oman (IBO) in 2001, the branch of ABN Amro in Bahrain and a local broker in 2002, and a 26 per cent stake in a small private bank in India (Centurion Bank) in 2003. Operations outside Oman represent about 10 per cent of the bank's assets and revenues.

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