Press Release:
Press Release
News Article January 2004
S&P: BankMuscat Assigned 'BBB-/A-3' Ratings; Outlook Stable
LONDON, Jan. 6, 2004--Standard & Poor's Ratings Services said today 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.
"The ratings on BankMuscat reflect the bank's dominant commercial position in Oman, good earnings profile, and improving asset quality and capitalization," 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% 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% stake in a small private bank in India (Centurion Bank) in 2003. Operations outside Oman represent about 10% of the bank's assets and revenues.
The stable outlook largely reflects that on the Sultanate of Oman. "BankMuscat is expected to retain its leading commercial position and adequate financial profile, with no major change in its shareholding structure," said Standard & Poor's credit analyst Anouar Hassoune. The future direction of the ratings will largely depend on the evolution of the macroeconomic environment of Oman, as well as the bank's asset quality and capital policy.
"The ratings could be raised if the bank improves its capital adequacy through further capital increases or a reduction in risk assets, or due to improvements in the external economic environment," he added. If capital ratios reduce significantly in the medium term or asset quality deteriorates, the ratings would be pressured downward.
This press release is provided in good-faith by Chiltern Magazine Services Ltd ("CMS") as a service to users of www.telecomsinfo.com. Whilst all care is taken in sourcing and preparing material includede here, any error or incorrect content cannot form the basis for any legal action against the site-owner. Users are advised to check the accuracy of any statements before relying upon them. Likewise, any forward-looking statements made by the author of the press release should be treated as such.
CMS, P&A House, Alma Road, Chesham, Bucks. HP5 3HB, UKTel: +44 (0)1494 771734
Fax: +44 (0)1494 778994
e-mail: Editor, CMS Businessinfo
copyright © 2008 all rights reserved
For more information about us, visit CMS Businessinfo.
