Muscat, Al Khuwayr, Oman. A typical landscape of Muscat, with rocky mountains just behind the city. Getty Images
Bank Muscat reported a 5 per cent year-on-year rise in its nine-month net profit. Getty Images

Oman’s banking system outlook changed to negative, Moody's says

author image

Moody's Investors Service on Tuesday  changed its outlook on Oman's banking system from stable to negative, citing prospects of a sharp fall in the pace of credit growth and the diminished capacity  of the government to support banks in the sultanate on the back of softer economic conditions.

"We expect a softening in Oman's operating environment, with fiscal consolidation amid prolonged oil price weakness weighing on economic growth," Mik Kabeya, an analyst at Moody's said in the latest report on Omani banking system. "This will weigh on credit growth, which we forecast to fall to 5 per cent in 2017, down from 10.1 per cent in 2016 and 12 per cent in 2015."

The ability of the Omani government to support lenders, should a need arise, is curtailed by fiscal deterioration, and that was reflected in Moody's downgrade and negative outlook on the government's credit rating in July.

The rating agency said the change in the outlook on Oman's banking system reflects its expectation about how bank creditworthiness will evolve in  the country over the next 12 to18 months.

Oman, which is largest oil producer in the Middle East outside Opec,  relies heavily on the sale of crude for revenues like its GCC peers. The persistently low oil prices have forced the country to cut spending and a subsequent slowdown in the economy has resulted in weaker credit growth and a rise in problem loans.


Read more:


Bad loans in Oman are expected to rise to around 3 per cent of gross loans in 2017-18 from 2.1 per cent at the end of March this year, according to Moody's, which added that high concentrations of loans to single borrowers, particularly  in the real-estate sector, pose downside risks to asset quality.

Profitability for Omani lenders will also remain under pressure and is likely to decline slightly, according to Moody's.

“Net interest margins will likely remain stable at around 2.4 per cent over the outlook horizon as higher lending rates offset increasing funding costs, while loan-loss provisioning will increase somewhat as problem loans rise,” the rating agency said.

Funding and liquidity conditions will remain tight, as high domestic government borrowing limits the funds available to be lent to the wider economy. However, the government's international bond issuances, slower credit growth and higher oil prices will moderate the pressure.

Brief scores:

Toss: Northern Warriors, elected to field first

Bengal Tigers 130-1 (10 ov)

Roy 60 not out, Rutherford 47 not out

Northern Warriors 94-7 (10 ov)

Simmons 44; Yamin 4-4


Developer: 11 Bit Studios
Publisher: Odd Meter
Console: PlayStation 5, PC and Xbox series X/S
Rating: 4/5


Main card

Robert Whittaker defeated Ikram Aliskerov via knockout (Round 1)
Alexander Volkov def Sergei Pavlovich via unanimous decision
Kelvin Gastelum def Daniel Rodriguez via unanimous decision
Shara Magomedov def Antonio Trocoli via knockout (Round 3)
Light heavyweight:
Volkan Oezdemir def Johnny Walker via knockout (Round 1)
Preliminary Card

Nasrat Haqparast def Jared Gordon via split decision
Felipe Lima def Muhammad Naimov via submission (Round 3)
Rinat Fakhretdinov defeats Nicolas Dalby via split decision
Muin Gafurov def Kang Kyung-ho via unanimous decision
Light heavyweight:
Magomed Gadzhiyasulov def Brendson Ribeiro via majority decision
Chang Ho Lee def Xiao Long via split decision


Name: SupplyVan
Based: Dubai, UAE
Launch year: 2017
Number of employees: 29
Sector: MRO and e-commerce
Funding: Seed

In-demand jobs and monthly salaries
  • Technology expert in robotics and automation: Dh20,000 to Dh40,000 
  • Energy engineer: Dh25,000 to Dh30,000 
  • Production engineer: Dh30,000 to Dh40,000 
  • Data-driven supply chain management professional: Dh30,000 to Dh50,000 
  • HR leader: Dh40,000 to Dh60,000 
  • Engineering leader: Dh30,000 to Dh55,000 
  • Project manager: Dh55,000 to Dh65,000 
  • Senior reservoir engineer: Dh40,000 to Dh55,000 
  • Senior drilling engineer: Dh38,000 to Dh46,000 
  • Senior process engineer: Dh28,000 to Dh38,000 
  • Senior maintenance engineer: Dh22,000 to Dh34,000 
  • Field engineer: Dh6,500 to Dh7,500
  • Field supervisor: Dh9,000 to Dh12,000
  • Field operator: Dh5,000 to Dh7,000

Most Read
Top Videos

Energy This Week

Expert analysis on oil & gas renewables and clean energy

      By signing up, I agree to The National's privacy policy
      Energy This Week