Mubasher: Moody's downgraded today the long-term deposit ratings of five Omani banks as well as placing all banks' ratings under review for downgrade.
The rating agency lowered Bank Muscat rating to A3 from A1, Oman Arab Bank to Baa1 from A2, National Bank of Oman Limited to Baa1 from A3, Bank Dhofar and HSBC Bank Oman to Baa1 from A3, according to Moody’s report.
Moody's downgraded the baseline credit assessments of Bank Muscat to baa2 from baa1 and Oman Arab Bank to baa2 from baa1, and placed them along with Bank Dhofar under review for downgrade.
It also affirmed the Ba3 corporate family rating and the B1 issuer rating of Al Omaniya Financial Services and downgraded the company’s outlook to negative from stable.
The report pointed out that the Omani banks’ rating decline is due to Moody's downgrade of Oman's government issuer rating to A3 from A1 and its placement on review for downgrade.
The report also attributed the reduction of the five banks’ ratings to Oman authorities' weakened fiscal capacity to support the local banks, in addition to the weak operating environment for banks.
The report predicted that these actions will affect Omani banks financing, profitability and asset quality.
