Moody’s cuts Omani banks’ deposits

Moody's Investors Service said it downgraded the long-term local and foreign currency deposit ratings of the six banks it rates in Oman: BankMuscat SAOG to Baa2 from Baa1; HSBC Bank Oman SAOG to Baa2 from Baa1; Bank Dhofar SAOG to Baa3 from Baa2; National Bank of Oman SAOG to Baa3 from Baa2; Oman Arab Bank to Baa3 from Baa2; and Bank Nizwa to Ba1 from Baa3.

In addition, the agency changed the outlook to negative from stable on the ratings of five banks and maintained the negative outlook on the ratings of one bank. At the same time, it affirmed the baseline credit assessments and adjusted BCAs of the six banks.

Moody's also affirmed the Ba3 corporate family rating and the B1 issuer rating of Al Omaniya Financial Services SAOG, and maintained its outlook negative.

Moody’s said the action follows the July 28 downgrade of the Government of Oman's issuer rating to Baa2 from Baa1 and the change of its outlook to negative from stable. The sovereign action reflects the agency’s view that progress towards addressing structural vulnerabilities to a weak oil price environment has been more limited than expected, reflecting institutional capacity constraints to address the country's large fiscal and external imbalances.

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