Fitch revises five Omani banks to negative

Fitch Ratings said it revised the outlook on five Omani banks – Bank Muscat, HSBC Bank Oman, Ahli Bank SAOG, Bank Dhofar and Bank Sohar – to negative from stable.

The outlook on National Bank of Oman remains stable.

The agency also affirmed the long-term issuer default rating of all six banks

The actions follow the June 19 revision of the outlook on the Omani sovereign to negative.

Fitch said it believes Oman has the financial flexibility, albeit weakening due to lower oil prices, to support its banking system. The fiscal policy response to the drop in oil prices has not prevented a significant deterioration in public finances.

The agency believes the Omani authorities' willingness to support domestic banks remains high, partly because of high contagion risk (small number and high concentration of banks in the system) and the importance of the banking system in building the local economy.

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