CI Ratings upgrades Oman Arab Bank’s outlook from Stable to Positive

By Arya M Nair, Official Reporter
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Oman Arab Bank gains positive outlook

The Capital Intelligence Ratings (CI Ratings) has revised outlook on Oman Arab Bank’s (OAB) Long-Term Foreign Currency Rating (LT FCR) and Bank Standalone Rating (BSR), from ‘stable’ to ‘positive’.

The bank’s LT FCR and BSR are respectively ‘BB’ and ‘bb’, while its Short-Term Foreign Currency Rating (ST FCR) has been affirmed at ‘B’, its Core Financial Strength (CFS) at ‘bbb-’ and its Extraordinary Support Level (ESL) at ‘moderate’. The move follows CI Ratings’ similar revision of Oman’s sovereign ratings outlook to ‘positive’ from ‘stable’.

Sulaiman Al Harthi_OAB gains positive outlook
Sulaiman Al Harthi
CEO – Oman Arab Bank

“Reflecting the similarly positive momentum across the Sultanate’s wider economy, we are extremely pleased to share the news of Capital Intelligence Ratings’ revisions for OAB. We see this move as a strong backing for the bank that will inspire further confidence in everything we are striving to achieve. Over the coming year, I share CI Ratings’ views and believe that OAB will continue to go from strength to strength, supported by strong economic growth. It’s a journey on which I am enthused to be steering us all.”

CI Ratings expects OAB’s ratings to be upgraded in the next 12 months, reflected by the ‘positive’ outlook, thanks to an improving operating environment, supported by stronger economic growth, with positive movement anticipated in terms of loan and deposit expansion prospects. Post-pandemic recovery is also seen as likely to stabilize loan asset quality, while rising interest rates provide a boost to earnings.

Other facets noted by CI Ratings included that OAB is well capitalized, with capital ratios fairly solid, and key metrics continued to be well above regulatory requirements. OAB’s LT FCR and BSR could be upgraded by more than one notch dependent on several factors, including if similar action is taken on a national scale.

Most recently, Oman’s outlook was revised to ‘positive’ by S&P Global. This assessment reflects the efforts made by the government to diversify the economy, strengthen fiscal position, reduce gross debt stock and implement reforms to improve the business environment and attract foreign investment.

Related: QIIB achieves stable outlook on its Long-Term Foreign Currency Rating