International ratings agency Fitch Ratings has revised five Omani banks' Outlooks to Positive from Stable, while affirming their Long-and Short-Term Issuer Default Ratings (IDRs). The banks are Bank Muscat (BM; BB/B), Bank Dhofar (BD; BB-/B), National Bank of Oman SAOG (NBO; BB-/B), Ahli Bank (ABO; BB-/B) and Sohar International Bank (SIB; BB-/B).
Fitch has also affirmed the Viability Ratings (VRs) of BM at 'bb', BD and NBO at 'bb-', ABO at 'b+' and maintained the Rating Watch Positive (RWP) on SIB's 'b+' VR. Fitch has also maintained the Rating Watch Negative (RWN) on HSBC Bank Oman (HBON) 'BB+' Long-Term IDR, 'bb-' VR and Shareholder Support Rating (SSR) 'bb+'.
The rating actions follow a similar action on Oman's sovereign rating on April 11, 2023 and reflect the agency's view of an improving probability of support for the banks from the Omani authorities, Fitch stated.
Fitch has also revised its outlook to positive from stable on the 'bb' Omani banks' operating environment score, in line with the Outlook revision on the sovereign ratings, given banks' large direct and indirect exposure to the government and the wider public sector. “We also believe banks' business models, risk profiles as well as funding and liquidity will benefit from a stronger sovereign credit profile in revenue generation, business volumes, and deposit inflows,” it added.
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