Moody's Investors Service has published the rating results for banks in Oman as part of the application of its refined joint default analysis (JDA) and updated bank financial strength rating (BFSR) methodologies.
BFSRs evaluate the stand-alone or intrinsic financial strength of banks without reference to external support factors. BFSRs are the starting point of Moody's bank credit analysis, and are an important determinant of Moody's bank deposit and debt ratings. Moody's then uses its JDA methodology to incorporate the potential for external support into a bank's local currency deposit rating. The potential for external support can reduce the riskiness of a bank's deposit and debt obligations; however, such support is often uncertain.
Moody's uses conservative support assumptions and a limited number of support levels to ensure that sufficient weight is given to a bank's intrinsic financial strength in its bank deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings based on its notching guidelines for bank securities. Ratings for foreign currency obligations are determined after considering Moody's country ceilings for foreign currency ratings.
The methodologies are being implemented country by country, with results being announced on a weekly basis. Results for those banks with a parent bank located in another country where the methodologies have not yet been implemented will be concluded at the same time as the parent.
The majority of Omani Banks have benefited from a one-notch upgrade of their BFSRs due to their increasingly sound financial fundamentals and strong franchises, while their local currency deposit ratings, especially those of systemically important or partially government-owned banks, have also benefited from a very high probability of systemic support in case of need.
This press release lists the names of issuers in Oman whose ratings have been changed, affirmed, or put on review.
The specific ratings changes are as follows:
Alliance Housing Bank - The BFSR is changed to D from D-. The Local Currency Deposit Rating is unchanged at Baa1/P-2. The Foreign Currency Deposit Rating is unchanged at Baa1/P-2. The outlook on all ratings is stable.
Bank Muscat - The BFSR is changed to C- from D+. The Local Currency Deposit Rating assigned is A1/P-1. The Foreign Currency Deposit Rating is unchanged at A3/P-2. The Foreign Currency Bond Rating for senior obligations is changed to A1 from A3. The Local Currency Bond Rating for senior obligations also is changed to A1 from A3. The outlook on the A3/P-2 Foreign Currency Deposit Rating is positive. The outlook on all other ratings is stable.
National Bank of Oman - The BFSR is changed to D+ from D-. The Local Currency Deposit Rating assigned is A3/P-2. The Foreign Currency Deposit Rating is unchanged at A3/P-2. The outlook on all ratings is stable.
Oman Arab Bank - The BFSR is changed to C- from D+. The Local Currency Deposit Rating assigned is A2/P-1. The Foreign Currency Deposit Rating is unchanged at A3/P-2. The outlook on the A3/P-2 Foreign Currency Deposit Rating is positive. The outlook on all other ratings is stable.
Oman International Bank - The BFSR is changed to D+ from D. The Local Currency Deposit Rating assigned is A3/P-2. The Foreign Currency Deposit Rating is unchanged at A3/P-2. The outlook on all ratings is stable.
