The Banking Executive Magazine, Issue 154, October 2021

MOODY'S CHANGES OUTLOOK ON SEVEN OMANI BANKS TO STABLE Moody's Investors Service has changed the outlook on seven Omani banks to stable from nega- tive. The ratings agency said it has af- firmed their long-term local and for- eign currency deposit ratings. The banks under review are Bank Mus- cat, HSBC Bank Oman, Bank Dhofar, National Bank of Oman, Sohar Inter- national Bank, Oman Arab Bank and Bank Nizwa. The revisions are based on Moody's expectation that the operating envi- ronment for the banks will continue to improve. It has also changed the outlook on Ba3 Omani government's ratings to stable from negative. The higher oil prices have led to a large reduction in external vulnerability and government liquidity pressures and Moody's expects that oil prices will average above $60/barrel during the next several years, increasing the likelihood that these pressures will remain contained. In addition, the "ongoing implemen- tation of the government's medium- term fiscal adjustment program will also underpin a steady decline in the direct government debt burden to the pre-pandemic level," it said. Moody's expects the government would step in to provide support to banks in case of need due to the im- portance of the country's banks in the domestic financial system and the significant government share- holdings and deposits in several banks. Also, the conservative regulatory framework in Oman helps support the banks' governance practices, it added. ISSUE 154 OCTOBER 2021 the BANKING EXECUTIVE 43