The Banking Executive Magazine - June 2025 Issue

OAB OAB UNVEILS CAPITAL BOOST TO POWER SME GROWTH AND DIGITAL INNOVATION Oman Arab Bank (OAB) plans to in- crease its authorised capital to RO 500 million, up from RO 200 million presently, and increase its paid-in capital by RO 50 million by way of a shareholder-underwritten rights issue, subject to regulatory ap- provals. The capital boost is designed to increase the Bank's capital ade- quacy, enable enhanced lending to priority economic sectors, and spur digital innovation, with enhanced fi- nancial strength and long-term growth flexibility. Sulaiman al Harthi, Chief Executive Officer of Oman Arab Bank, stated, “This move is expected to signifi- cantly strengthen the bank’s capacity to contribute to national economic growth. It will enhance the bank’s ability to finance large, medium, and small-scale projects, while also im- proving its overall financial standing and credit rating. These improve- ments will better position the bank to attract funding from international lending institutions and potentially support future capital increases,” he remarked. This strategic move will assist in strengthening the Bank's level of cap- ital adequacy and set the stage for in- creased retail and corporate borrowing. It will also allow the Bank to have more room to invest in digital banking technology, further advancing its vision of growth through innovation. The capital boost will be particularly heartening for small and medium en- terprises (SMEs), which form the backbone of Oman's private sector. With its enhanced lending capability, Oman Arab Bank will be better placed to provide expert finance so- lutions, larger credit facilities, and targeted support to SMEs—sectors that traditionally face funding con- straints. The Bank's stronger position will also enable the launch of more nimble financing offerings and digital banking services that can streamline operations and improve financial in- clusion for growing businesses. With its empowerment of SMEs, the Bank not only speeds up entrepreneurship and job creation but also makes a di- rect contribution to Oman's broader economic diversification goals under Oman Vision 2040. The growth of paid-in capital will be brought about by way of a rights issue, whereby existing shareholders, being the record date to be deter- mined, have a choice of subscribing on a pro-rata basis. The authorized capital increase is designed to pro- vide longer-term flexibility so that the Bank can seize future equity is- suance opportunities in response to evolving market conditions. Such endeavours further enhance Oman Arab Bank's vision-driven ap- proach for supporting Oman's eco- nomic aspirations with financial caution and preparedness to expand. Oman Arab Bank's planned capital increase is a bold step based on fi- nancial solidity, innovation, and na- tional development. Through consolidation of its capital pillar, the Bank is positioning itself to better contribute to the economic develop- ment of Oman, improve lending ca- pacity in core sectors, and propel digital progress. With the endorse- ment of shareholders and regulatory inputs, this action is a milestone to- wards achieving long-term solidity and strategic responsiveness within a transforming financial environment. the BANKING EXECUTIVE 22 ISSUE 198 JUNE 2025 Sulaiman al Harthi Chief Executive Officer of Oman Arab Bank