Oman: Best Corporate and Investment Bank 2020
Oman’s largest bank by assets is also the Sultanate’s best bank. It is big in its home territory: Bank Muscat is three times the size of Oman’s second- , third- and fourth-largest lenders combined. In 2019, it reported a net profit of OR186 million ($482 million), up 3.3% year on year.
In a tough year, Bank Muscat’s figures impressed across the board. Despite the triple hit in recent years of lower oil and gas prices, a fragile and underperforming economy and questions – now decisively answered – about the successor to Sultan Qaboos bin Said Al-Said, the bank reported a 4.2% year-on-year rise in net income, with non-interest income up 9% over the period. At the end of 2019 it had a more than healthy capital adequacy ratio of 19.72% and a return on equity of 10.73%.
Bank Muscat is a domestic leader in project and structured finance and has prioritized greater domestic financial inclusion. Its Islamic banking team heads the domestic pack, and the bank continues to invest in digital, upgrading its internet and mobile banking services over the last year, and rolling out new innovations including its Just Tap contactless debit, credit and prepaid cards.
It is a leader, too, in delivering services to small and medium-sized enterprises, and in particular to micro-SMEs, a segment of the business population long overlooked by Omani lenders. Even today, lending to MSMEs makes up just 3.5% of the average domestic bank’s book.
Bank Muscat is making progress here. At the end of March 2020, total outstanding lending to MSMEs was about OR327 million, with over 3,600 small companies benefiting from the bank’s services.
It is more than a good start – Bank Muscat accounted for more than half of all outstanding loans by volume to MSMEs at the end of 2019. But it needs help from its peers to serve this long-overlooked segment.
The value of good, solid corporate banking services can be overlooked at times, but Bank Muscat doesn’t make that mistake. Its rollout over the last 18 months of its global relationship management programme has strengthened its relationship with leading domestic firms and foreign partners doing business in the Sultanate.
Oman is never going to be a leading source of investment banking business, but where there are deals to be found, Bank Muscat is likely to be there. During the awards period, it helped the government of Oman to issue an OR300 million sukuk that was oversubscribed and completed ahead of schedule.
In February 2020, the Muscat-based lender helped domestic gas transportation firm Oman Gas sell a seven-year, $800 million credit facility to local lenders, and was on hand when petrochemical firm Octal closed a term loan facility of $225 million and a $400 million working capital facility in July 2019.
Finally, a word of praise to the bank itself for raising $650 million via a three-year loan from international banks in March 2020. The deal was announced just as cases of coronavirus began to rise and as Moody’s downgraded both bank and sovereign, due to its rising fiscal deficit.