Moody’s downgraded long-term local and foreign currency deposit ratings of Bank Muscat, Bank Dhofar, National Bank of Oman (NBO), Sohar International Bank and Oman Arab Bank (OAB), following downgrades transmitters of the Sultanate of Ba2 of Ba1.

The rating agency also downgraded the long-term rating of the foreign currency deposits of HSBC Bank Oman and Bank Nizwa, reflecting the weakening of the government’s ability to support local banks as well as the weakening of self-sustaining credit profiles. of some banks.

The downgrading of Oman’s issuers’ ratings reflects the country’s weaker fiscal strength, evident in higher public debt and lower debt accessibility.

The Sultanate’s debt is expected to continue to rise over the next two years, despite the rating agency’s expectation that the government will start implementing a major medium-term fiscal adjustment program to slow down in the coming years. months and curb the increase in the debt burden.

Moody’s said that in terms of governance considerations, it has no particular concerns for Omani banks, adding that the Sultanate’s conservative regulatory framework helps support lenders’ governance practices.

The rating agency changed the outlook for the seven banks from stable to negative for long-term deposit ratings.

Despite the implementation of some measures to cut spending and increase income, Oman’s debt and debt affordability indicators will continue to weaken over the next few years, Moody’s said.