Muscat Finance Ratings on Oman National Scale Affirmed; Outlook Revised to Negative

23 December 2021

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed the Long-Term Corporate Rating for Muscat Finance S.A.O.G. (MF) on the Oman National Scale at ‘omA-’. The Short-Term rating on the same scale has also been affirmed at ‘omA2’. The Outlook on the ratings has however been lowered to Negative.

The main risk factors underpinning the revision of the Outlook to Negative are related to asset quality and profitability, together with what remains a difficult operating environment for non-bank financial companies (NBFCs). High non-performing financing receivable (NPFR) accretion in 2019 and 2020 sharply increased provisioning requirements, with this at first reducing profitability at the net level and then moving the Company into a net loss in 2020. Although asset quality has now stabilised in terms of money NPFRs, a falling loan portfolio has meant that the NPFR ratio actually rose in H1 21. Profitability however improved a…