International ratings agency Fitch Ratings has affirmed Ahli Bank SAOG's (ABO) Long-Term Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. Fitch has also affirmed the bank's Viability Rating (VR) at 'b+' and Government Support Rating (GSR) at 'bb-'.
“Ahli Bank’s) Long-Term IDR is driven by potential support from the Omani authorities, as expressed by its GSR of 'bb-'. The VR reflects its moderate but strengthening franchise, as well as a weaker risk profile and weaker capitalisation and funding than peers. The latter is being actively addressed,” said Fitch.
Fitch revised its assessment of the Omani banks' operating environment score to 'bb' from 'bb-' following the Omani sovereign upgrade in August 2022. This signals improvements in operating conditions in the context of higher oil prices, which will drive credit demand and ease pressures on banks' financial profiles.
Ahli Bank is the fifth-largest bank in the Sultanate of Oman with a market share of 8%-9% by assets at end-3Q22. It primarily targets corporate clients (71 per cent of gross loans at end-2022). The lender operates domestically (only 0.3 per cent of net loans were to non-residents at end-3Q22) and non-Omani exposures are bank placements, financial investments and off-balance-sheet trade finance transactions. The franchise has been growing, aided by the opening of traditional and digital branches, which is benefiting deposit collection capabilities.
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