Capital Intelligence gives Oman's AHB positive rating

Capital Intelligence, the international bank rating agency, has assigned Alliance Housing Bank (AHB), one of the Sultanate of Oman's newer financial institutions, a positve rating.

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By  Massoud Derhally Published  March 10, 2002

Capital Intelligence, the international bank rating agency, has assigned Alliance Housing Bank (AHB), one of the Sultanate of Oman's newer financial institutions, an initial long and short-term foreign currency ratings of BB+ and A3 respectively, with a domestic strength rating of BBB- with a stable outlook. The sovereign rating for Oman is BBB long-term and A3 short-term.

AHB's ratings reflect its good management and sound financials. The constraining factors are its small size and limited scale of operations, which could make it vulnerable to adverse changes in internal and external circumstances.

AHB, which commenced operations in January 1998, is currently the only private sector housing bank in the country (the other housing bank in Oman is state-owned). The Bank's shares are widely held by around 4,000 shareholders. It is supervised by the Central Bank of Oman and is governed by the regulations under the banking law applicable to commercial banks.

AHB is licensed to provide long-term housing loans and a wide range of retail banking services, but is excluded from other commercial banking business. According to the rating agency, AHB's present strategies focus on providing housing loans in Oman for which there is good demand and it does not intend to expand its branch network or provide full-fledged consumer banking services as its small size (total assets of US$102mn at end 2001) does not justify the substantial investment that this would entail.

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