Thursday, February 22
02:48 PM

Fitch Affirms Sohar International’s ratings at ‘BB’


Muscat – Fitch Ratings has affirmed Sohar International Bank’s Long-Term Issuer Default Ratings (IDRs) at ‘BB’ with a stable outlook. Fitch has also upgraded Sohar International’s Viability Rating (VR) to ‘bb’ from ‘bb-‘ and removed it from Rating Watch Positive (RWP).

The upgrade of Sohar International’s Viability Rating reflects the positive impact on its credit profile from its merger with HSBC Bank Oman, Fitch said in its rating action statement.

HSBC Bank Oman was dissolved, and all of its assets and liabilities were transferred to Sohar International on August 17, 2023.

Fitch has upgraded Sohar International’s Long-Term IDR (xgs) to ‘BB(xgs)’ from ‘BB-(xgs)’ in line with the VR upgrade, affirmed its Short-Term IDR (xgs) at ‘B(xgs)’, and withdrawn both ratings, as they are no longer considered relevant to the agency’s coverage.

The rating agency mentioned that Sohar International’s Long-Term IDR is driven by its ‘bb’ VR and underpinned by potential support from the Omani authorities, as reflected in its ‘bb’ Government Support Rating (GSR).

‘The Viability Rating balances the bank’s improved business profile, expanded deposit franchise, and adequate capitalisation against moderate but improving profitability and stabilising asset quality,’ the rating agency noted.

Fitch further stated, ‘Sohar International’s franchise strengthened considerably by becoming Oman’s second-largest bank, with a market share of 16% by total assets at the end of Q3 2023. This will translate into increased pricing power and a stronger footprint in lower-risk segments, particularly in large multinational corporates, where HSBC Bank Oman used to be well-established.’

Sohar International’s stronger branch network will boost its loan-distribution and deposit-collection capabilities, the rating agency noted.

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