Four Oman banks in top-50 of the region

Muscat: Four of Oman’s leading banks have found a place in Forbes Middle East’s 50 Most Valuable Banks 2023.

Bank Muscat at the 22nd spot leads the rankings that were revealed by Forbes Middle East on Monday while Sohar International Bank is at the 45th place and is followed by Bank Dhofar (46th) and National Bank of Oman at the 47th rank.

The inclusion of four Oman banks in the ranking of the region’s Top 50 underlines the growing strides made by the quartet.

With a market cap of $75 billion, Saudi Arabia’s Al Rajhi Bank is the largest in the region. Saudi National Bank and Qatar’s QNB Group round up the top three, with $56.4 billion and $42.8 billion in market cap, respectively. Collectively, these three companies have a valuation of $174.2 billion, accounting for nearly 32 per cent of the total list.

Forbes Middle East gathered data from listed stock exchanges in the Arab world and ranked companies based on their reported market value as of February 28, 2023. The 50 banks have an aggregate market value of $548.1 billion.

The report indicated that Bank Muscat is listed on three stock exchanges – Muscat, Bahrain and London – with a market value of US$5.7 billion.

Established in 1982, Bank Muscat operates in six countries, with 173 branches in Oman, one branch each in Saudi Arabia and Kuwait, and three representative offices in the UAE, Singapore, and Iran.
The bank is the largest in Oman by total assets, which stood at $33.2 billion in 2022. It has 2.4 million customers. In October 2022, the bank sold its 27.29% stake in SICO Capital KSA (previously Muscat Capital) and acquired an additional 2.76 per cent stake in SICO Bahrain, increasing its stake to 13.14 per cent.

The market value of Sohar International Bank was reported as $1.19 billion, while Bank Dhofar had a market value of $1.18 billion, and the National Bank of Oman had a market value of $1.1 billion.
Sohar International Bank operates through a network of 30 commercial branches and nine Islamic branches in Oman. In November 2022, it established a branch in Riyadh, which is expected to be operational in 2023.

In February 2023, Sohar International Bank received approval from the Central Bank of Oman for its proposed merger with HSBC Oman, which is expected to complete in the second half of 2023.

BankDhofar provides corporate, retail, and investment banking activities through a network of 75 branches, including 11 branches of its Islamic banking arm, Maisarah Islamic Banking Services. In October 2022, it completed the issuance of US$300 million in additional tier 1 bonds by way of a private placement to investors.

The bank’s net profits increased by 36 per cent in 2022 to record $91 million. It had total assets of $11.5 billion as of the end of 2022.

NBO was established in 1973 to provide conventional and Islamic banking services. It serves over 500,000 retail customers and 25,000 corporate and SME customers through 66 branches. The bank has two overseas branches in the UAE. In November 2022, it completed the issuance of $134.1 million in additional tier 1 capital securities.

The bank had total assets worth $11.2 billion in 2022. The Commercial Bank of Qatar and the Omani billionaire Suhail Bahwan are among the bank’s major shareholders, with 34.9 per cent and 14.75 per cent stakes, respectively.

The report stated that this year has been a tough one for the global banking sector, with the collapse of Silicon Valley Bank sparking fears of a contagion effect. “However, to date, MENA’s banks appear immune to the financial unrest thanks to solid liquidity buffers, low-cost and stable customer deposits, and a lack of exposure to failed U.S. banks,” it noted.

A report by Moody’s also affirmed that ‘GCC banks are resilient to the US banks’ distress, thanks to broad franchises and their sovereign footprint’.

The report also referred to the rapid growth of Islamic finance across GCC banking systems, adding that deposits at these banks are lower cost than at conventional banks and support the banks’ profitability at times of high-interest rates.

Forbes’ list of the region’s most valuable banks features entities from 10 markets. GCC banks dominate with 41 entries, representing 82 per cent of the list.

Overall, Saudi Arabia and the UAE are home to the most banks on the list, with ten entries each, constituting 40 per cent of the ranking.

Saudi Arabia’s 10 most valuable banks have an aggregate market value of $223.5 billion. The UAE’s 10 entries are worth US$121.2 billion, Qatar’s eight banks have a market value of $81.3 billion, Kuwait’s seven entries are worth $76.2 billion and Oman’s four banks are worth $ 9.17 billion.