Moody’s cuts Oman banking outlook on weaker support

Bloomberg

The outlook for Oman’s banking sector was cut to negative by Moody’s Investors Service to reflect a reduction in the government’s ability to support the country’s banks, weaker economic growth and tightening liquidity.
“We expect a softening in Oman’s operating environment, with fiscal consolidation amid prolonged oil price weakness weighing on economic growth,” Moody’s analyst Mik Kabeya said. “This will weigh on the credit growth which Moody’s expects would fall to 5 percent in 2017 from 10.1 percent in 2016.”
The change from stable comes after Moody’s last month cut the rating of the sultanate to the second-lowest investment grade, saying its progress toward addressing structural vulnerabilities to a weak oil price environment has been more limited than expected. Oman has a sub-investment grade status at S&P Global Ratings.