The stable outlook primarily reflects the rating agency's expectations of stable macroeconomic conditions that will support low levels of non-performing loans (NPLs) and healthy levels of capitalisation and earnings, said a press statement.
In addition, sound liquidity buffers, supported by a stable deposit funding base also underpin the stable outlook.
These supportive factors will continue to offset potential shocks from an unexpected drop in oil prices and risks stemming from high borrower concentrations, opacity surrounding local conglomerates and real-estate sector exposures.
Moody's says that stable macroeconomic conditions will lead to credit growth of around 10 per
While Moody's expects that structural challenges related to high single-party borrower concentration levels, real-estate exposures and limited transparency surrounding local conglomerates will continue to leave banks susceptible to event risks, it also acknowledges that the banks possess sizable cushions to protect against unexpected losses.
Moody's says that the Omani banks will maintain sound capital buffers over the next 12-18 months, as internal capital generation will largely match asset growth of 10 per
The Omani banking system will remain primarily deposit-funded and liquid over the outlook period.
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