Moody's on June 8 assigned Baa3/Prime-3 long- and short-term local- and foreign-currency deposit ratings to Bank Nizwa SAOG.
The outlook on the long-term deposit ratings is stable. Moody's also assigned the bank long- and short-term counterparty risk assessments of Baa2(cr)/Prime-2(cr) and baseline and adjusted baseline credit assessments of "b1".
The baseline credit assessment reflects Bank Nizwa's high capital buffers, moderated by rapid growth in recent years. The rating also reflects the bank's low profitability attributable to its new franchise, its concentrated funding profile, its limited liquid resources and its evolving risk management framework, Moody's added.
The Baa3 long-term deposit ratings reflect the "b1" baseline credit assessment combined with a "very high" probability of government support if needed, the rating agency added. The government of Oman indirectly owns an 11.9% stake in the bank, Moody's noted, adding that Omani authorities have historically supported banks in need.