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Rating Action:

Moody's takes rating actions on seven Omani banks and one finance company

19 Mar 2018

Rating actions follow downgrade of the Omani government rating

Limassol, March 19, 2018 -- Moody's Investors Service ("Moody's") has downgraded the long-term local and foreign currency deposit ratings of five Omani banks: Bank Muscat SAOG (Bank Muscat) (to Baa3 from Baa2), HSBC Bank Oman SAOG (HBON) (to Baa3 from Baa2), Oman Arab Bank (SAOC) (OAB) (to Ba1 from Baa3), Bank Sohar SAOG (Bank Sohar) (to Ba1 from Baa3) and Bank Nizwa SAOG (Bank Nizwa) (to Ba2 from Ba1). At the same time, Moody's has affirmed the long-term local and foreign currency deposit ratings of Bank Dhofar SAOG (Bank Dhofar) (at Baa3) and National Bank of Oman Limited (SAOG) (NBO) (at Baa3). Moody's has maintained a negative outlook on the long-term ratings of the seven banks.

At the same time, Moody's has downgraded the baseline credit assessments (BCAs) and adjusted BCAs of five Omani banks: Bank Muscat (to baa3 from baa2), Bank Dhofar (to ba2 from ba1), NBO (to ba2 from ba1), OAB (to ba2 from ba1) and Bank Sohar (to ba3 from ba2). In addition, Moody's has affirmed the BCA of HBON (at ba1) and its adjusted BCA (at baa2). Moody's has affirmed the BCA and adjusted BCA of Bank Nizwa (at b1).

Moody's has also today affirmed the Ba3 corporate family rating and the B1 issuer rating of Al Omaniya Financial Services SAOG (Al Omaniya), and maintained the negative outlook on the ratings.

These actions follow Moody's downgrade of the Government of Oman's issuer rating to Baa3 with a negative outlook, from Baa2 with a negative outlook, on 16 March 2018. The sovereign action reflects Moody's expectation that (i) Oman's fiscal and external metrics will continue to weaken, in part reflecting institutional and policy constraints, and (ii) subdued economic growth in the country over the next few years will undermine the economy's ability to absorb shocks. Please see "Moody's downgrades Oman's rating to Baa3, outlook negative"; https://www.moodys.com/research/Moodys-downgrades-Omans-rating-to-Baa3-outlook-negative--PR_380719.

A full list of affected ratings is at the bottom of the press release.

RATINGS RATIONALE

-- DOWNGRADES AND AFFIRMATION OF DEPOSIT RATINGS REFLECT LOWER GOVERNMENT SUPPORT CAPACITY, LOWER PROBABILITY OF SUPPORT FOR SOME BANKS AND LOWER MACRO PROFILE

The downgrade of the long-term deposit ratings of five rated Omani banks reflects, to differing degrees, a combination of (i) the Omani government's weakened fiscal capacity to support the local banks in case of need, as indicated by the downgrade in the sovereign rating, (ii) Moody's assessment of a lower probability of government support for some banks, reflecting the expectation that the sovereign may become more selective in providing support as its credit strength reduces, and (iii) the sensitivity of some banks' standalone profiles (BCAs) to a weakening operating environment, as captured by Moody's lowering of its Macro Profile for Oman to "Moderate-" from "Moderate".

The affirmation of the long-term deposit ratings of two rated Omani banks reflects the fact that even with a lower government capacity to support these banks, Moody's continued assessment of a very high likelihood of support now leads to two notches of government support uplift for these banks.

-- DOWNGRADES AND AFFIRMATION OF BASELINE CREDIT ASSESSMENTS REFLECT RESPECTIVE SENSITIVITY TO LOWERING OF OMAN MACRO PROFILE

The downgrade of the standalone profile (BCA) of some Omani banks reflects the sensitivity of their BCAs to a weakening operating environment, as captured by Moody's lowering of its Macro Profile for Oman to "Moderate-" from "Moderate". The change in the Macro Profile for Oman reflects Moody's expectation of subdued economic growth over the next few years, which will undermine the ability of the economy to absorb potential shocks. Factors constraining GDP growth will include oil production cuts as part of the OPEC agreement and the impact of government spending rationalisation on the non-hydrocarbon growth. The change in the Macro Profile also reflects Moody's view of institutional and policy constraints to a faster adjustment to lower oil prices.

The affirmation of the standalone profile (BCA) of some Omani banks reflects the resilience of their standalone credit profile to a weaker operating environment, which is captured by the lowering of the Macro Profile to "Moderate-" from "Moderate".

Details regarding the BCA sensitivities are given in the bank specific sections below.

-- NEGATIVE OUTLOOKS REFLECT THE NEGATIVE OULOOK ON THE SOVEREIGN RATING COMBINED WITH STANDALONE PRESSURE AT ONE BANK

Moody's decision to assign a negative outlook to the Omani banks' long-term deposit ratings reflects (i) the potential further weakening in the Omani government's strength and support capacity, as reflected by the negative outlook on the government's issuer rating, and (ii) the potential that Moody's could further reassess its assumptions regarding the government's willingness to support some of the country's banks. In addition, for Bank Dhofar, the negative outlook continues to reflect potential pressures on its standalone credit strength, arising from the bank's modest capitalisation and rapid credit growth over recent years.

The negative outlook on Al Omaniya's ratings continues to reflect the potential negative impact from tight liquidity conditions and softer economic growth on the company's liquidity and solvency profile.

-- BANK-BY-BANK SUMMARY OF ACTIONS

- Bank Muscat SAOG (Bank Muscat)

Moody's downgraded Bank Muscat's long-term deposit rating to Baa3 from Baa2, and downgraded its BCA and adjusted BCA to baa3 from baa2. At the same time, the rating agency has maintained the outlook on the bank's long-term deposit ratings at negative.

The downgrade of Bank Muscat's long-term deposit ratings reflects (i) the Omani government's weakened fiscal capacity to support the bank in case of need, as indicated by the downgrade in the sovereign rating, and (ii) the sensitivity of the bank's standalone profile (BCA) to Moody's lowering of its Macro Profile for Oman to "Moderate-" from "Moderate". The absence of government support uplift for the bank's deposit rating, despite Moody's assessment of a 'very high' likelihood of government support in case of need, reflects the positioning of the bank's BCA at the same level as the sovereign rating.

The downgrade of the BCA to baa3 from baa2 reflects the sensitivity of the bank's standalone credit profile to a weaker operating environment, which is captured by the lowering of Oman's Macro Profile to "Moderate-" from "Moderate". Moody's expects the bank's concentrated funding base to pose a risk in a tight funding environment. However, the bank's baa3 BCA also reflects its solid asset quality, sound capital (16.4% tangible common equity/risk-weighted assets at end-2017) and ample liquidity buffer, as well as its healthy profitability (1.5% net income/ tangible assets at end-2017) underpinned by a dominant domestic franchise (over 35% domestic asset market share).

The negative outlook on the bank's long-term deposit ratings reflects the potential reduction in the Omani government's creditworthiness and support capacity, reflected in the negative outlook on the sovereign rating.

- HSBC Bank Oman SAOG (HBON)

Moody's has downgraded HBON's long-term deposit rating to Baa3 from Baa2, and affirmed its adjusted BCA at baa2 and its BCA at ba1. At the same time, the rating agency has maintained the outlook on the bank's long-term deposit ratings at negative.

The downgrade of HBON's long-term deposit ratings reflects the Omani government's weakened strength, as indicated by the downgrade of the sovereign rating. The absence of government support uplift for the bank's deposit rating, despite Moody's assessment of a 'high' likelihood of government support in case of need, reflects the positioning of the bank's adjusted BCA above the sovereign rating.

The affirmation of the baa2 adjusted BCA reflects Moody's continued assumption of a 'high' probability of parental support for HBON from its ultimate parent HSBC Holdings Plc (A2 long-term senior unsecured debt rating, outlook negative) in case of need. This assessment translates in a two-notch uplift from the bank's ba1 BCA, reflecting HBON's strategic fit within the HSBC group, which has management control and brand name association with the group.

The affirmation of the BCA at ba1 reflects the resilience of the bank's standalone credit profile to a weaker operating environment, which is captured by the lowering of the Macro Profile to "Moderate-" from "Moderate". The bank's ba1 BCA reflects its solid asset quality, sound loss-absorption buffers (14.5% tangible common equity/risk-weighted assets at end-2017) and strong liquidity level (37.7% liquid assets/ tangible banking assets at end-2017). These strengths are moderated by high asset concentrations and relatively low profitability.

The negative outlook on the bank's long-term deposit ratings reflects the potential reduction in Oman government creditworthiness (reflected in the negative outlook on the sovereign rating).

- Bank Dhofar SAOG (Bank Dhofar)

Moody's affirmed Bank Dhofar's long-term deposit rating at Baa3, and downgraded its BCA and adjusted BCA to ba2 from ba1. At the same time, the rating agency has maintained the outlook on the bank's long-term deposit ratings at negative.

The affirmation of the long-term deposit ratings reflects the fact that even with a lower government capacity to support the bank, Moody's continued assessment of a very high likelihood of support now leads to two notches of government support uplift for the bank.

The downgrade of the BCA to ba2 from ba1 reflects the sensitivity of the bank's standalone credit profile to a weaker operating environment, which is captured by the lowering of the Macro Profile for Oman to "Moderate-" from "Moderate". Moody's expects the bank's asset quality to weaken gradually. In addition, the bank will continue to exhibit construction sector exposure (14% of gross loans), a noticeable portion of unseasoned exposure following rapid growth over recent years, as well as modest capitalisation (10.9% tangible common equity/risk-weighted assets at end-2017). However, the bank's ba2 BCA also reflects its solid profit generation, modest market funding reliance (10.3% market funds/ tangible banking assets at end-2017) and sound liquidity buffers, reflecting access to large government-related deposits.

The negative outlook on Bank Dhofar's long-term deposit ratings reflects the potential reduction in Oman government support capacity (reflected in the negative outlook on the sovereign rating) and/or support willingness. In addition, the negative outlook on Bank Dhofar's ratings continues to reflect potential pressures from its modest capitalisation and rapid growth over recent years.

- National Bank of Oman Limited (SAOG) (NBO)

Moody's affirmed NBO's long-term deposit ratings at Baa3, and downgraded its BCA and adjusted BCA to ba2 from ba1. At the same time, the rating agency has maintained the negative outlook on the bank's long-term deposit ratings.

The affirmation of the long-term deposit ratings reflects the fact that even with a lower government capacity to support the bank, Moody's continued assessment of a very high likelihood of support now leads to two notches of government support uplift for the bank.

The downgrade of the BCA to ba2 from ba1 reflects the sensitivity of the bank's standalone credit profile to a weaker operating environment, which is captured by the lowering of the Macro Profile to "Moderate-" from "Moderate". Moody's expects the bank's asset quality to continue to weaken (3.5% problem loans/gross loans at end-2017), while the bank continues to maintain modest liquid resources and a concentrated funding base. However, the bank's ba2 BCA reflects its solid asset quality, sound capitalisation (13.1% tangible common equity/risk-weighted assets at end-2017) and healthy profitability.

The negative outlook on NBO's long-term deposit ratings reflects the potential reduction in Oman government support capacity (reflected in the negative outlook on the sovereign rating) and/or support willingness.

- Bank Sohar SAOG (Bank Sohar)

Moody's downgraded Bank Sohar's long-term deposit ratings to Ba1 from Baa3, and downgraded its BCA and adjusted BCA to ba3 from ba2. At the same time, the rating agency has maintained the negative outlook on the bank's long-term deposit ratings.

The downgrade of Bank Sohar's long-term deposit ratings reflects (i) the Omani government's weakened fiscal capacity to support the bank in case of need, as indicated by the downgrade in the sovereign rating, (ii) Moody's lowering of its assessment of probability of government support for the bank to 'high' from 'very high', reflecting the expectation that the sovereign may become more selective in providing support as its credit strength reduces, and (iii) the sensitivity of the bank' standalone profile (BCA) to a weakening operating environment, as captured by Moody's lowering of its Macro Profile for Oman to "Moderate-" from "Moderate". The lower assessment of the probability of government support for Bank Sohar reflects Moody's assessment of the relative systemic importance of the bank, with a 8% deposit market share and a 33% direct and indirect government ownership (when including only government related shareholders that are part of the top 10 shareholders).

The downgrade of the BCA to ba3 from ba2 reflects the sensitivity of the bank's BCA to a weaker operating environment. Moody's expects the Bank Sohar to continue to exhibit rapid growth and credit concentrations, combined with high reliance on market funding (26.3% market funds/ tangible banking assets at end-2017) and modest liquid resources (21.5% liquid assets/ tangible banking assets at end-2017). However, the bank's ba3 BCA also reflects the bank's sound profitability supported by a strong corporate franchise, combined with modest capitalisation (10.5% tangible common equity/risk-weighted assets at end-2017).

The negative outlook on Bank Sohar's long-term deposit ratings reflects the potential further reduction in Oman government support capacity (reflected in the negative outlook on the sovereign rating) and/or support willingness.

- Oman Arab Bank (SAOC) (OAB)

Moody's downgraded OAB's long-term deposit ratings to Ba1 from Baa3, and downgraded its BCA and adjusted BCA to ba2 from ba1. At the same time, the rating agency has maintained the negative outlook on the bank's long-term deposit ratings.

The downgrade of OAB's long-term deposit ratings reflects (i) the Omani government's weakened fiscal capacity to support the bank in case of need, as indicated by the downgrade in the sovereign rating, (ii) Moody's lowering of its assessment of probability of government support for the bank to 'high' from 'very high', reflecting the expectation that the sovereign may become more selective in providing support as its credit strength reduces, and (iii) the sensitivity of the bank' standalone profile (BCA) to a weakening operating environment, as captured by Moody's lowering of its Macro Profile for Oman to "Moderate-" from "Moderate". The lower assessment of the probability of government support for OAB reflects Moody's assessment of the relative systemic importance of the bank, with a 8% deposit market share and an absence of government ownership.

The downgrade of the BCA to ba2 from ba1 reflects the sensitivity of the bank's BCA to a weaker operating environment. Moody's expects OAB to maintain modest profit generation and modest liquid resources. However, the bank's ba2 BCA also reflects its sound asset quality, which benefits from its conservative approach and association with Arab Bank PLC (LT LC bank deposits Ba2 Stable, BCA ba2), its sound capitalisation (12.6% tangible common equity/risk-weighted assets at end-September 2017) and its low market funding (1.5% market funds/ tangible banking assets at end-September 2017).

The negative outlook on OAB's long-term deposit ratings reflects the potential reduction in Oman government support capacity (reflected in the negative outlook on the sovereign rating) and/or support willingness.

- Bank Nizwa SAOG (Bank Nizwa)

Moody's downgraded Bank Nizwa's long-term deposit ratings to Ba2 from Ba1, and affirmed its BCA and adjusted BCA at b1. At the same time, the rating agency has maintained the negative outlook on the bank's long-term deposit ratings.

The downgrade of Bank Nizwa's long-term deposit ratings reflects (i) the Omani government's weakened fiscal capacity to support the bank in case of need, as indicated by the downgrade in the sovereign rating, (ii) Moody's lowering of its assessment of probability of government support for the bank to 'high' from 'very high', reflecting the expectation that the sovereign may become more selective in providing support as its credit strength reduces, and (iii) the sensitivity of the bank' standalone profile (BCA) to a weakening operating environment, as captured by Moody's lowering of its Macro Profile for Oman to "Moderate-" from "Moderate". The lower assessment of the probability of government support for Bank Nizwa reflects Moody's assessment of the relative systemic importance of the bank, with a 2% deposit market share and a 12% direct and indirect government ownership.

The affirmation of the BCA at b1 reflects the resilience of Bank Nizwa's BCA to a weaker operating environment. Bank Nizwa's b1 BCA reflects the bank's solid capital buffers (18.0% tangible common equity/risk-weighted assets at end-September 2017), moderated by rapid growth (40% as of September 2017 year-on-year); relatively low profitability, reflecting its developing franchise; concentrated funding profile; limited liquid resources (14.7% liquid assets/ tangible banking assets at end-September 2017); and an evolving risk-management framework.

The negative outlook on Bank Nizwa's long-term deposit ratings reflects the potential reduction in Oman government support capacity (reflected in the negative outlook on the sovereign rating) and/or support willingness.

-- AFFIRMATION OF AL OMANIYA'S RATINGS; OUTLOOK REMAINS NEGATIVE

The affirmation of Al Omaniya's B1 issuer rating reflects its solid franchise in asset and working capital loans to corporates that supports its profitability, combined with a strong asset quality and high capitalisation (26.6% tangible common equity standing to tangible managed assets ratio at end-2017). However, the company's relatively weak funding and liquidity moderate these strengths.

The affirmation of the firm's Ba3 CFR reflects an unchanged one-notch uplift based on Moody's assessment of a high probability of affiliate support from Bank Muscat in case of need, reflecting the longstanding strong financial and operational ties between the two companies, with BankMuscat being Al Omaniya's primary lender.

The company's negative outlook continues to reflect the potential impact from tighter liquidity conditions and softer economic growth on the company's credit profile, given the firm's reliance on secured confidence sensitive wholesale funding.

WHAT COULD CHANGE THE RATINGS -- UP

Upwards pressure on the banks' ratings is limited given the negative outlook on their ratings.

A stabilisation in the Omani government's issuer rating outlook could lead to a stabilisation in the banks' rating outlooks.

In addition, for Bank Dhofar, a material improvement in capitalisation buffers combined with resilience of asset quality metrics could lead to a stabilisation of the ratings.

For Al Omaniya, continued resilience of the liquidity and funding metrics amidst the current tightening environment could also lead to a stabilisation of the ratings.

WHAT COULD CHANGE THE RATINGS -- DOWN

Downward pressure on Omani banks' ratings could develop through: (1) a further weakening of the Omani government's capacity to provide support, as a downgrade of Omani government's issuer rating would imply, and/or (2) Moody's reassessment of the willingness of the government to provide support, which could result from a downgrade of the Omani government's issuer rating.

Downward pressure on Al Omaniya's ratings could develop through a combination of: (1) a significant deterioration in the firm's funding and liquidity metrics and/or (2) a material weakening in the company's solvency metrics.

LIST OF AFFECTED RATINGS

Issuer: Al Omaniya Financial Services SAOG

Affirmations:

....LT Corporate Family Ratings, Affirmed Ba3, Outlook remains Negative

....LT Issuer Ratings, Affirmed B1, Outlook remains Negative

Outlook Actions:

....Outlook, Remains Negative

Issuer: Bank Dhofar SAOG

Downgrades:

....Adjusted Baseline Credit Assessment, Downgraded to ba2 from ba1

....Baseline Credit Assessment, Downgraded to ba2 from ba1

....LT Counterparty Risk Assessment, Downgraded to Baa3(cr) from Baa2(cr)

....ST Counterparty Risk Assessment, Downgraded to P-3(cr) from P-2(cr)

Affirmations:

....LT Bank Deposits, Affirmed Baa3, Outlook remains Negative

....ST Bank Deposits, Affirmed P-3

....Senior Unsecured MTN Program, Affirmed (P)Baa3

Outlook Actions:

....Outlook, Remains Negative

Issuer: Bank Muscat SAOG

Downgrades:

....LT Bank Deposits, Downgraded to Baa3 from Baa2, Outlook remains Negative

....ST Bank Deposits, Downgraded to P-3 from P-2

....Senior Unsecured Regular Bond/Debenture, Downgraded to Baa3 from Baa2, Outlook remains Negative

....Senior Unsecured MTN Program, Downgraded to (P)Baa3 from (P)Baa2

....Subordinate MTN Program, Downgraded to (P)Ba1 from (P)Baa3

....Adjusted Baseline Credit Assessment, Downgraded to baa3 from baa2

....Baseline Credit Assessment, Downgraded to baa3 from baa2

Affirmations:

....LT Counterparty Risk Assessment, Affirmed Baa2(cr)

....ST Counterparty Risk Assessment, Affirmed P-2(cr)

Outlook Actions:

....Outlook, Remains Negative

Issuer: Bank Nizwa SAOG

Downgrades:

....LT Bank Deposits, Downgraded to Ba2 from Ba1, Outlook remains Negative

....LT Counterparty Risk Assessment, Downgraded to Ba1(cr) from Baa3(cr)

....ST Counterparty Risk Assessment, Downgraded to NP(cr) from P-3(cr)

Affirmations:

....ST Bank Deposits, Affirmed NP

....Adjusted Baseline Credit Assessment, Affirmed b1

....Baseline Credit Assessment, Affirmed b1

Outlook Actions:

....Outlook, Remains Negative

Issuer: Bank Sohar SAOG

Downgrades:

....LT Bank Deposits, Downgraded to Ba1 from Baa3, Outlook remains Negative

....ST Bank Deposits, Downgraded to NP from P-3

....Adjusted Baseline Credit Assessment, Downgraded to ba3 from ba2

....Baseline Credit Assessment, Downgraded to ba3 from ba2

....LT Counterparty Risk Assessment, Downgraded to Ba1(cr) from Baa2(cr)

....ST Counterparty Risk Assessment, Downgraded to NP(cr) from P-2(cr)

Outlook Actions:

....Outlook, Remains Negative

Issuer: HSBC Bank Oman SAOG

Downgrades:

....LT Bank Deposits, Downgraded to Baa3 from Baa2, Outlook remains Negative

....ST Bank Deposits, Downgraded to P-3 from P-2

Affirmations:

....Adjusted Baseline Credit Assessment, Affirmed baa2

....Baseline Credit Assessment, Affirmed ba1

....LT Counterparty Risk Assessment, Affirmed Baa2(cr)

....ST Counterparty Risk Assessment, Affirmed P-2(cr)

Outlook Actions:

....Outlook, Remains Negative

Issuer: National Bank of Oman Limited (SAOG)

Downgrades:

....Adjusted Baseline Credit Assessment, Downgraded to ba2 from ba1

....Baseline Credit Assessment, Downgraded to ba2 from ba1

....LT Counterparty Risk Assessment, Downgraded to Baa3(cr) from Baa2(cr)

....ST Counterparty Risk Assessment, Downgraded to P-3(cr) from P-2(cr)

Affirmations:

....LT Bank Deposits, Affirmed Baa3, Outlook remains Negative

....ST Bank Deposits, Affirmed P-3

....Senior Unsecured Regular Bond/Debenture, Affirmed Baa3, Outlook remains Negative

....Senior Unsecured MTN Program, Affirmed (P)Baa3

Outlook Actions:

....Outlook, Remains Negative

Issuer: Oman Arab Bank (SAOC)

Downgrades:

....LT Bank Deposits, Downgraded to Ba1 from Baa3, Outlook remains Negative

....ST Bank Deposits, Downgraded to NP from P-3

....Adjusted Baseline Credit Assessment, Downgraded to ba2 from ba1

....Baseline Credit Assessment, Downgraded to ba2 from ba1

....LT Counterparty Risk Assessment, Downgraded to Baa3(cr) from Baa2(cr)

....ST Counterparty Risk Assessment, Downgraded to P-3(cr) from P-2(cr)

Outlook Actions:

....Outlook, Remains Negative

PRINCIPAL METHODOLOGIES

The principal methodology used in Al Omaniya Financial Services SAOG ratings was Finance Companies published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The principal methodology used in Bank Muscat SAOG, HSBC Bank Oman SAOG, Bank Dhofar SAOG, National Bank of Oman Limited (SAOG), Oman Arab Bank (SAOC), Bank Sohar SAOG and Bank Nizwa SAOG ratings was Banks published in September 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The Local Market analyst for Al Omaniya Financial Services SAOG, Bank Muscat SAOG, Bank Dhofar SAOG, National Bank of Oman Limited (SAOG), Oman Arab Bank (SAOC), Bank Sohar SAOG and Bank Nizwa SAOG ratings is Mik Kabeya, +971.4.237.9590.

The Local Market analyst for HSBC Bank Oman SAOG ratings is Olivier Panis, +971.4.237.9533.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

The person who approved Bank Muscat SAOG, HSBC Bank Oman SAOG, Bank Dhofar SAOG, National Bank of Oman Limited (SAOG), Oman Arab Bank (SAOC), Bank Sohar SAOG and Bank Nizwa SAOG credit ratings is Sean Marion, MD-Financial Institutions, Financial Institutions Group, JOURNALISTS: 44 20 7772 5456, Client Service: 44 20 7772 5454. The person who approved Al Omaniya Financial Services SAOG credit ratings is Carola Schuler, MD-Banking, Financial Institutions Group, JOURNALISTS: 44 20 7772 5456, Client Service: 44 20 7772 5454.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Christos Theofilou
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Sean Marion
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

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