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BankMuscat all set to raise RO 96.7 million from rights issue

MUSCAT, 4 July 2012 – BankMuscat, the flagship financial institution in the Sultanate, is all set raise RO 96.7 million from a rights issue aimed at enhancing Tier 1 capital. The Bank is offering 226.5 million shares at 0.427 baisa per share comprising a nominal value of Bzs 100, premium of Bzs 325 and issue expense of Bzs 2 per share.

The rights issue will be open from 9 July to 23 July with the record date being 2 July. Each existing shareholder as on the record date is entitled to subscribe to 1 new share for every 8 shares held by him / her.

The proceeds of the issue will be utilised by the Bank for financing growth resulting from the credit expansion following general economic growth in Oman; capitalising Islamic banking business and enhancing capital adequacy ratio to enable readiness for adoption of Basel III when introduced.

The Bank announced the rights issue at an investor meet hosted at Muscat Securities Market (MSM)). The meeting addressed by senior Management Team also discussed the Bank's strategy, business growth and capital position. The meeting was attended by shareholders, investors, the media and analysts from brokerage and investment companies.

The BankMuscat panel led by Ahmed Al Abri, Chief Operating Officer (COO), included Sulaiman Al Harthy, Group General Manager – Islamic Banking, Abdullah Al Hinai, DGM - Investment Banking, T. Ganesh – Chief Financial Officer, and Sheikha Al Farsi – AGM - Financial Control, Strategy and Planning. The CFO made a presentation on the rights issue and business strategy of the Bank.

Presently, the Bank's authorised share capital stands at RO 250 million, consisting of 2,500,000,000 (Two billion five hundred million) shares. Of this, 1,812,009,497 (One billion eight hundred twelve million nine thousand four hundred ninety seven) shares have been issued and fully paid-up. Following the rights issue, the issued and paid-up capital will be 2,038,510,684  shares with a nominal value of Bzs 100 each.

BankMuscat is fully geared to launch Meethaq Islamic banking window operations, subject to CBO approval. The Board of Directors has approved a capital allocation of up to RO 150 million for Meethaq operations. The Bank has also announced a 3-member Shariah board comprising respected Shari'ah scholars in Islamic finance.

Meethaq seeks to commence operations in Q3 2012 and plans a network of 7 branches at launch during the first year of operations. The branch network will be expanded from time to time subject to business viability as well as profitability margin on overall Meethaq portfolio.

By virtue of its wide distribution network and long track record, BankMuscat has built a strong 38.03 per cent market share of total banking assets and 34.37 per cent market share of total banking credit in Oman as on 31 March 2012.

BankMuscat has the highest investment grade credit rating assigned to any Omani bank of A-, A1, A- and A  from all the four major rating agencies - Standard and Poor's, Moody's, Fitch Ratings and Capital Intelligence - respectively.

The members of existing senior management team have been with the Bank for more than 10 years. The senior management has a proven track record of driving organic growth and integrating acquired businesses. The experience and depth of the Bank's management team has been a key factor in achieving and maintaining leadership position in the Omani banking market.