Gonu inflicts damage on Oman’s banking sector

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Oman’s residents rebuild after strong winds and flooding from cyclone Gonu wreaked havoc last month. (Mohammed Mahjoub/AFP/Getty Images)

Cyclone Gonu left a trail of destruction in Oman in the first week of June, but it also damaged the banking and finance sector.

Damage caused by the cyclone, and the effects of virtually shutting down most industries for three days, cost the Sultanate's economy between US$3.24 bn and $3.89 bn, according to the Ministry of National Economy. The cost of suspending trading on the Muscat Securities Market (MSM), and the value of claims faced by Oman's insurers, are not yet known.

Several of Oman's banks reported damage to their branches as a result of strong winds and flooding caused by Gonu.

A spokesperson for BankMuscat, Oman's largest bank, said that 10 of the bank's branches had been forced to remain closed for repairs.

BankMuscat's home finance division in Baituna was also temporarily moved to its office in the Muttrah Business District.

Fortunately, the bank had established a business continuity programme (BCP) in 2003, having appointed BCP specialists Insight Consulting.

Said Al Badai, BCP committee chairman, BankMuscat, said: "Even before the cyclone hit the Sultanate, we worked in teams on various scenarios, so that we were prepared for the worst.

"Once the cyclone's impact on the Sultanate was known, we assessed its impact and invoked the bank's Crisis Management Plan based on the assessment."

Al Badai added: "As part of the process, we reached out to people - within the organisation and to our customers nationwide - to advise them of the preparations we had made."

By June 13, 95% of the bank's branches were operational and 171 of its 233 ATMs were available to customers.

Among Oman's other banks, Oman Arab Bank's branch in Qurum was flooded, as were several of its ATMs.

Abdulqader Al Bulushi, assistant general manager, banking operations, Oman Arab Bank, said: "We did not know [cyclone Gonu] would be that severe, but we had plans and already shifted our staff to the Al Khuwayr branch."

He added that the bank had already replaced all of its damaged ATMs.

A spokesman for Bank Dhofar said the bank had not calculated a value for the damage caused to its branches, but that it operated a back-up site in Salalah and had been able to maintain its systems.

The bank told Muscat Securities Exchange that it had suffered only minor interruptions in service, due to problems with power and communications connections, but added: "The resultant loss on account of the referred operational interruptions is very insignificant and is covered by insurance."

In other news, BankMuscat announced that it will donate OMR3 million (US$7.8m) to the Ministry of Social Development and the Oman Charitable Organisation to help rehabilitate people across the Sultanate who have been affected by the cyclone.

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