Bank Muscat to raise share capital for growth

Oman's Bank Muscat, the best-performing stock among the Gulf's 20 biggest lenders this year, said on Saturday it plans to raise share capital for the first time in almost two years to help finance expansion.

The lender, which posted its second consecutive record profit in the second quarter, was looking at several options including selling shares to existing stockholders or selling Global Depositary Receipts (GDR) during the three months ending Dec. 31, Ganesh Thangavel, head of finance, told Reuters.

"Our growth is such that we need to raise more capital, probably in the fourth quarter," Thangavel said from Muscat. He declined to say how much the bank might be looking for or give more details about the options.

Omani central bank rules require that lenders' capital adequacy ratio, the ratio of a bank's capital to its risk-weighted credit exposure, be no less than 10%. Bank Muscat is at 11.4%, Thangavel said.

"We'd like to be 2 to 3 percent higher than that," Thangavel said.

The bank last raised share capital in October 2005, when it sold $165 million of GDRs, Thangavel said.

Bank Muscat's biggest shareholders, with more than 10% each, are the Royal Court and Sheikh Mustahil Ahmed Al Mashani Group.

Bank Muscat shares are up 38% this year.

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