Oman's NBO says exposed to troubled Saudi groups

MAAN AL-SANEA - Saudi billionaire built the now troubled Saad Group. (Getty Images)

National Bank of Oman, that country’s second-biggest bank by assets, admitted on Sunday that it has an exposure of 6.5 million rials ($17 million) to The International Banking Corp. and Awal Bank, part of the troubled Saad and Algosaibi Groups of Saudi Arabia.

The news came as the bank reported a 33 percent slump in Q1 profit as operating expenses rose.

''It is difficult at this stage to confirm any timelines, provisions if any we might have to take,'' the bank said Sunday in a statement to the Muscat bourse.

Earlier this month credit ratings agency Moody’s said surprise problems at Saad Group, which holds a major stake in the UK’s HSBC Bank, would affect the way it assesses privately-held firms across the Gulf Arab region.

Saad's woes have rattled a $30 billion empire built by billionaire Maan al-Sanea, and represent one of the biggest defaults to hit the Gulf Arab region since the onset of the financial crisis.

"The operating environment here in the region is a lot less stable and predictable than we thought it was, and that has implications for credit stability," Philipp Lotter, senior vice president at Moody's, told Reuters at the time.

"It will affect the way we assess certain companies operating in this environment."

Lotter's comments illustrate how Saad's problems and those of the Ahmad Hamad Al Gosaibi Group & Brothers (AHAB) have damaged confidence in a region already plagued with poor transparency, and how shockwaves from the situation could spread.

Saad Group recently said it would restructure its debt after it ran into unspecified difficulties, and the Saudi central bank froze the accounts of its billionaire chairman, Maan al-Sanea.

Meanwhile, Algosaibi, whose Bahrain-based The International Banking Corp defaulted last month, said on June 11 it found ''substantial irregularities'' at its financial-services unit.

Oman’s biggest bank, Bank Muscat, said earlier this month that Saad and Algosaibi owed the lender and its unit in Bahrain a combined 66 million rials.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM