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IFC Makes Its Largest Investment in Middle East and North Africa: A $100 Million Subordinated Loan to BankMuscat of Oman


In Dubai:
Azmat Taufique

Phone: +971-4-360-1001

E-mail:
Ataufique@ifc.org

Mouayed Makhlouf

Phone: +971-4-360-1009

E-mail:
Mmakhlouf@ifc.org

In Washington, D.C.:

Rita Jupe

Phone: +1(202) 458-8967

E-mail:
Rjupe@ifc.org


Washington, D.C. / Muscat June 10, 2006—The International Finance Corporation, the private sector arm of the World Bank Group, will provide a long-term subordinated loan of $100 million to BankMuscat SAOG, the largest commercial bank in the Sultanate of Oman, to strengthen its capital adequacy and to support growth of the bank’s long-term mortgage financing and its small and medium enterprise portfolio.  This will be IFC’s largest investment in the Middle East and North Africa region.

The transaction, signed by Michael Essex, director of IFC’s Middle East and North Africa Department, and Sheikh AbdulMalik bin Abdullah Al Khalili, chairman of BankMuscat, reaffirms IFC’s commitment to foster the development of a viable housing finance market in Oman, and in other countries of the Gulf Cooperation Council. The deal is also in line with IFC’s strategy to help GCC economies become less dependent on oil-related revenues.  In addition to the loan, IFC is providing technical assistance to help BankMuscat grow its small and medium enterprise business.

At the signing ceremony in Oman, IFC’s Essex, said, “There is a great demand for affordable, quality housing in Oman, especially for the middle-income group.  IFC’s long-term funding will help address this need.”

Essex added, “IFC technical assistance will help BankMuscat develop financial products and services for smaller businesses, which typically have difficulty obtaining loans.  As the private sector in Oman expands, this sector will become an important engine for job creation.”

BankMuscat’s Sheikh AbdulMalik bin Abdullah Al Khalili said, “Today is an extremely important day for us, as we have not only been able to win over, but also sign a seal of confidence—in BankMuscat—with an organization as distinguished as the International Finance Corporation.”

He added, “We are privileged to have IFC as our partner for both the mortgage finance and SME finance sectors. World over, a vibrant small-scale sector and strong demand for housing and real estate have proven to be vital growth engines for developing economies such as ours. With Oman rapidly integrating into the global economy, under the visionary leadership of His Majesty, Sultan Qaboos bin Said, we expect the same to happen in Oman as well.”

Speaking about the significance of this agreement, Sheikh AbdulMalik added, “We are especially honored, as this deal, the first with BankMuscat, is the single largest investment made by IFC in the region today. We are sure Oman will follow this trend and this will only be the start of a long and mutually beneficial relationship between our two organizations.”

This is IFC’s first transaction with BankMuscat.  Jyrki Koskelo, director of IFC’s Global Financial Markets Department, noted that the investment marks a beginning of IFC’s relationship with a reputable bank that could become a valuable partner in IFC’s initiatives in the Middle East and North Africa region.

About BankMuscat


BankMuscat is the largest commercial bank in Oman with OMR 2.0 billion ($5.2 billion equivalent) in assets, a loan portfolio of OMR 1.5 billion ($3.8 billion equivalent), and an equity base of OMR 290 million ($740 million equivalent).  The bank is rated investment grade by the major rating agencies, with long-term debt ratings of BBB (Standard & Poor’s), Baa1 (Moody’s), and BBB+ (Fitch Ratings).  Through its stake holding in other banks, BankMuscat operates in Bahrain and India and on its own, through a representative office, in the United Arab Emirates and is actively pursuing regional expansion in other Persian Gulf countries such as Qatar and Kuwait. The bank is expected to commence operations in the Kingdom of Saudi Arabia in the second half of 2006.  For more information, visit
www.bankmuscat.com

About IFC


The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C.  IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent.  Its 178 member countries provide its share capital and collectively determine its policies. The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org