Muscat, Oman, May 13, 2013—IFC,
a member of the World Bank Group, and IFC Capitalization Fund are investing
$195 million in Bank Muscat, the largest commercial bank in the Sultanate
of Oman, to support its capital base and increase access to finance for
small and medium enterprises and female entrepreneurs.
Smaller businesses account for over
80 percent of job creation in emerging markets and are key drivers of long-term
growth, according to a recent World Bank report. Surveys show that only
eight percent of SMEs in the Middle East and North Africa have a loan or
a line of credit—one of the lowest rates in the world. In Gulf Cooperation
Council countries, the share of SME loans is two percent.
“The past few years have been the most
challenging period for banks and financial institutions worldwide,” said
Sheikh Khalid bin Mustahail Al Mashani, Chairman of Bank Muscat. “However,
Bank Muscat has performed impressively, and in this context the equity
investment by IFC and IFC Capitalization Fund reflects yet another positive
initiative to identify new business opportunities.”
AbdulRazak Ali Issa, Chief Executive
of Bank Muscat, said: "Bank Muscat and IFC have enjoyed a long-term
strategic business relationship. This investment paves the way for expanding
access to finance to various segments of society, which will contribute
to the diversification and growth of the economy in Oman. It will also
enable us to share financial expertise and knowledge in the region.”
In addition to the equity investment,
IFC advisory services teams are working closely with the bank to broaden
access to finance for SMEs and female entrepreneurs and strengthen environmental
and social management, providing a model for developing economies in the
Middle East and North Africa.
“In a region facing the challenge of
unemployment, IFC’s investment will help provide much-needed access to
finance for SMEs, women entrepreneurs and for affordable housing,” said
Dimitris Tsitsiragos, IFC Vice President for Europe, Central Asia, Middle
East and North Africa. “This partnership for development will create a
model of innovation for others to follow."
Marcos Brujis, head of the IFC Capitalization
Fund, said, “We are pleased to partner with Bank Muscat and provide equity
capital to strengthen the bank’s capital adequacy in light of new Basel
III regulations.“We look forward to continue working with Bank Muscat
and supporting the further growth of the banking sector in the Middle East.”
Bank Muscat and IFC have enjoyed strong
relations since 2006, when IFC provided a $100 million subordinated loan
for the bank’s housing finance program and SME finance. In 2011, IFC Capitalization
Fund provided a further $170 million in subordinated debt to the bank.
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, mobilizing capital in international financial
markets, and providing advisory services to businesses and governments.
In FY12, our investments reached an all-time high of more than $20 billion,
leveraging the power of the private sector to create jobs, spark innovation,
and tackle the world’s most pressing development challenges. For more
information, visit www.ifc.org.
About IFC Asset Management Company
IFC Asset Management Company LLC, a
wholly-owned subsidiary of IFC, invests third-party capital, enabling outside
investors to benefit from IFC’s expertise in achieving strong equity returns
as well as positive development impact in the countries in which it invests.
It manages over $5.2 billion of capital across six investment funds including
IFC Capitalization Fund.
About IFC Capitalization Fund
The IFC Capitalization Fund is a global
equity and subordinated debt fund supported by commitments from IFC and
the Japan Bank for International Cooperation. It aims to strengthen banks
considered vital to the financial system of emerging markets.
About Japan Bank for International
Japan Bank for International Cooperation
(JBIC) is a policy-based financial institution wholly owned by the Japanese
government. JBIC has the purpose of contributing to the sound development
of Japan and the international economy and society, by taking responsibility
for the financial function to promote the overseas development and securement
of resources which are important for Japan, to maintain and improve the
international competitiveness of Japanese industries and to promote the
overseas business having the purpose of preserving the global environment,
while having the objective of supplementing the financial transactions
implemented by ordinary financial institutions. JBIC also provides the
financial services that are necessary to prevent disruptions to international
financial order or to take appropriate measures with respect to damages
caused by such disruption. For more information, visit www.jbic.go.jp/en.
About Bank Muscat
As a leading financial institution with
assets worth over $18 billion, Bank Muscat accounts for over 38 percent
of total banking assets and 34 percent of total banking credit in Oman.
Bank Muscat enjoys the highest investment grade credit rating assigned
to any Omani bank with A-, A1, A- and A from the four major rating agencies:
Standard and Poor’s, Moody’s, Fitch Ratings and Capital Intelligence,
respectively. Bank Muscat offers a complete range of innovative banking
products and services. The bank has an extensive network of 137 branches
in Oman, as well as direct and indirect presence in all six Gulf Cooperation
Council states, including a branch each in Saudi Arabia and Kuwait, as
well as an office in Singapore which focuses on financial institutions
and trade business. With the best and most knowledgeable team in the country,
Bank Muscat remains committed to providing a world class banking experience.