Press Releases
print

IFC and IFC Capitalization Fund invest $195 million in Bank Muscat to Expand Access to Finance in Oman


In Cairo:
Riham Mustafa
Phone: +202 24 619 140
E-mail: RMustafa@ifc.org

In Washington, D.C.:
Serene Jweied
Phone: +1 (202) 473-8764
E-mail: SJweied@ifc.org


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.

About IFC
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 Cooperation
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.

Stay Connected
www.facebook.com/IFCwbg
www.twitter.com/IFC_org
www.youtube.com/IFCvideocasts
www.ifc.org/SocialMediaIndex