Moody's downgrades five Omani banks: BankMuscat, Oman Arab Bank, National Bank of Oman, Bank Dhofar and HSBC Bank Oman SAOG

 
Jessica Morris
Follow Jessica
Prince Harry Visits Oman - Day 1
Oman is a small exporter of crude (Source: Getty)

Credit ratings agency Moody's has downgraded five Omani banks, having slashed the country's credit rating last month due to low oil prices.

Moody's downgraded the long-term deposit rating of BankMuscat, Oman Arab Bank, National Bank of Oman, Bank Dhofar and HSBC Bank Oman. It also kept their ratings under review for downgrade.

The banks can no longer rely on the Omani government as a safety net if they get into difficulty, because the state's finances have been pummelled by low oil prices, Moody's said.

It comes as Oman's banks face an increasingly tough business environment, amid reduced investment, liquidity and consumer confidence.

Moody's downgraded Oman's credit rating and kept it on review for a further downgrade last month, saying the country's financial cushion to help it weather low oil prices is smaller than some of its richer neighbours.

The agency cut its oil price forecasts last month. It now expects Brent crude, the global benchmark, to average about $33 per barrel in 2016 before rising to $38 a year later.

Related articles