June 10, 2009 / 9:32 AM / 11 years ago

Bank Muscat faces provisions on Saad, Gosaibi -analyst

MANAMA, June 10 (Reuters) - Oman’s Bank Muscat BMAO.OM is likely to book provisions during the second quarter on its exposure to troubled Saudi groups Saad and Al-Gosaibi, an analyst said on Wednesday.

A spokesman for Bank Muscat declined to comment.

The note by Sunil Dhall, vice-president of Gulf Baader Capital Markets, is the latest sign the groups’ problems could affect banks across the Gulf Arab region.

Saad Group, a $30 billion empire built by Saudi billionaire Maan al-Sanea, is restructuring its debt, including the debt of its Bahrain-based subsidiary Awal Bank, after it ran into liquidity difficulties. [ID:nN0167288]

“The Bahrain subsidiary (Bank Muscat International) had exposures to Saad Group and Al-Gosaibi,” Dhall said in a note issued on Wednesday.

“Central banks are likely to ask them to classify that as bad debt. In case things improve, they can write it back.”

Dhall said he expected shares in Bank Muscat to fall below 0.700 rials if such an announcement is made by the bank.

Shares in the bank closed at 0.765 rials on Tuesday.

Saudi group Ahmad Hamad Al Gosaibi Group & Brothers (AHAB), which owns a majority stake in Bahrain-based The International Banking Corporation (TIBC), is also restructuring its debt. (Reporting by Frederik Richter; Additional reporting by Saleh Al-Shaibany in Oman, editing by Will Waterman)

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