The bank's admission comes after similar disclosures from Bank Muscat in Oman and Mashreqbank in the UAE.
NBO reveals loans to Saad and Al Gosaibi
The National Bank of Oman (NBO), the country's second-largest lender by assets, Sunday became the latest regional bank to reveal its lending exposure to the Saudi family trading groups at the centre of an international credit default crisis. The bank's admission comes after similar disclosures from Bank Muscat in Oman and Mashreqbank in the UAE.
"NBO has a limited inter-bank exposure totalling approximately 6.5 million Omani rials (Dh62.6m) to The International Banking Corporation (Bahrain) and Awal Bank (Bahrain) only," the bank said in a statement to the Muscat stock exchange yesterday. It stressed that it did not have outstanding loans to other related companies. The turmoil at the Al Gosaibi and Saad groups, two of the region's largest family-run conglomerates, has spread throughout Gulf markets as banks have moved to limit their exposure to both companies after their accounts were frozen in Saudi Arabia last month.
The International Banking Corporation, owned by Ahmad Hamad Al Gosaibi and Brothers (AHAB), was the first to default on part of its payments last month. That set off a chain reaction that culminated in AHAB admitting "substantial irregularities" at its financial services subsidiary earlier this month. Awal Bank is an affiliate of the Saad Group, owned by Maan al Sanea. The NBO said it was "confident the concerned governments and regulators would ? ensure an orderly settlement of obligations". The bank did not say whether it would take out provisions on its loan exposure.
Last week, Mashreqbank said it was in discussions with the Saad and Al Gosaibi groups about restructuring loans made to the companies. Earlier, Bank Muscat disclosed it had an overall exposure of about 66m Omani rials to the two companies. Shares in the NBO fell 1.3 per cent in Muscat yesterday. @Email:firstname.lastname@example.org