StanChart backs $12 bn worth of financing deals for Oman

FROM P13 expansion plant of Salalah Methanol Company ($727 million debt).

Significantly, financing commitments made by the bank during the first half of this year surpass those of last year by a sizable margin. “2016 was an active year as well, with StanChart participating in more than $7 billion worth of financing for the government and other GREs. We did transactions with the Ministry of Finance, and also supported Petroleum Development Oman (PDO) as Mandated Lead Arrangers for its $4 billion loan facility.”

Project finance is another segment of the market that has garnered keen interest from StanChart. “We have been very active in this space, having supported the financing of Independent Power and Water Projects in Oman. StanChart is also the structuring bank and MLA for the financing of the Sohar and Ibri Independent Power Projects (IPPs), currently under execution with a capital investment of around $1 billion apiece.”

Likewise, large family groups form a decent size of StanChart’s business in Oman, says the executive. “This is the time when we also see a lot of family groups that are well poised to expand, looking at distressed assets for possible acquisition. We are at the lower end of the actual cycle where you see a lot of distressed assets, with large family groups and to some extent pension funds, being the only ones in a position to pick up these assets.”

Following a revamp of its operations in Oman in line with a broader global strategy to focus on core competencies, StanChart exited from retail banking services in 2015. Its current focus is limited to corporate and SME banking space, the latter in keeping with CBO-mandated regulations requiring commercial banks to extend credit to small and medium businesses.

“We are very keen to support SMEs, but this is a space that needs to be specially monitored given the credit environment we are in,” said Al Yafai.

StanChart’s top executive in Oman is also keen to stress the lender’s unique position in the Sultanate as a collaborator alongside local Omani banks in meeting the diverse financing requirements of the local market.

“Contrary to misconception, we do not compete with local banks, rather we complement them. Local banks fall in a different kind of the banking space here in Oman. We do things that local banks cannot do and vice versa. They have a very strong Omani rial balance sheet, while we have very strong US dollar balance sheet coupled with a strong edge when it comes to technologies, know-how, top-ofthe-pyramid expertise and advisory capabilities with regard to capital markets, project finance in value added things that go hand-in-hand with the local banking community. Consequently, we bid for certain projects in partnership with local banks.”

Also working in StanChart’s favour is its status as one of Oman’s international banks that continues to leverage its global network space to deliver competitive financing solutions to large corporates that have an international presence.

“In Oman, international clients bank with us not only in Oman but also across our network, which gives us a solid edge over banks that service such clients only in a limited jurisdiction.”

2017 marks 50 years of StanChart operations in the Sultanate.