NBO plans to raise upto $300m in bond sale

The bank plans to mobilise fund by way of a bond sale in the overseas markets, which will boost the bank’s core capital

MUSCAT: National Bank of Oman (NBO) plans to mobilise up to $300 million additional (tier one) capital by way of a bond sale in overseas markets. The bank has mandated five financial institutions to arrange investor meetings starting on Thursday for the potential capital boosting bond sale.

NBO has mandated Bank of America-Merrill Lynch, Citigroup, Credit Agricole CIB, National Bank of Abu Dhabi and Standard Chartered for the potential offering, the bank said in a stock market filing. The dollar-denominated bond will boost the bank’s tier 1 or core capital. June approved the issuance of a tier 1 instrument of up to $300 million.

Market sources said that Omani banks need additional capital for achieving a fast growth. The Central Bank of Oman has asked banks to raise its capital adequacy ratio by 0.625 per cent every year until 2018 to reach 14.5 per cent, which is in line with Basel III requirement. The present regulatory requirement of capital adequacy is 12.65 per cent, which include a buffer of 0.65 per cent. lion, from OMR37.1 million for the same period last year.

Net interest income and income from Islamic financing grew by 16 per cent to OMR69.2 million for the January-September period this year, fromOMR59.9 million a year earlier. NBO reported growth in net loans, advances and financing activities, which rose 12 per cent to OMR2.53 billion by endSeptember, 2015, compared with OMR2.26 billion for the same period a year ago.