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Moody’s Investors Service reaffirmed Global Scale Rating to Al Omaniya Financial Services (AOFS). The company has been assigned Ba3 long-term local and foreign currency issuer ratings. The rating carries stable outlook. Moody’s notes that AOFS ratings reflect (i) AOFS’s good profitability, asset quality and capitalisation. (ii) Its niche position as one of the leading companies in the relatively small Omani leasing sector. (iii) Its conservative risk appetite and basic yet effective risk management procedures. Moody’s further notes the rating are constrained by AOFS’s reliance on wholesale funding as well as its monoline status and increased competitive pressure on its franchise. Moody’s further notes that with total asset size of RO 142 million (US$ 369 million) as at end-June 2011, AOFS is the largest NBFC in Oman with an estimated market share of around 25%. AOFS operates in a highly competitive market and competes directly with the five other specialized leasing companies, but also with largest domestic banks that offers similar products. Although AOFS competes directly with the large Omani banks it continues to leverage its expertise developed over 14 years of operations as a specialized lender and its partnership with all major suppliers of capital goods and automobiles in Oman for which it is usually the lender of choice for their customers. Moody’s further notes that capitalization remains strong and is one of the key factors supporting AOFS ratings. In terms of asset quality AOFS maintains a relatively low number of NPAs at 1.8% of total leased assets as at end-June 2011. Provisioning coverage stood at a high 243% at end June 2011, providing strong protection to AOFS’ equity. Mr. Aftab Patel, Chief Executive Officer of AOFS further stated that it was indeed gratifying to note Moody’s reaffirmation of company’s global scale ratings. AOFS is the only NBFC rated on the Global Scale and is the largest NBFC in the country. The company has performed well in the year 2011 and is expected to maintain its dividend earnings. The company has achieved an asset size of RO 148.7 million and net profit of RO 3.2 million as of 30 September 2011. Further the company expects to grow significantly in profitability, and business volume in the year 2011. AOFS is not only the largest in asset size but also highest in net worth, largest in market capitalisation, lowest in non-performing assets and highest in profitability amongst all NBFCs in the country. During the first quarter of 2012, the company proposes to issue compulsorily convertible bonds of RO 10 million to its existing shareholders, which will be converted into equity shares within a span of 5 years, converting 20% every year. This issuance will help AOFS meets the CBO capital requirements as well as fund future growth and maintain capitalisation at good levels.
PRESS STATEMENT ISSUED BY MR. AFTAB PATEL, CEO AL OMANIYA FINANCIAL SERVICES SAOG |
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MOODY’S REAFFIRM GLOBAL SCALE Ba3 RATING FOR AL OMANIYA FINANCIAL SERVICES FOR THE YEAR 2012
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