Bourse
is still one of the most developed in the region
The financial services
sector will play a key role in the transition of the Omani economy.
The country has a relatively sophisticated mix of commercial banking
institutions, offering state-of-the-art products and services, plus
one of the most progressive capital markets in the region, the Muscat
Securities Market. Though stocks have been hit hard in recent years,
as in most other markets worldwide, the bourse remains one of the most
developed and open in the GCC.
Indeed, transparency is one of the major assets of the local
financial sector. While neighbouring states like Saudi Arabia and Dubai
have suffered some fallout from the recent crackdown on money laundering,
but Oman’s reputation is not only intact, it is growing. Much of
the credit for this rests with the Central Bank of Oman’s regulatory
prowess.
The bank has helped maintain a steady economic course, with low
inflation and a stable currency. The rial has boosted investor confidence
even during difficult times, and has a strong influence over the local
banking community.
HE Hamood Sangour Al-Zadjali, the Bank’s Executive President, says
that greater transparency, stringent disclosure and capital adequacy
requirements provide an environment for stability and growth. “The
strong regulatory, supervisory and legal framework for the financial
institutions, which are already in place, are in our favour for developing
Oman as a key financial centre,” he says.
The country’s banks certainly need support if they are to
thrive in the fast changing GCC market. The big names on the Omani scene
– the likes of Bank Muscat, Oman International Bank (OIB) and National
Bank of Oman, which together control some 70 per cent of the domestic
market – are already venturing further afield. These institutions
are among the Gulf’s elite, with an eye for innovation and service
delivery. The opening of the GCC market and WTO accession offer many
opportunities to such quality organisations.
John Carlough, OIB’s Chief Executive, believes that the
liberalisation of the Gulf market will be good for Oman’s banking
sector. OIB has been a pioneer in areas such as online and telephone
banking, and boasts a fully automated network of around 85 branches
throughout the country, the largest in Oman. It also has an established
presence in key markets such as India and Pakistan.
He believes 2003 will be a year of consolidation for the bank and maximising
existing assets. “Overseas expansion will come in the long term
once the consolidation factor is achieved,” he says.