BankMuscat Leads Decline Among Lenders on Rate Cut: Muscat Mover
BankMuscat SAOG (BKMB), Oman’s biggest lender by assets, fell the most in more than a week after the country’s central bank cut interest rates on personal loans.
The shares tumbled 3.2 percent, the most since March 18, to 0.577 Omani rial at the 1 p.m. close in Muscat. Bank Dhofar SAOG (BKDB) slid 3.3 percent to 0.550 rial, the lowest level since March 12. The benchmark MSM30 Index (MSM30) retreated 1.5 percent, the most since Aug. 9, to 5,826.22. About 2.6 million shares of BankMuscat traded today, the most this month.
“Clearly if you look at the banking sector, it had an immediate reaction to the central bank’s announcement,” said Kanaga Sundar, head of research at Gulf Baader Capital Markets SAOC in Muscat. The decision may have a “short- to medium-term impact on the profitability of banks,” he said by phone today.
The central bank said in a statement yesterday it lowered the interest rate ceiling on personal loans by 1 percentage point to 7 percent “to reduce the financial burden on the borrowers and to encourage banks to offer more credit.”
The regulator also approved in principle the merger between Oman International Bank SAOG (OIBB)’s business with Oman’s operations of HSBC Holdings Plc. Oman International shares fell 0.4 percent to 0.281 rial.
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