The Oman national scale assigned to Muscat Finance Company (MFC) showed continuous stability of ratings at omBBB long-term and omA3 short-term, reported Capital Intelligence (CI).

According to CI, the ratings are backed by well-capitalized balance sheet and by the consistently good returns achieved over time. “The diversification in funding by a first bond issue in the first half of 2013 is also seen as a positive, as is the receipt of new medium-term funding lines from banks outside Oman. Although leverage is forecast to continue to rise as business volumes grow, it should remain in a range that is considered comfortable for a non-bank finance company (NBFC).”

Moreover, the CI highlighted that “Having been established 27 years ago, MFC has a good position in the Omani finance market with a good brand and national coverage via its six branch offices, even though it is smaller in balance sheet and portfolio size than some of its five NBFC competitors.”

Meanwhile, despite the surge in non-performing loans (NPLs) in the first half of 2014, the main factors on the rating are size and funding base, although liquidity is satisfactory by industry standards, the ratings agency added.