Omani banks are planning to raise their capital base to meet an anticipated asset growth on the back of better demand for credit. Two leading banks - BankMuscat and Bank Sohar - have already announced their plans, while others are expected to follow suit. BankMuscat said it is going to raise RO100 million through a rights offer sometime in the second quarter of this year.
The shares will be offered to the existing shareholders at a 20 percent discount to the market price. The rights issue is part of a capital planning process aimed at meeting the capital adequacy ratio in the medium term. The bank is anticipating a good growth in credit next year and it is getting ready for it. Several big ticket projects that were awarded towards the end of 2011 will reach implementation stage by early this year and the banks need additional capital to meet high demand for credit.
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