Moody's upgrades AHB's ratings: outlook positive

Moody's Investors Service has upgraded the long-and short-term foreign currency deposit ratings of Alliance Housing Bank (AHB) to Baa1/P-2 with a positive outlook, from Baa2/P-3. In addition, AHB's long- and short-term local currency deposit ratings have been upgraded to Baa1/P-2 with a positive outlook, from Baa2/P-3.

These recent rating actions follow Moody's recent upgrade of Oman's foreign and local currency country ceiling for bonds and bank deposits to A3/P-2, with a positive outlook, from Baa1/P-2.

Keith Scott, General Manager of Alliance Housing Bank proudly stated,

"Our commitment to our customers and our shareholders is central to everything we do at AHB. This acknowledgement of our secure position of strength reinforces the promises we make our customers everyday - we are solid, stable and trustworthy organisation".

Moody's believes that although AHB does not fall within the "too important to fail" category from a systemic perspective, the authorities would nevertheless provide support to the bank in the event of need, and thus a high degree of support is imputed in the ratings. At the end of September 2006, Alliance Housing Bank had total assets of OMR165.4 million (USD430.7 million)

In the past, the Omani authorities have supported domestic banks in difficulty although there is no explicit guarantee to do so, and Moody's does not anticipate any change in that policy over the medium term.
Nevertheless, any future upgrade of the rating ceiling for Omani bank deposits would not automatically result in a corresponding increase in any of the banks' ratings for deposits.

The AHB ratings changes are as follows:

• The long-and short-term foreign currency deposit ratings upgraded to Baa1/P-2, with a positive outlook, from Baa2/P-3.
• The long-and short-term local currency deposit ratings upgraded to Baa1/P-2, with a positive outlook, from Baa2/P-3.
• The D-financial strength rating remains unchanged.

Keith Scott concluded, "These upgrades are testament to the bank's perseverance, dedication and hard work. We look forward to continued growth and strength and will continue to provide the people of Oman with superior housing finance solutions."