Omani banks reveal over RO56mn exposure to troubled Darvesh Group firms

Published 25 Jan,2021 via Muscat Daily - Omani banks on Monday revealed combined exposure of at least RO56.1mn to the troubled firm AbouNabil LLC and other related companies of Darvesh Group.

The local banks announced their credit exposures to Darvesh Group after the Muscat Securities Market (MSM) instructed all the listed financial institutions to disclose their exposures to the companies related to this group.

Sohar International Bank disclosed that its aggregate exposure to Darvesh Group amounts to RO13.921mn, equivalent to approximately 0.38 per cent of the bank’s total assets.

‘This is to inform the market that as on December 31, 2020 Sohar International has a legacy outstanding direct exposure to AbouNabil LLC to an extent of RO10mn. Further, the bank has a legacy outstanding direct exposure to Technova LLC, an associate company of AbouNabil LLC, to an extent of RO3.921mn,’ Sohar International said in a disclosure to the MSM.

‘While it had already made loan impairment provisions to a sizeable extent, the bank is exploring all the options and measures for recovering its exposure, including enforcement of the charged securities and the partners’ guarantees,’ Sohar International added.

Oman Arab Bank (OAB) and its subsidiary Alizz Islamic Bank disclosed that Darvesh Group companies deal with the two banks and have availed credit facilities in total amount of RO23.4mn.

As per the OAB’s disclosure filed to the MSM, OAB has exposure to AbouNabil LLC, Gulf Star LLC, Mega Muscat International LLC and Technova LLC, while Alizz Islamic Bank has exposure to AbouNabil LLC. ‘OAB and Alizz Islamic Bank further advise that provisions have been allocated to such an exposure as per the applicable rules and regulations in the sultanate,’ OAB said.

Bank Muscat, the largest financial institution in the sultanate, revealed that its total exposure to Darvesh Group is RO3.1mn.

‘We would like to inform the market that Bank Muscat has an exposure totalling RO2.1mn to AbouNabil LLC. The bank has also another exposure totalling RO1mn to another related company of Darvesh Group,’ Bank Muscat said in a filing to the local bourse.

Ahli Bank also said that it extended total credit facilities of RO6.3mn to two companies of Darvesh Group. ‘We would like to inform that Ahli Bank has extended credit facilities of RO3.711mn to AbouNabil LLC. The bank has also extended credit facilities of RO2.588mn to Gulf Star LLC, which is guaranteed by AbouNabil LLC,’ Ahli Bank said in its disclosure to the MSM.

HSBC Bank Oman’s total exposure to Darvesh Group amounted to RO2.77mn which includes RO1.95mn exposure to AbouNabil LLC and RO0.82mn exposure to Gulf Star LLC, according to the bank’s disclosure to the Omani bourse.

On the other hand, National Bank of Oman (NBO) informed the market that it has no direct exposure to AbouNabil LLC. However, NBO said, as of January 24, 2021, it has exposures to the UAE-based Elegant Industries LLC and Megastar Industries Co LLC, which are part of Darvesh Group, with a combined outstanding amount of AED62.99mn (approximately RO6.6mn).

‘The exposures were categorised as non-performing loans in 2018 and are covered by approximately 20 per cent by way of the mortgaged property and the balance exposure has been fully provided for in line with applicable regulatory requirements and standards,’ NBO added in its disclosure.

Bank Nizwa informed the Muscat Securities Market that it has no direct or indirect exposure to AbouNabil LLC or its related companies.

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