32103 - Bank Muscat Eq CF

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Summary of Investment Information

Project Number

32103

Company Name

BANK MUSCAT SAOG

Date SPI Disclosed

Feb 20, 2013

Country

Oman

Region

Middle East

Projected Board Date

Dec 20, 2012

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Nov 30, 2016

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Jan 17, 2013
Signed : Mar 13, 2013
Invested : May 8, 2013

Sector

Commercial Banking - General

Project Description

The proposed project consists of straight equity investment in Bank Muscat (“BM” or the “Bank”), the leading bank in Oman. The Bank is a universal bank providing corporate, retail, investment, treasury, private banking and asset management services to over one million clients through the largest branch network in the country.

The new investment is aimed at strengthening the capital base of BM for the future growth, and supporting its housing, SME and Islamic finance operations in Oman.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	0.0
Equity	82.50

Development Impact

The project is expected to have strong development impact by: (1) increasing access to finance for SMEs in a sub-region/country where SMEs have exceptionally limited access to finance; (ii) increasing access to finance for women entrepreneurs; (iii) supporting job creation sectors as SMEs account for around 10-40% of all jobs in MENA; (iv) facilitating broad economic and social impact as the increased level of home ownership (especially among young prospective home owners) will contribute to improve living standards in the country and lead to greater social support; (v) promoting regional integration & knowledge sharing through advisory services.

The project will support the capitalization need of the largest Bank in the country and support its growth plans. It will help the Bank to further enhance and adopt best practices in environment and sustainability issues; further institutionalize its shareholding and further improve its corporate governance standards. In addition, IFC''s capacity-building advisory services for SME banking will enable BM to scale their SME banking operations in Oman in an effective and sustainable manner, making them a role model for the MENA region.

E&S Category Rationale / Risks and Mitigation

The proposed project is an IFC straight equity investment in BM to strengthen the capital base of the bank and aims to support SMEs, housing lending and the Bank’s regional expansion. BM is a universal bank and provides financial services to retail, SME, and large corporate clients. Corporate lending accounts for more than 50% of the total portfolio in key sectors which could have environmental and social impacts. The project, therefore, has been categorized as FI-1 in accordance with IFC’s Environmental and Social Review Procedure. The Bank will screen all lending and investment activities against the IFC Exclusion List, and the bank’s lending and investment activity will require their customers’ compliance with the host country environment and social laws and regulations. In case of project and long term corporate finance BM will screen these transactions against the IFC Performance Standards and will require its clients, based on results of this screening, to apply relevant requirements of the Performance Standards (available at http://www.ifc.org/PerformanceStandards). In addition BM (including the relevant subsidiaries/entities under managerial control, and overseas branches) will comply with the requirements of IFC’s PS2 on Labor and Working conditions.

The main E&S risks and impacts of this equity investment relate to BM having adequate systems and capacity in place to manage the operations being financed in accordance with applicable requirements, including compliance with the IFC’s Exclusion List, Host Country Laws and Regulations, and the IFC Performance Standards in case of project and long term corporate finance.

BM has an Environmental and Social Management System (“ESMS”) in place for SME lending, and has designated staff members from SME department with overall responsibility for implementation of the ESMS. The ESMS will be expanded to cover all lending and investment activities of the Bank including the relevant subsidiaries/entities under managerial control, and overseas branches. This will include assigning responsibility to relevant staff members or departments for E&S compliance and providing training to staff involved in ESMS implementation. BM''s HR Practices are in general in conformity with IFC''s PS2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

T. Ganesh
Financial Controller
PO Box 134, Ruwi, P.C. 112, Sultanate of Oman
E-mail:mailto:ganesht@bankmuscat.com
Telephone: +968 44 768 241
Fax: +968 24 784 776

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Title & Description	Anticipated Completion Date
Nominate officers
Formalize procedures
Develop guidelines
Upgrade Applicable requirements
Staff Training
Provide documentation of HR Practices and Prepare Training Plan for all relevant staff	10/22/2013

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