National Finance Company – National Ratings Affirmed

(MENAFN- Capital Intelligence Ltd) 12 November 2026

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed the Long- and Short-Term issuer ratings of National Finance Company SAOG (NFC or the Company) on the Oman National Scale at ‘omA’ and ‘omA1’, respectively. The Outlook on the ratings is Stable.

The ratings are supported by NFC’s franchise as the largest non-bank financing institution (NBFI) in Oman, sound capitalisation and debt service capacity, good profitability, and a well-diversified lender base. Other factors supporting the ratings are the strength of its largest shareholder – the financially sound Ominvest – as well as NFC’s strong and experienced management team. While direct shareholder support has not been needed or demonstrated to date, ordinary support is expected to be available; Ominvest has a good record in this respect for ordinary support for other companies and banks in which it has major holdings.

The main credit challenges are the relatively small Omani market, strong competition from banks for both SME and consumer lending, and the narrowness of NFC’s business model. The latter in part reflects the regulatory limits that still impact NBFIs on both sides of the balance sheet, notwithstanding some easing of restrictions in recent years. Other challenges relate to still weak financing asset quality metrics, moderately high construction sector exposure, a degree of concentration in funding sources and a structural reliance on contractually short-term bank funding. Although the Iran and US/Israel conflict has elevated geopolitical risk across the entire GCC region, Oman’s geographical location has spared it from most of the direct negative effects to date, and the economy has been performing well.

CI Ratings’ baseline scenario assumes a protracted conflict between the US/Israel and Iran, but one that does not escalate into a full-scale regional war. For financing and investment companies in Oman, the direct impact is likely to be more contained, reflecting the country’s comparatively lower exposure to regional capital flow volatility, and the lack of non-Omani exposures at Omani NBFIs. Indirect risks may arise through tighter external funding conditions or higher risk premia, particularly for entities reliant on cross-border financing, including to some extent for NFC. Downside risks would increase if the conflict is prolonged, or if it resulted in sustained disruptions to the Omani economy, although the latter appears unlikely at present.

Given its well-established franchise and stated business strategies, the Company is likely to maintain its leading position and market share in the finance and leasing sector in Oman. NFC’s financing receivable (FR) book remains skewed towards the non-retail segment. That said, NFC plans to continue to grow its retail book with a focus on salaried individuals as well as further expand small-ticket and SME financings (selectively to low-risk customers) to enhance portfolio diversification. In the corporate segment, it remains focused on existing customers that have demonstrated a sound credit history and cash flow metrics over a long period. There remains some concentration towards the wider services and construction sectors – with performance of companies in the latter showing some volatility; historically, these sectors have been key contributors to non-performing financing receivable (NPFR) accretion. Non-consumer financings are largely collateralised. By facility type, the largest proportion of financings, as in previous years, consisted of lending for new and used vehicles. The new business generation has been supported by the continued economic growth in Oman, notwithstanding the conflict between the US/Israel and Iran.

Headline financing asset quality metrics softened in Q3 26, breaking a gently improving trend over the three preceding years. This was, however, largely due the movement of a single large account from Stage 2 to Stage 3. The rise in Stage 3 exposures outpacing the increase in financing-loss reserves also reflected in reduced NPFR coverage in the interim periods, which however remains moderate. The level of provisioning required under IFRS 9 reflects a business model where almost all non-retail financing is extended on a secured basis. Both the NPFR ratio and loss coverage remained better than those of its NBFI peers. Stage 2 FRs rose during 2024-25 but declined this year to a still moderately high 12% of gross financings at end-Q3 26. This is appreciably higher than the two other CI-rated NBFI peers but slightly lower than the average for the banking sector in Oman. The restructured book remains sizeable, and also a major contributor to Stage 2 FRs. These restructured accounts largely represent government-sponsored schemes for borrowers affected by the Covid-19 pandemic.

Funding is fairly comfortable and managed reasonably well. Its lender panel includes foreign banks and a multilateral development institution; however, there are some large individual bank lines. NFC has longstanding relationships with Omani banks, and a fairly large proportion of the short-term facilities have been renewed annually for a number of years. Continued growth in corporate deposits is not expected to materially alter NFC’s funding profile in the short term given regulatory limitations. Liquidity is satisfactory given the sizeable level of undrawn but committed lines and the maturity profile of outstanding FRs.

The Company reinforced capital in 2024 through the issuance of perpetual bonds. Subsequently, both leverage and debt to equity ratios slipped in 2025 and over the first nine months of FY26, but they remain comfortable. The ratio of unprovided NPFRs to equity rose slightly to 19.1% at end-Q3 26, reversing a decline to 12.5% at end-2025. Historically, the Company has a generous dividend payment policy, which has constrained its internal capital generation rate. Capital flexibility is considered sound given its ability to replenish by issuing further perpetual bonds and/or subordinated debt and the probable availability of ordinary support from shareholders.

Both operating and net profit further improved in 2025 and for 9M 26 on the back of continued financing growth as well as a wider net financing differential. ROAA also improved and was the second-highest among CI-rated NBFI Omani peers. With the recent resumption of monetary policy tightening by the Central Bank of Oman, the financing differential could soften in the short term given that its largely fixed-rate existing lending is funded by floating-rate borrowings. That said, continued new business generation with a focus on higher-yielding financings will remain supportive of both margins and earnings potential. The proportion of operating profit consumed by risk provisioning has trended upwards since 2024; this is likely to continue in light of the growing FR book and still substantial book of Stage 2 financings.

Rating Outlook

The Stable Outlook indicates that NFC’s ratings are unlikely to change over the next 12 months, unless there is further significant movement in financing asset quality metrics. The Outlook also reflects our view that current heightened geopolitical tensions in the region will not significantly impact NBFI operations in Oman, including those of NFC.

Rating Dynamics: Upside Scenario

An upward revision in the ratings would at a minimum require a very significant improvement in asset quality metrics. An upgrade in the sovereign rating, coupled with an upward revision in the Operating Environment Risk Anchor (OPERA)/industry assessment, could possibly also put some upward pressure on the ratings, but this would not be automatic.

Rating Dynamics: Downside Scenario

NFC’s ratings could be either placed on a Negative Outlook or lowered by one notch if Oman’s sovereign ratings were to be lowered. In the absence of such a downward sovereign action, the Company’s ratings or outlook could still be lowered, should asset quality significantly weaken in terms of a sharp rise of the NPFR ratio and/or the level of Stage 2 FRs.


About the Ratings

The credit ratings have been issued by Capital Intelligence Ratings Ltd, P.O. Box 53585, Limassol 3303, Cyprus.

The following information sources were used to prepare the credit ratings: public information and information provided by the rated entity. Financial data and metrics have been derived by CI from the rated entity’s financial statements for FY2022-25 and Q3 26. CI may also have relied upon non-public financial information provided by the rated entity and may also have used financial information from credible, independent third-party data providers.

CI considers the quality of information available on the rated entity to be satisfactory for the purposes of assigning and maintaining credit ratings. CI does not audit or independently verify information received during the rating process.

The principal methodologies used to determine the ratings are the Non-Bank Financial Institutions Rating Methodology, dated 27 April 2022, and the National Scale Ratings Criteria for Oman, dated 4 April 2025 (see Information on rating scales and definitions, the time horizon of rating outlooks, and the definition of default can be found at Historical performance data, including default rates, are available from a central repository established by ESMA (CEREP) at

This rating action follows a scheduled periodic (annual) review of the rated entity. Ratings on the entity were first released in August 2017. The ratings were last updated in November 2025. The ratings and rating outlook were disclosed to the rated entity prior to publication and were not amended following that disclosure. The ratings have been assigned or maintained at the request of the rated entity or a related third party.


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