Bank Muscat Exposure to Dubai - US$50 Million

OR19.25 million as per announcement on BSE.  Roughly US$50 million.

Not a major issue.  At 30 September 2009 the bank had OR709 million in shareholders funds.  It earned OR 20 million in 3Q09.

A bit of background on exposure of Bank Muscat and its Bahrain affiliate, Bank Muscat International,  to Saad/AlGosaibi.  If you look at Note #5 page 9 in the 3Q09 financials provided via the link above, you'll see a major increase in loans on which interest is being reserved from OR72.4 million  to OR196.6 million.  But this is only 5% or so of total loans.  And the loan loss reserve ("LLR")  covers 81% of this amount so the net uncovered amount is a mere 4% of equity. 

The Central Bank of Oman runs a rather tight ship - which is one of the reasons why Bank Muscat International in Bahrain was set up.  Expect additional provisions at Bank Muscat in 4Q09 to top up the LLR.