The Business Year

Faisal Mohamed Al Yousef

OMAN - Economy

Faisal Mohamed Al Yousef

Chairman, Muscat Finance

Bio

Faisal Mohamed Al Yousef is a Chartered Certified Account (FCCA, UK) with a bachelor of science degree in economics from the School of Oriental and African studies, UK. He worked with Ernst and Young as an audit specialist before becoming the CEO of Al Yousef Group LLC. He represents the Al Yousef Group on the boards of various investee companies as deputy chairman of Cactus Premier Drilling Services SAOC, Truckoman Oil and Gas Services SAOC, and Al Ruwad International School. Presently, he is also a board member of Bank Dhofar and Al Anwar Investments.

Muscat Finance has been able to build the right foundations to capture growth opportunities for the long term even in difficult times.

As the Sultanate posted over 10% GDP growth in 4Q2021, what trends have you spotted in the financial private sector?

With the country being predominately hydrocarbon revenue dependent, and oil prices rising, this will naturally help the government move closer to balancing its fiscal deficit. The government will be in a better position to pay off the amount due on all completed projects. The entire banking and leasing sectors were affected by the credit crunch caused by the decline in oil prices. The government, as the primary economic growth driver for many years in the country, was undergoing pressure due to the decline in oil revenue, which caused a significant rise in budget deficit from 2016 onwards. The government had to take drastic measures in order to sustain the long economic development plan for the country and its people. These avenues included increased taxes and the introduction of VAT and took severe austerity measures. Whilst there are always positive and negatives with all these measures, we rely on the patience of the Omani citizens and the educated among us to explain how these measures in fact will bring more prosperity in the long term. For example, VAT taxes were added mostly for discretionary items. It is time for us to think, should we be spending all these amounts on goods which we could do without. As most of these goods are imported, in fact, this is our wealth being transferred to other nations. More importantly, 2021 marks the commencement of the next five-year plan (2021-2025). Oman can now embark and speed up the investments that are planned in order to bring economic growth and prosperity to the whole nation in a more balanced way, as there is a greater focus on the individual. Investment in education and health system also take prominence in the plan and 2040 vision. This is very important, because like we have seen the speed at which many industries and economies globally have been disrupted, it is only with the right education that we will be able to capture these trends and react early and in the right way. The private sector is expected to take a more active role on all these fronts. Through bringing more balance to prosperity across the nation, vision 2040 and the first five-year plan has a focus on regional development.

How relevant are the short to medium-term objectives for Muscat Finance in terms of the challenges of COVID-19?

IT investments are no longer a discretionary choice, they are a necessity and are the basic requirement to continue in any business. IT touches various aspects of business; assists from a control point of view and produces economies of scale and creates cost leadership position in the product offering. The IT sector is also essential in improving data mining. Leading global companies such as Google, Facebook and Uber have data as their unique competitive advantage. They anticipate the trends in behaviours of the consumer, and they take advantage of these by offering bespoke advertising and pricing on a specific product offering and at the maximum price of the consumer’s demand curve. Muscat Finance aims to work in a healthy, profitable and balanced ecosystem. The loan book of banks has been falling since 2016, since the drop of oil prices. With the financial crisis, and with the aim of maintaining the loan book, banks have been trying to seek good quality credit. Therefore, instead of lending traditionally to finance leasing companies (FLCs), banks started to lend directly to FLCs customers. This affected Muscat Finance and other FLCs. There is an opportunity for Muscat Finance to work with banks and take over the “toxic assets” from their loan book so that banks can rebuild their capital base through release of provisions for these assets. Muscat Finance can also benefit, since from a long-term point of view these assets will increase in value. Muscat Finance has always taken a long term prospective. We are here for the long term, and there is no doubt that the banking and finance sector will emerge strong from the current crisis.

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