Mubasher: Bank Muscat, Bank Dhofar and National Bank of Oman are experiencing dual profitability pressures, increasing competition for financial products, according to a statement.

However, Moody's considers that Bank Muscat as the best positioned of the three to withstand these pressures, which are mainly attributed to slowing economic growth and the rapid penetration of Islamic finance.

"Low oil prices are continuing to pressure government revenues and weigh on business and consumer confidence," according to Mik Kabeya, an analyst at Moody's.

Bank Muscat will likely adapt to slowing credit demand as the ratings agency is expected to benefit from the possible higher proportion of private financing for government projects.

Both Bank Dhofar and Bank Muscat's fast growing Islamic windows are likely to help them to manage the penetration from Islamic finance.

On the other hand, National Bank of Oman's expansion in the UAE and its solid domestic conventional credit growth will support its asset base.

Moody's expects Islamic banking to reach 12%-15% of Omani banking assets by 2020.