Oman’s Banking Sector Sees Growth in Credit and Deposits
In a recent report from the Central Bank of Oman, it was revealed that the country’s banking sector experienced a 2.9 percent rise in total credit, reaching 30.8 billion Omani rials ($80 billion) by the end of March. This growth is a positive sign for the economy and reflects confidence in the financial system.
Rise in Credit to the Private Sector
Credit to the private sector saw a 3.6 percent year-on-year increase, reaching 25.9 billion rials by the end of March. Non-financial corporations held the largest share of the total private sector credit at approximately 45.4 percent, followed closely by households at 45 percent. Financial corporations accounted for 5.8 percent, while the remaining 3.8 percent was allocated to other sectors.
Growth in Total Deposits
Total deposits held with other depository corporations saw a significant year-on-year growth of 11.7 percent, reaching 30.3 billion rials by the end of March. Additionally, total private sector deposits grew by 13.7 percent to 20.2 billion rials. This increase in deposits further indicates strong economic activity in Oman.
Composition of Private Sector Deposits
Household holdings contributed the most to private sector deposits at 49.8 percent, followed by non-financial corporations at 30.9 percent, financial corporations at 16.5 percent, and other sectors at 2.8 percent.
Growth in Conventional Banks
The combined balance sheet of conventional banks showed a year-on-year growth of 0.8 percent in total outstanding credit as of the end of March. Credit to the private sector increased by 1.6 percent, reaching 20.3 billion rials, while investments in securities surged by 28.0 percent to 5.7 billion rials.
Islamic Banks and Windows on the Rise
Simultaneously, Islamic banks and windows witnessed notable growth in total assets, financing, and deposits, highlighting their expanding role within the banking system. This growth further diversifies the banking sector in Oman.
Economic Outlook
Despite a decline of 2.8 percent in the nation’s nominal gross domestic product at the end of the fourth quarter of 2023, real GDP increased by 1.3 percent during the same period. The report also noted decreases in average oil prices and daily production, with minimal inflation rates. This mixed economic outlook will be closely monitored in the coming months.