Oman’s banking sector will see credit growth by 2.9% to $80 billion by March

Official data showed that Oman’s banking sector recorded a 2.9 percent increase in total lending, reaching 30.8 billion Omani riyals ($80 billion) at the end of March.

In its monthly review of banking and monetary developments, the Central Bank of Oman revealed that lending to the private sector increased by 3.6 percent year-on-year, reaching 25.9 billion riyals at the end of March.

Non-financial corporations held the largest share of total private sector lending, accounting for approximately 45.4 percent at the end of March, closely followed by households with 45 percent.

Financial enterprises accounted for 5.8 percent. total, the remaining 3.8 percent fell to other sectors.

Total deposits held with other depository corporations recorded a significant year-on-year increase of 11.7 percent, reaching 30.3 billion rials at the end of March, while total private sector deposits increased by 13.7 percent to 20.2 billion rials.

Growth in private sector credit and deposits reflects strong economic activity and confidence in the financial system.

In terms of the sectoral structure of private sector deposits, the largest contribution was made by households – 49.8%, followed by non-financial enterprises – 30.9%, financial enterprises – 16.5%. and other sectors – 2.8 percent

The combined balance sheet of conventional banks showed a 0.8% year-on-year increase in total outstanding loans at the end of March.

Lending to the private sector increased by 1.6 percent to 20.3 billion rials, while overall securities investment increased by 28.0 percent to 5.7 billion rials.

Investments in government development bonds fell 17.1% to 1.8 billion riyals, while investments in foreign securities saw a dramatic increase of 139.0% to 2.3 billion riyals.

Moreover, aggregate deposits at conventional banks have seen significant growth while government deposits have declined. The share of public enterprises has increased significantly and private sector deposits have increased.

At the same time, Islamic banks and windows have experienced significant growth in total assets, financing and deposits, highlighting their growing role in the banking system.

The report further highlighted that the country’s nominal gross domestic product declined by 2.8 percent at the end of the fourth quarter of 2023, mainly due to a significant contraction in the hydrocarbon sector despite growth in the non-hydrocarbon sector.

However, real GDP grew by 1.3 percent over the same period. Both the average price of oil and daily production fell, and inflation remained minimal.

Article by Arab News