Commercial banks’ credit rises 3% as Islamic financing jumps 29%

Muscat - 

Commercial banks in Oman recorded a three per cent year-on-year growth in total credit as of September 2017, while total financing by Islamic banks and windows jumped 29 per cent during the same period, according to statistics released by the Central Bank of Oman (CBO).

‘The banking sector in Oman continued to witness reasonable growth in both credit and deposits, despite the overall slowdown in economic activities’, the CBO said in its monthly statistical bulletin released on Tuesday.

Commercial banks’ total outstanding credit rose to RO20.18bn in September this year from RO19.58bn in September 2016. While credit to private sector increased 3.7 per cent to RO18.13bn, bank lending to public enterprises fell 2.7 per cent to RO1.78bn. Credit to the government also fell from RO11.6mn in September last year to RO6.4mn in September 2017, the statistics showed.

Total deposits at commercial banks increased 2.1 per cent to RO18.81bn in September from RO18.41bn a year ago. Private sector deposits, which accounts for 66 per cent of total deposits with commercial banks, rose 3.2 per cent to RO12.41bn. Government deposits with commercial banks decreased 0.9 per cent to RO4.97bn in September, while deposits of public enterprises declined 1.4 per cent to RO1.1bn during the same period.

According to the CBO’s bulletin, the core capital and reserves of commercial banks as of the end of September 2017 stood at RO4.2bn.

The central bank said it continued accommodative monetary policy stance, regularly monitoring the liquidity situation and ensuring availability of adequate credit for productive activities.

The weighted average interest rate on RO deposits increased to 1.672 per cent in September 2017 from 1.349 per cent a year ago, while the weighted average RO lending rate increased to 5.19 per cent from 5.03 per cent a year ago.

On the other hand, total financing by Islamic banks and windows recorded a robust growth of 29 per cent to RO2.9bn in September 2017 compared to RO2.25bn a year ago. Islamic financing to the private sector rose 22 per cent to RO2.66bn, while financing to public enterprises jumped 375 per cent to RO220.8mn from RO46.4mn a year ago.

Total assets of Islamic banking entities grew 29 per cent to RO3.6bn in September 2017 from RO2.8bn a year ago. Islamic assets accounted for nearly 11.6 per cent of Oman’s total banking sector assets.

The CBO noted that the combined balance sheet of conventional and Islamic banks taken together provides a complete overview of the financial intermediation taking place in the banking system in Oman.

Total deposits held with Islamic banking entities also recorded a sharp growth of 39 per cent to RO2.8bn in September 2017 from RO2.01bn a year ago.

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