Oman’s bank credit increases by 2.8% in March; deposits up 4.7%

Muscat – Oman’s banking sector recorded credit growth of 2.8% in March 2022 compared to the same period a year ago, according to the Central Bank of Oman.

The total outstanding credit granted by the banking sector (conventional and Islamic banks) increased by 2.8% to reach 27.9 billion rozar in March 2022 compared to the same month of the previous year, the CBO said. in its monthly bulletin published on Sunday.

Out of total credit outstanding, bank credit to the private sector grew slowly by 0.7% year-on-year to reach RO23.5 billion. Non-financial corporations and the household sector received the highest shares of total credit to the private sector, at around 45.4% each, at end-March 2022. The share of financial corporations was 5.4% and other sectors received the remaining 3.8% of the credit. total credit to the private sector.

Fitch Ratings said last week that Omani banks’ credit fundamentals were picking up as pressures on the operating environment eased and economic activity gradually picked up amid rising oil prices.

Another global rating agency, Moody’s, also recently upgraded its outlook for Oman’s banking system from “stable” to “negative” due to an improved operating environment for banks.

The total credit outstanding of conventional banks increased by 1.4% year-on-year in March this year. However, conventional banks’ credit to the private sector declined by 0.3% to RO19 billion while their overall investments in securities increased by 13.5% to RO5.2 billion, according to CBO data.

Banks’ investment in development government bonds increased 14.6% year-on-year to RO2.1 billion, while their investment in foreign securities fell 18.6% to RO790 million. of RO at the end of March 2022.

On the other hand, the total deposits of the banking sector increased by 4.7% to reach RO25.9 billion at the end of March 2022 compared to the same period a year ago.

Total private sector deposits increased by 2.4% to RO17.5 billion. In terms of the sectoral composition of private sector deposits, the largest contribution came from household deposits at 51.9%, followed by non-financial corporations at 30.2%, financial corporations at 15% and other sectors at 0.8%.

Total deposits held with conventional banks increased by 3.4% year-on-year to reach RO21.5 billion at the end of March 2022. Private sector deposits, which accounted for 68.3% of total deposits with conventional banks, increased by 0.4% as of March 2022 to reach 14.7 billion RO.

Government deposits with conventional banks increased by 9.7% to RO4.9 billion and public enterprise deposits increased by 16.2% to RO1.5 billion.

The total assets of Islamic banks and tellers increased by 10.7% on a yearly basis to reach RO6 billion at the end of March 2022. Islamic assets now constitute about 15.4% of the total assets of the banking system in Oman at the end of March 2022.

Islamic banking entities provided financing of RO4.9 billion at the end of March 2022, registering a growth of 9.6% compared to a year ago. Total deposits held with Islamic banks and branches increased by 11.7% to RO4.5 billion.