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Bank credit growth slows to 1.9 per cent, deposits up by 3.5 per cent

12 Jan 2021

Bank credit growth continues to be slow in the sultanate amid the economic slowdown caused by the coronavirus pandemic and weak oil prices.

The latest numbers released by the Central Bank of Oman (CBO) on Tuesday showed that credit growth in Oman’s banking sector has remained low at 1.9 per cent in November 2020 compared to the same month a year ago, while total deposits in the banking system have increased by 3.5 per cent in the same period.

Total outstanding credit extended by Oman’s banking sector (conventional and Islamic banks) grew to RO26.3bn at the end of November, while credit to the private sector showed a more tepid growth of 0.5 per cent year-on-year to reach at RO22.9bn, the CBO data showed.

The shares of the non-financial corporate sector and the household sector (mainly personal loans) in total private sector credit stood at 46.5 per cent and 45.1 per cent, respectively. The share of financial corporations was at 5 per cent and other sectors received remaining 3.4 per cent of total private sector credit as of the end of November.

The combined balance sheet of conventional banks showed a year-on-year growth of just 1 per cent in total outstanding credit, while Islamic banking entities provided financing of RO4.2bn as of the end of November, recording a year-on-year credit growth of 7.3 per cent.

The central bank data showed that total deposits held with the banking sector reached RO24bn as of the end of November 2020, increasing by 3.5 per cent from November 2019. Of total deposits, total private sector deposits increased by a higher rate of 10.8 per cent to RO16.5bn.

In terms of the sector-wise composition of private sector deposits, households deposits represented a share of 51.2 per cent, followed by non-financial corporations at 32.2 per cent, financial corporations at 14.2 per cent and other sectors at 2.4 per cent share.

Aggregate deposits at Oman’s conventional banks increased by 3 per cent year-on-year to RO20.3bn at the end of November, whereas deposits held with Islamic banks and windows increased by 6.7 per cent to RO3.7bn in the same period.

Total assets of Oman’s Islamic banks and windows increased by 7.7 per cent on a year-on-year basis to RO5.2bn and constituted about 14.5 per cent of total banking sector assets at the end of November.

On the other hand, Omani banks’ overall investments in securities rose 20.5 per cent to RO4.2bn as of November 30, 2020 against the same period a year ago. Conventional banks’ investment in government development bonds increased by 18.6 per cent over the year to RO1.8bn while their investments in foreign securities stood at RO1.1bn at the end of November last year, lower by 7.1 per cent over the position a year ago.

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