Muscat – Bank lending growth in Oman accelerated to nearly seven per cent in the first eight months of 2023 as compared to below five per cent credit growth recorded in the previous year, according to the Central Bank of Oman.

Total outstanding credit extended by the sultanate’s banking sector (both conventional and Islamic banks) grew by 6.8% to RO30.4bn as of August 2023 against the same month of the previous year, the CBO said in its monthly statistical bulletin.

Of the total outstanding credit, bank credit to the private sector demonstrated increased growth of 7.0% year-on-year to reach RO25.6bn in August. Non-financial corporations received the highest shares of the total private sector credit, at approximately 45.8%, followed by household sector at 44.6%. The share of financial corporations was 5.9% while other sectors received the remaining 3.7% of total private sector credit.

Conventional banks’ total outstanding credit grew by 5.4% year-on-year in August this year. Conventional banks’ credit to the private sector increased 5.5% to RO20.3bn while their overall investments in securities dropped by 7.7% to RO4.2bn, the CBO data showed.

Banks’ investment in government development bonds decreased by 10.2% year-on-year to RO1.9bn in August, while their investments in foreign securities dramatically rose by 58.9% to RO1.0bn.

On the other hand, total banking sector deposits in Oman grew by 6.6% to RO27.9bn at the end of August 2023 against the same period a year ago.

Total private sector deposits increased by 7.0% to RO18.6bn. In terms of sector-wise composition of private sector deposits, the biggest contribution was from household deposits at 51.1%, followed by non-financial corporations at 31.1%, financial corporations at 14.9% and other sectors at 2.9%.

Aggregate deposits held with the conventional banks increased by 5.1% year-on-year to RO22.4bn at end-August 2023. Private sector deposits, which accounted for 68.1% of total deposits with conventional banks, increased by 7.3% as of August 2023 to reach RO15.3bn.

Government deposits with conventional banks witnessed an increase of 5.5% at RO5.3bn and deposits of public enterprises decreased by 12.3% to RO1.5bn.

Total assets of Islamic banks and windows in Oman increased by 13.3% on a year-on-year basis to reach RO7.2bn at the end of August 2023.

Islamic assets now constitute about 17.6% of the total banking system assets in Oman as of the end-August 2023.

Islamic banking entities provided financing of RO5.9bn at the end of August 2023, recording a growth of 12.9% over that a year ago. Total deposits held with Islamic banks and windows increased by 13.0% to RO5.4bn.